EXHIBIT 10.18
                                                     FORM 10-Q
                                   QUARTER ENDED JUNE 30, 1998



Agreement No. 153






                               Standby
                           Letter of Credit
                              Agreement





                      This Agreement is Between
                     Bucyrus International, Inc.
                         1100 Milwaukee Ave.
                     South Milwaukee, WI   53172

                                 and

                       Marine Bank and Savings


<PAGE>
The undersigned ("Customer") agrees with Marine Bank and Savings
("Bank") that each irrevocable standby letter of credit (a "Credit")
issued by Bank at the request of Customer shall be governed by the
following terms and conditions, unless they are expressly changed in any
Credit or Customer's Application for any Credit, as approved by Bank,
and, with regard to the provisions of Section 5 herein, regardless of
whether such Credit or Application for such Credit provide otherwise:

1.  PAYMENT.  Customer shall pay to Bank at its main office in Pewaukee,
Wisconsin the amount of any draft paid by Bank after a draw, or
purported draw, under a Credit, such payment to be made at or before
presentation of the draft.  Customer further agrees to pay Bank,
immediately upon its demand after the occurrence of an Event of Default,
the full amount of all drafts which could, according to all outstanding
Credits, be presented at that time or at time thereafter, which sum Bank
shall hold for the account of Customer, without interest, for the
purpose of honoring all drafts when presented.  Any excess remaining
after Bank has honored all drafts, and all Credits expire, shall be
returned to Customer.  

Drafts payable in foreign currency shall be paid to Bank by Customer in
United States currency at the rate of exchange for cable transfers in
effect at M & I Bank at the time of payment or, if there is no such rate
of exchange, Customer shall pay Bank the actual cost of settlement.

2.  FEES & INTEREST.  Customer agrees to pay Bank:
 
(a) On demand, Bank's customary commissions in effect from time to time
and all costs and expenses, including reasonable attorney's fees paid or
incurred by Bank in connection with the enforcement of this Agreement or
any Credit.  As used herein, and until Bank notifies Customer of any
change, "Bank's customary commissions" means the following:  Prior to
the occurrence of an Event of Default, the customary commissions of the
Bank are as follows:  1.50% per annum for Credits issued in connection
with Customer bids or assuring Customer performance ("Nonfinancial
Credits") and 2.00% per annum for all other Credits ("Other Credits"). 
Following the occurrence of an Event of Default and upon Bank s written
notice, the customary commission for Nonfinancial Credits shall
immediately increase to 2.375% per annum and for Other Credits shall
immediately increase to 4.00% per annum.  All commissions are due and
payable quarterly in advance;

(b) Interest on all sums advanced by Bank without prior reimbursement by
Customer at the per annum rate of 2.50 percentage points in excess of
the highest rate of interest published in The Wall Street Journal from
time to time as the prime rate (hereafter referred to as the "Prime
Rate") to be computed for actual days unpaid on a 360 day basis, and the
interest rate shall change when and as the Prime Rate changes; and

(c) In the event any change in any law or regulation, or in any
interpretation by a court, or administrative or governmental authority
charged with the administration thereof, shall either:
 
[i] impose, modify or make applicable any reserve special deposit or
similar requirement against any reserve, special deposit or similar
requirement against letters of credit issued by Bank; or

[ii] impose on Bank any other condition regarding this Agreement or any
Credit, 

and the result of any event referred to above shall be to increase the
cost to Bank of issuing or maintaining a Credit, then, upon demand by
Bank,  Customer shall immediately pay to Bank from time to time as
specified by Bank, such additional amounts as shall, in the judgment of
Bank, be sufficient to compensate Bank for such increased cost, together
with interest on each such amount from the date demanded until payment
in full of the rate provided in subsection (b) above.

