out our earnings or suffer heavy penalties. Although there were no earnings, by 1967 our investment had grown to nearly U.S. $13 million. One might note that during these years, never once was any complaint registered that the enterprise was 100% foreign-owned. There was no request for Australian participation when we were taking the risks and making the investment without immediate reward. It is important to understand that Utah was a relatively small company when we came here. We were no Exxon or General Motors, but smaller than many an Australian company. Although 51 years old, the company earned around U.S. $2 million annually and had a net worth of about U.S. $10 million. It had 147 shareholders, most of whom were descended from the five founders. Its business was primarily heavy construction, but especially in the 1950's, it began to devote an increasing share of its talents and its assets to mining. By 1960, when Utah began mineral exploration in Australia, it had acquired mining interests in coal, uranium, iron ore and copper in the United States, as well as iron ore in Peru. Net worth was over U.S. $50 million and annual earnings reached U.S. $9 million. Funds earned elsewhere were plowed into Australia and were the source of more than $A15 million that Utah Development Company spent on mineral exploration and development, largely in the Bowen Basin between 1963 through 1974. The coal in the Bowen Basin was in Australia long before any of us. It remained for someone to place the bets and take the risks to develop these deposits. Mineral exploration is a truly risky business, and in a country short of capital one cannot be critical that the national enterprises felt such risks to be imprudent and allocated their capital to other uses. Indeed, one of the useful roles that foreign capital plays is its ability to take these risks that are beyond the reach of local companies. Utah also offered three other elements that were essential to the realization of success in the Bowen Basin. These were: (1) the technical expertise required to develop a surface mining operation on a scale large enough to justify the substantial investment involved; (2) the ability to secure long-term markets for the output from the projects; and (3) the capability to arrange financing for the massive investment required. 1968: A CRUCIAL YEAR 1968 was a crucial year in the history of Utah International. Suddenly many of the prospects on which the company had been working matured into opportunities for expansion. Critical decisions were made to expand the company's investments in steam coal, iron ore, copper, urani-um, and metallurgical coal. The Annual Report for that year spelled out the U.S. $110 million program for Queensland coking coal and then stated: "This will be by far the biggest enterprise and the largest single investment undertaken by Utah in its 68-year history. But it represents an exceptional opportunity." What the Annual Report did not state was the debate in the Board Room that preceded approval of this investment. One of our very thoughtful outside directors put this question to me: "Are you willing to wager the entire company on the future of Queensland coking coal?" Without trepidation I answered, "Yes," and have no reason to regret it. It was this willingness to bet all our chips on Australia that is responsible for our success here. The company opened the year "We in Utah have done our best to be good corporate citizens. We ask no special privileges, only to be treated as you would treat one of your own, equal before the law and judged by equal measures in public appraisal." 1968 with a net worth of U.S. $96 million and long-term liabilities of U.S. $62 million. Before we were through, we would arrange new financing of almost U.S. $425 million over the next 10 years, the bulk of which would be used to fund our expansion in Australia. One more irrevocable step: we sold our construction assets, partly to raise capital and partly to insulate us against the hazards of violent changes in cash flow that can characterize contract construction activities. We raised a modest amount in selling equity in Australia, but the bulk of the amount had to be raised through borrowing in Europe, in Japan, and in the United States. Total debt exceeded net worth. Two of these debt issues were convertible and were later converted, diluting the share of the company owned by the founding families. In yielding ownership we would have much preferred to have raised this capital in Australia, rather than in Europe, Japan, or the United States. The advantages to Utah of doing so are too obvious to belabor here. We didn't do it for the very simple reason that we couldn't do it. Australian capital was either inaccessible or unavailable. The Reserve Bank of Australia restricted our ability to borrow here, and your equity market was very limited. There were demands by others for the supply of Australian capital. It was fully employed for purposes where overseas capital was either not available or not wanted. When we were certain that we had in prospect a profitable enterprise, we made good on our commitment to seek Australian participation. It was not easy to accomplish, because we had to satisfy both the Reserve Bank here and the Foreign Funds Control authority in the U.S. When the necessary permissions were in hand, we asked our Australian underwriters how big a float they could handle. The reply was, "$20 million Australian." When we complained that it wasn't very much and would only purchase a 10% interest, they informed us it was the second largest equity offering in Australian history. As we hoped it would, it has proven 5