The work performed during the seventh quarterly reporting period on the research program, Scale-up of Mild Gasification to a Process Development Unit is presented in this report. The overall objective of this project is to develop the IGT Mild-Gasification (MILDGAS) process for near-term commercialization. The specific objectives of the program are to: (1) design, construct, and operate a 24-tons/day adiabatic process development unit (PDU) to obtain process performance data suitable for further design scaleup. (2) Obtain large batches of coal-derived co-products for industrial evaluation. (3) Prepare a detailed design of a demonstration unit. And (4) develop technical and economic plans for commercialization of the MILDGAS process. The MILDGAS process is a continuous closed system for producing liquid and solid (char) co-products at mild operating conditions up to 50 psig and 1300{degree}F. It is capable of processing a wide range of both eastern caking and western noncaking coals. The 1 ton/hr PDU facility is comprised of a 2.5-ft ID adiabatic gasifier for the production of gases, coal liquids, and char; a thermal cracker for upgrading of the coal liquids; a three-stage condensation train to condense and store the liquid products; and coal feeding and char handling equipment. The facility will also incorporate support equipment for environmentally acceptable disposal of process waste.