iron ore iron ore is a naturally occurring substance from which iron can be extracted for ulti mate conversion in the steel-making proc ess steel mills experienced reduced re quirements for iron ore during 1976 as a result utah's shipments were down from those recorded in 1975 and overall profit ability decreased utah has participated in iron ore proj ects since 1946 when the company ac quired the still active iron springs mine located near cedar city utah shipments from this mine virtually all of which are delivered to a single customer totaled 301,000 tons in 1976 compared to 431 000 tons in 1975 in the same district under the terms of a mining and stripping contract utah also operates an iron ore mine owned by a steel company utah owns 46 of marcona corpora tion which through subsidiaries has made significant investments in iron ore mar cona's first venture was its operation in peru which it started in 1 953 and later ex panded to an annual capacity of 10 million tons of beneficiated iron ore products this mine a very successful operation his torically was expropriated by the peruvian government during 1975 the reduction of marcona's financial capabilities following the peruvian takeover made it impractical for marcona to proceed with the develop ment of the samarco iron ore project in brazil as a result during 1976 utah reached agreement with marcona corpo ration for the purchase of marcona's 49 interest in samarco from which shipments are expected to begin in mid-1977 the initial capital expenditures for the samarco project now forecasted at ap proximately s600 million will be employed in the development of the mine and con centrating plant installation of a 250-mile pipeline to transport iron ore concentrate in slurry form to the coast and construc tion of pelletizing facilities and a shipping port at point ubu five million metric tons per year of the mine's output will be con verted into pellets and delivered to steel mills in the united states and europe under existing long-term contracts as part of these agreements product sales prices will keep pace with market conditions be cause the samarco prices are tied to united states and brazilian iron ore pellet quotations discussions continue with po tential customers for the sale of filtered concentrates from the remaining two mil lion metric tons of production capacity the mount goldsworthy mine located in western australia and one-third owned by utah development company shipped 6.8 million tonnes metric tons of iron ore during 1976 compared to 7.8 million tonnes in 1975 delivering ore under fixed price sales contracts mount goldsworthy was unable to offset sharply escalating costs and as a result the mine operated at a loss during 1 976 additional participa tion in iron ore projects will be achieved if a decision is made to develop mount goldsworthy's mining area c where ap proximately 750 million tonnes of iron bearing material are indicated the extent to which these deposits will be mined de pends primarily upon the development of satisfactory sales contracts for the iron ore utah's interests in newzealand are held through marcona which owns 75 of a company that utilizes a dredging operation to mine iron-bearing coastal sands cur rent year shipments were modestly above the one million tonnes shipped last year once mining begins at the samarco proj ect in brazil iron ore will be transported by conveyors from the hillside germano ore deposit to the mine site concentration plant alter processing the ore will be transported by pipeline lo coastal pelletiz ing and shiploading facilities