spiral gravity concentrator part of pilot plant operation at iron sands deposit in new zealand world's first ore-slurry-oil carrier 52,000 dead weight ton marconaflo merchant leaving japanese shipyard after undergoing conversion high grade iron ore pellets await shipment from marcona's stockpiles in peru to japanese buyers first paint coat being applied to giant controllable pitch propeller on s 5 son uon vanguard one of marcona's three new 130,000 dwt ore-oil carriers in ore slurry being discharged by mai dcess from slurry carrier in dackgrou eiving pond at oregon steel mill decline in profits from marcona's mining operations in peru in 1970 because of higher operating costs and increased provisions for peruvian income taxes shipping profits improved however as some of the combination ore-oil vessels were diverted to take advantage of rising charter rates in the oil trades and were replaced with single purpose vessels chartered at lower rates for the move ment of ore utah's share of marcona's earnings during our 1970 fiscal year amounted to 6,732,000 after distribution taxes as compared with 8,004,000 in 1969 a portion of the decline is attributable to current losses and reserves established against possible future losses by a marcona affiliate engaged in salt mining in chile in 1970 the marcona group initiated n project to produce 2 million tons of iron concentrates annually from extensive iron sands deposits on the west coast of new zealand a marcona subsidiary wnverley mining company owns a 75 i i ierest in the project and the remaining 25 is held by a new zealand firm as co-owner operations consisting of the hydraulic dredging and magnetic sepa ration of the iron-bearing material are scheduled to begin in mid-1971 develop ment of the project was made feasible by the conclusion of contracts valued at 89 million for deliveries of 11,060,000 tons of concentrates over a 10 year period the surplus output capacity makes allowance for spot sales in addition to the fulfilment of contract requirements total investment cost is estimated at 12.8 million a second major sales contract entered into during the year by the marcona group calls for 10 million tons of iron ore concentrates to be produced from the peruvian mines and processing plant and delivered to nippon steel company over a 10 year period a portion of this tonnage yet to be determined by the parties under the contract provisions represents a substitution of concentrates for standard sinter feed sold under earlier contracts but not yet shipped involving a total sales price approximating 113 million the agreement has special sig nificance because it represents the first major long-term purchase of iron ore concentrates to be delivered in the form of slurry utilizing the marconaflo method of materials handling which was de veloped by the marcona organization the marconaflo system is also to be employed in the deliveries of concentrates from the new zealand project referred to above although recent political develop ments in peru have not been reassuring to foreign investors generally the iron ore mining and beneficiation operations conducted in that country by marcona mining company have not been adversely affected the present government of peru has begun a program of broad economic and social change and until its direction and implications are clarified the introduction of new and essential foreign venture capital will be retarded peruvian officials have declared however that it is the intention of the government to provide a hospitable business environ ment in order to attract investment from abroad less than half of marcona's 1970 earnings was attributable to the mining of peruvian iron ore the remainder was derived principally from increasingly profitable ocean shipping operations at the year end the outlook appeared favorable for continuing strength in charter rates so long as existing conditions