underway full production capacity of this operation should reach four million tons per year by 1974 the year's shipments of 3,010,000 tons were slightly higher than those of last year reflecting a negotiated increase in contract amounts effective in january and an improved industrial relations climate at the mine during the year goonyella and peak downs have been developed under an agreement with the state of queensland in which utah development and mitsubishi development pty ltd hold respective ownership interests of 85 and 15 this agreement permits four mining leases embracing up to 175 square miles and allows the companies to export up to 300 million tons of coal from these leases provided that the amounts mined do not exceed a specified proportion of the total reserves discovered in the area based on the findings to date this latter provision is not expected to limit the amounts which may be exported in 1969 long-term contracts with price escalation protection were executed with japanese buyers for the delivery of goonyella and peak downs coal totaling 85 million tons deliveries under these contracts will increase in the early years until a level of seven million tons is reached in 1974 and will remain at that level plus or minus five percent at the buyers options until the contracts expire in 1984 over 200 million will be expended to bring these mines into production with an estimated capacity of nine million tons annually over one half of the expenditures have been devoted to the mine-to-port railroad the new port of hay point and the town of moranbah all of which were built at a scale to accommodate both mines situated 150 miles north of blackwater the new goonyella mine which shipped nominal quantities at the end of 1 971 , recorded sales of 3,750,000 tons in 1972 this was a most successful performance as start-up operations went smoothly and allowed goonyella to fulfill its contractual commitments to a group of 13 japanese buyers while delivering under short-term contracts 1 250,000 tons to steel companies in australia italy holland spain france belgium and greece the peak downs coking coal mine which is located 35 miles south of goonyella began shipments on schedule in july shipments for 1972 were 51 0,000 tons 302,000 tons of which were delivered to japan with the balance going to european customers the mine is operating on a satisfactory basis and will make a significant contribution to earnings in 1973 when it will be operating throughout the year in 1972 major additional long-term sales agreements were entered into with japanese and european buyers for additional coking coal deliveries starting in 1974 the term of the contracts is ten years and the japanese portion of 26 million tons is firm for the entire period and sold on an f.o.b basis the european contracts are on a delivered basis and are firm as to price and quantities in the first six years quantities for the last few years are subject to agreement on pricing for this period therefore including optional tonnages the total deliveries under these contracts with japanese and european customers could vary from a minimum of 42 million tons to a maximum of 58 million tons to meet the additional quantities required peak downs will furnish about 1.5 million tons from its five million ton annual capacity the remaining requirements will ultimately reach 4.5 million tons annually by 1976 and will be provided by a new mine to be built at saraji 1 5 miles south of peak downs this new mine and supporting facilities will require an estimated investment of 1 70 million of which utah development company will furnish 120 million the saraji facilities where practical are being designed to serve also a new potential mine location at norwich park some 30 miles south of the saraji reserves following a plan similar to that used for goonyella and peak downs the port and water supply facilities will be constructed with capacity adequate for dual service and a new town will be so located that it can accommodate personnel from both mines development of norwich park has not been approved but is still under preliminary study further work is required to determine the feasibility of the new mine and to develop a market for its output as its uses become more widely accepted and as technology improves the value of nuclear power is enhanced as a potential source to fulfill much of the world's emerging energy needs uranium fuels which can be transported great distances at relatively low cost offer new oppor tunities to those areas of the world not endowed with energy-laden resources at shirley basin uranium bearing pods of ore are defined isolated and mined with a backhoe the ore is ihen transported by truck to the milt