OCR

Ocean Shipping and Ore Sales Utah owns a 41.47% interestin the equity stock and a 50% interest in the voting stock of Cia. San Juan, S. A. an affiliate whose principal role is the marketing and transporting of Marcona ore. Cia. San Juan's wholly-owned subsidiary, San Juan Carriers, Ltd. , owns eight ships which transport the ore under long-term contract from Marcona to steel produ- cers throughout the world. During 1963, two 71,000 deadweight ton ore-oil carriers joined the shipping affiliates fleet, raising its total capacity to 390, 000 tons. Supplemented by 124 chartered vessels, San Juan moved 38 billion ton-miles of iron ore to steelmakers in Asia, Europe, and North ada South America. Although profit margins were still under the influence of low charter rates established in 1962, Utah's share of Cia. San Juan's consolidated earnings, after distribution taxes, increased to $ 1,334, 874 from $1, 038, 694 in 1962. Copper With the completion of a $4, 000, 000 expansion of Pima Mining Company's crushing and concentrating facilities, the capacity of these copper operations was expanded from 3,800 to 7,600 tons daily. The expansion program extended the life of the mine until 1975 by enabling the utilization of lower grade ores. Enhanced by price stability in the industry, Utah's 25% share of Pima's earnings, after distribution taxes, was $537,888, an improvement over last year.. Coal The June 21st dedication of Utah's Navajo Mine ana Four Corners Power Plant of Arizona Public Service Co. marked the Company's entry into a new field of operations and was one of its most significant develop- ments in several years. Under a 35-year contract with an option to renew for an additional 15 years, Utah provides coal to the Arizona utility for the production of electricity. Annual sales, which ran at a rate of 1. 6 million tons per year, will increase to 2.6 million tons in 1964 and should reach 3.6 million tons under the options available to Arizona Public Service. The present agreement provides for coal mining for an eventual plant of 800,000 Kw. The reserves of the Navajo Mine, however, approach 600 million tons, less than half of which is committed to Arizona Public Service. The significance of this operation to Utah lies not only in its present earnings, but also its expansion potential. These earnings have the Protection of very long-term contracts and the inherent stability and growth characteristic of the electric utility industry. Uranium Negotiations were underway with the Atomic Energy Commission to extend through 1970 the Company's contract to provide uranium from Lucky Mc and Shirley Basin. The original contract with the Atomic Energy