The major focus of the project, which is scheduled to occur through December 1995, will be to install and test a 500{number_sign}/hr. fine-coal cleaning circuit at DOE`s Process Research Facility (PRF), located at the Pittsburgh Energy Technology Center (PETC). The circuit will utilize an extremely fine, micron-sized magnetite media and small diameter cyclones to make efficient density separations on minus-28-Mesh coal. The overall objectives of the project are to: Determine the effects of operating time on the characteristics of the recirculating medium in a continuous integrated processing circuit, and subsequently, the sensitivity of cyclone separation performance to the quality of the recirculating medium; and determine the technical and economic feasibility of various unit operations and systems in optimizing the separation and recovery of the micronized magnetite from the coal products. This report contains a short discussion of the project description, objectives, budget, schedule, and teaming arrangement. The final section contains an outline of the specific project goals for the next quarterly reporting period.