OCR

1963 Utah continued to derive z major share of its income from the extraction and sale of basic minerals: iron ore, uranium, copper and coal. With the addition of income from the Navajo Mine in New Mexico and the major contract modifications at Cedar City and Lucky Mc, Utah had insured the continuity of profits from these operations well into the future. Recent developments at Cedar City, Utah, and San Nicolas, Peru, greatly enhanced the long-term outlook for Utah's iron ore mining operations Negotiations with U. S. Steel resulted in a favorable new agreement which, while possibly reducing any one year's sales in the event of a temporary decline in the ore requirements of the Columbia - Columbia- extended ore sales by approximately eight years until 1975. The extension, providing for the delivery of an additional 4.4 million tons beneficiated ore, would enable the Company to utilize nearly all of the remaining known reserves in its Iron Springs deposits near Cedar City. Marcona Mining Company, in which Utah holds 50% voting and 41. 39% equity interests, had set into motion its expanded facilities for the large-scale concentration and pelletizing of crude ore and was thus able to ship high-grade sinter and pellet products to customers throughout the world. With its modern deepwater port facilities, Marcona has the ability to accomodate the largest, most economical vessels employed in the iron ore trade. The advantage of premium quality products, year-round operating climate, a downhill haul from mine to port, and efficient ocean transportation now enable Marcona to compete for an increasing share of expanding foreign markets . With the increased investment in Marcona, the Company thus expressed its confidence in the political and economic stability of Peru. This country has long been among the most dependable in South America and has an awareness of the economic gains to be realized by maintaining a favorable investment climate. 1963's ore shipments from Marcona, some 5 million tons, were 15% above 1962 and far in excess of the 2 million ton average during the 1950's . With the expanded facilities, total production capacity advanced to 6 million tons per year. In spite of increased output, Marcona's earnings were slightly down from 1962 due to lower profit margins and the startup costs of the new facilities. Utah's share of earnings, after all;,allowance for distribution taxes was $1,550, 770.