shipping relatively undeveloped area has on sev eral occasions been expanded and enlarged so that the operation today has the capacity to produce 10 million tons of beneficiated product each year in cluding 4 million tons of highly mar ketable iron ore pellets with continued losses in peru during recent years discussions with the peruvian government have turned toward the possibility of accelerating a program to transfer the peruvian assets under such an arrangement marcona would continue management of the operation in behalf of the peruvian government for an interim period during 1970 marcona through a subsidiary initiated a project to produce iron sand concentrate from extensive iron sand deposits located on the west coast of new zealand marcona has a 75 interest in the project the remain ing 25 is held by a new zealand firm hydraulic dredging and magnetic and gravity separation of the iron-bearing material began in june 1971 concen trates so produced are pumped offshore in slurry form to specially equipped vessels current year shipments totaled 1.1 million tons as compared to 1 million tons last year marcona has formed with a brazilian firm an iron ore mining project in brazil this venture will develop a large open-pit iron ore mine which will utilize a 240-mile iron ore slurry pipeline to transport ore to the atlantic coast there approximately 5 million tons of the nearly 7 million tons of planned annual production of iron ore will be pelletized in a new plant these pellets will be shipped to customers in the united states and europe in the preliminary stage is marcona's involvement in the possible development of a steel plant in saudia arabia in part nership with a representative group from - the world's steel companies and with petromin the saudi arabian govern ment's petroleum and mineral corpora tion this plant is expected to utilize iron ore from the brazilian operation and take advantage of low-cost abundant natural gas available for use as an energy source until recently utah's major activities in ocean shipping have been through marcona corporation which initially undertook the transportation of peruvian iron ore to meet its contract commit ments throughout the world in seeking to meet this objective and to satisfy the ocean transportation needs of others marcona over the years has brought under its control a fleet of vessels some of which are owned and some of which are under charter marcona owns and operates 12 ves sels totaling approximately 1.2 million deadweight tons in addition it operates a group of chartered ships aggregating approximately 1 4 million deadweight tons ten of the 12 owned vessels are capable of transporting oil and other liquid-type cargo as well as dry loads two of the ships are outfitted with marconaflo equipment which allows the use of an efficient method of handling bulk materials in slurry form this unique system developed by marcona permits the pumping of ore and other bulk materials in liquid suspension form to specially designed carriers the subse quent removal of the liquid and the re pulping of the material at its destination for pipeline delivery to a receiver with flexibility to adapt shipping capa city between liquid and dry cargoes marcona's shipping operations have been in an advantageous position as was clearly demonstrated during 1974 when marcona's shipping earnings reached their second highest yearly level a major cause of this increase resulted from benefits realized during the early part of the year on oil charters negotiated prior to the curtailment of this activity as a result of the arab oil embargo utah manages and directs charter arrangements for the shipments of aus tralian coking coat to european cus tomers and for deliveries of copper concentrate production to japan from the island copper mine last year 39 voyages were arranged under time charters and contracts of affreightment lifting 2.7 million tons of coking coal for seven customers in europe in addi tion 11 vessels under a contract of affreightment lifted approximately 185,000 long tons of copper concentrate for japan a construction program for two 126,000-ton dry bulk carriers in which utah has a 50 interest is progressing on schedule laying of the keel of the first vessel is scheduled for mid 1975 with launching three months later in september the vessel will be delivered in december after a three-month out fitting period and it will be loaded with its first cargo of utah's coal at hay point in january 1976 the second vessel will be delivered in june 1976 both ships will be managed by utah diverse cargo capability provides for increased operating efficiency in ocean transportation operations to japanese ports can return with an oil cargo from southeast asia the 1 40,000-ton cargo capacity san juan exporter is shown being loaded with slurry at the rate of 2,800 tons of iron ore per hour