The Colonial Sugar Refining Co. has expressed a wish to cease the production of gypsum from their Lake MacDonnell leases for several years. They wish to concentrate their production at their leases on Kangaroo Island, to save costs, because they are embarrassed by the present very depressed prices of sugar. Application has been made for suspension of labour conditions on their Lake MacDonnell leases so that there will be no fear of losing these leases, which are essential to assure their future supplies of gysum. At the present rate of production, their Kangaroo Island leases will be worked out in about 12 years' time. The Company has also stated that the quantity of their future requirements of natural gypsum is very uncertain. This uncertainty is caused by potential competition on the gypsum market from large quantities of “chemical gypsum” which is to be produced as a by-product of the superphosphate industry. The “chemical gypsum” is to be produced in large quantities in the eastern states, close to the main plaster works and to some cement works. All of this has come about at a most inopportune time, as the South Australian Government is just completing the third stage of extensive improvements to the facilities for handling gypsum from Lake MacDonnell on to the sea off the port of Thevenard near Ceduna. These improvements consisted of bulk handling arrangements at Thevenard, improvements to the jetty and relocation of the railway. Over £1 000 000 has been spent by the South Australian Government on this, and the new railway deviation almost halving the distance of haulage is about to be opened. The money was spent to cater for an expected large increase in production of gypsum from Lake MacDonnell by the two companies, the Waratah Gypsum Company and the Colonial Sugar Refining Coy. It was anticipated that the improvements would enable these companies to secure large export orders, as well as to be able to supply a large portion of the Australian market from the deposit of over 500 million tons. Now it appears that, apart from not gaining extra export orders, the demand for natural gypsum for the eastern states may be considerably reduced. This report gives the results of investigations made to ascertain how matters really stood. The information was gained from special visits to - • The Lake MacDonnell deposits • The plaster works of C.S.R. in Sydney • The Bureau of Mineral Resources in Canberra • The C.S.I.R.O. Laboratories at Fishermen’s Bend and at Higate in Melbourne • The Commonwealth Fertilisers (subsidiary of I.C.I.) new superphosphate plant at Yarraville, Melbourne. but the research laboratories of Australia Plasterboard Industries in Melbourne were not visited. The main points of information which affect the production from Lake MacDonnell are given first, followed by points affecting the general production and use of gypsum and the “chemical gypsum” position. Forecasts are given of likely future trends in the gypsum market. The situation as regards the Lake MacDonnell deposit is discussed, and some actions are suggested.