mine and beneficiate the sands utilizing the marconaflo technique the concentrates are then slurried and pumped through pipelines to a ship moored offshore the ships used have marconaflo drainage equipment for removal of most of the water from the slurry currently all waipipi production goes to japan under a ten-year contract for annual deliveries of one million tons in 1972 the first full year of operations shipments totaled 930,400 tons and the project operated profitably ocean shipping utah's participation in the ocean shipping business is through its equity interest in marcona corporation that company's introduction to ocean shipping came in 1 953 when it began to charter vessels to move its iron ore products from peru to destinations around the world shortly thereafter marcona instituted a vessel ownership program which over the years has led that company to a position of control over a sizable fleet flexibility has been of prime importance in designing the fleet of marcona-owned vessels none of the ten ore carriers is a single purpose vessel but each ship is capable of carrying either ore and oil or ore in slurry form and oil this dual capability has served marcona profitably over the years by allowing the ships to take advantage of backhaul opportunities that would not be available to ordinary ore carriers in late 1 970 sharp upward movements in oil tanker charter rates created a unique opportunity for marcona combination carriers were committed solely to the oil trade at attractive rates and dry cargo replacement tonnage at lower rates was located to satisfy marcona's own iron ore transportation requirements under these arrange ments profits from shipping operations in the 1 971 fiscal year far exceeded those that might be realized under normal circumstances during 1972 most of these arrangements expired and tanker and dry cargo charter rates came into closer alignment causing marcona's shipping earnings to return to more typical levels for the year marcona has undertaken a jumboizing program which will lengthen three of its vessels and thereby raise the capacity of the fleet by 1 07,000 deadweight tons the first ship to be jumboized was the san juan exporter and modifica tion of this vessel also included the installation of marconaflo equipment recently completed it carried as its first cargo the initial deliveries of high grade iron ore feed for a new japanese pellet plant which is equipped with marconaflo discharge facilities depending upon marcona's needs at a given time other ships may be utilized to complement the operations of its own fleet at year end 29 additional vessels were operating under various hire arrangements with marcona reflecting the decline in oil trade activity the traffic of all marcona shipping was reduced to 127.7 billion ton miles in 1972 from 135.9 billion ton miles a year earlier while utah does not currently own any vessels the rising importance of sales of australian coal to europe and the significance of transportation costs in the pricing structure for the delivered product have led the company to assume responsibility for these shipping arrangements as a consequence the company has entered into a number of agreements to meet these transportation requirements exploration in order for a mining company to sustain growth a selection of potential investment opportunities must be under consideration for future development at such time as human and financial resources of the enterprise can be made available it is the task of an imaginative and vigorous exploration program to provide such opportunities with these policies in mind utah strives to insure that its program is directed toward geographic locations which present a reasonable investment climate and minerals which afford satisfactory market potential although utah's exploration activities have covered many areas of interest throughout the world the major portion of recent expenditures has replenishment of diminishing mineral reserves is the continuing objective of exploration programs funded by resource-intensive com panies around the world teams of geologists and mining engineers examine and test the earth's crust to locate ore deposits which can supply raw materials for the future of the indicated ore body