Deposits of limestone at Mount Gambier have for some time attracted attention as a possible source of lime. The limestone is a soft polyzoal material which can be readily mined and is also of high purity, containing about 97 per cent CaCO3, so that when burnt it produces a reactive high quality lime. However, the physical nature of the stone makes it unsuitable for burning in conventional equipment. The stone is porous so that it is a poor conductor of heat and its density is low. Moreover the stone in bulk is not strong. These characteristics are considered to make burning in shaft and rotary kilns expensive because of the high calcination temperature required to burn the limestone at a suitable rate and the low throughput per unit volume which would result from the low density and poor strength. Previous work, described in Report AMDEL-49 was done on the possibility of using fluidized bed techniques for calcination of crushed limestone and it was decided that these were not suitable because of excessive dusting and difficulty in operating with the limestone in a multistage fluid bed. It was suggested that the most technically feasible process for calcination of the Mount Gambier limestone would be some form of entrained state reactor. In an entrained state furnace the solid particles are transported through the reaction zone by a stream of hot gases. The residence time of the solids is low so that the rate of reaction must be high. This type of furnace has the advantage over a fluid bed that the gas velocity, and hence heat input per unit area, is not limited by the necessity of maintaining a distinct bed of solid particles. It suffers from the disadvantage that the operation is co-current, which means that when used for limestone calcination the lime product must be quickly separated from the heat gases at temperatures of 850 - 900°C. The recovery of the sensible heat of the gases discharged at this temperature is obviously important for the economical production of lime. A further limitation is that the feed to such a furnace must be fine enough to be transported by a stream of hot gas. A laboratory scale entrained bed calcination furnace has been operated by the Research Section of the Department of Industrial Development Western Australia, using a limesand feed, but without attempting much heat recovery. It was decided to build a small furnace which could be used to determine the combination of gas temperature, velocity and furnace height required to satisfactorily calcine a sample of crushed Mount Gambier Limestone. This report covers work which has been done with a 2 inch diameter furnace fired with LP gas and fed with minus 10 mesh limestone. An appraisal of the present status and also the future of the investigation is included. The results of a preliminary investigation into the possible methods of burning oil fuel in a 10 inch diameter furnace are also included.