3.  REPRESENTATIONS & WARRANTIES.  In order to induce Bank to issue each
Credit, Customer represents and warrants to Bank that:

(a) Each financial statement of Customer furnished to Bank was correct
and complete and truly presented the financial condition of Customer as
of the date thereof and, since the date of the last such financial
statement, there has been no material adverse change in the financial
condition of Customer; 

(b) Customer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;

(c)  Customer has the power and is duly authorized to execute and
deliver this Agreement and is and will be duly authorized to execute and
deliver each Application for a Credit and each collateral document
referred to in any Application for a Credit.  This Agreement, each
Application for Credit, and each such collateral document, when executed
and delivered, will constitute the valid and binding obligations of
Customer, enforceable in accordance with their terms, except as limited
by bankruptcy, insolvency or similar laws of general application
affecting the enforcement of creditors' rights and except to the extent
that general principles of equity might affect the specific enforcement
of this Agreement or such collateral documents;

(d) There is no litigation or administrative proceeding, pending or
threatened against Customer which might, if adversely determined,
materially affect Customer's ability to perform its obligations under
this Agreement; 

(e) No default exists, nor has any event, act or omission occurred
which, with the giving of notice or the passage of time, would
constitute a default under any instrument or agreements evidencing or
securing any indebtedness or liability of any Customer;

(f) Customer has no material indebtedness for borrowed money nor any
material obligation, contingent or otherwise, directly or indirectly
guaranteeing or in any manner providing for the payment of indebtedness
of another, except those disclosed on the most recent financial
statements of Customer furnished to Bank and except for endorsements for
collection or deposit in the ordinary course of business;

(g) Customer has good and marketable title to all of its property, real,
personal and intangible, subject to no lien, security interest,
mortgage, encumbrance or charge of any kind except as disclosed to Bank
or of record.

4.  COVENANTS.  Customer agrees that it will, so long as a drawing will
be available under any Credit, and until Bank has been reimbursed for
all drafts honored by it under any Credit, comply in a timely manner
with:

(a) its obligations hereunder and under all security agreements,
mortgages or assignments securing the Obligations defined in Section 6
herein; and 

(b) the following covenants:

[i] Customer shall furnish to Bank, within 90 days after the end of each
fiscal year of Customer, financial statements of Customer for such year
in reasonable detail, satisfactory in scope to Bank and certified by an
independent certified public accountant satisfactory to Bank;

[ii] Customer shall furnish to Bank, within 45 days after the end of
each of the first three quarters of each fiscal year of Customer,
financial statements of Customer for the period from the beginning of
the fiscal year to the end of such quarter, all in reasonable detail and
satisfactory in scope to Bank;

[iii] Customer shall furnish to Bank such financial information
regarding Customer as Bank may from time to time reasonably request and
shall permit representatives of Bank to visit and inspect the properties
and books and records of Customer at any reasonable time and as often as
may reasonably be desired;

[iv] Customer shall pay all lawful taxes, assessments and governmental
charges upon it or against its properties prior to the date of which
penalties attach, unless and to the extent only that the same shall be
contested in good faith and by appropriate proceedings;

[v] Customer shall maintain its corporate existence and not merge or
consolidate with or into any other corporation;

[vi] Customer shall furnish Bank with copies of the  quarterly financial
covenant calculation worksheets and annual compliance certificates
(collectively, the "Compliance Certificates") required pursuant to the
terms of that certain Credit Agreement dated as of September 24, 1997
(hereafter referred to as the "Bank Credit Agreement") among Customer,
Bank One, Wisconsin, as Agent ("Agent") and Letter of Credit Issuing
Bank, The Bank of Nova Scotia, as Documentation Agent and the Other
Financial Institutions party thereto (hereafter referred to collectively
as the "Banks");

[vii] Customer shall promptly notify Bank of the occurrence of any Event
of Default as defined herein, and of the occurrence or existence of any
event or circumstance that is likely to become, in the good faith
judgment of the Customer, an Event of Default;

[viii] Customer shall promptly furnish Bank with all notices of default
or breach of contract, and subsequent written communications related
thereto, it receives from any other lender, creditor or other person; 

[ix] Customer shall, upon request, furnish Bank with copies of any other
notices, disclosures, certificates and other written communications it
is required to furnish to any other lender, creditor or other person
pursuant to the terms of any agreement between Customer and such person;
and, after the occurrence of an Event of Default as defined herein,
copies of all notices and other written communications it receives from
any other lender, creditor or other person;

[x] Customer shall establish, or cause one or more of its subsidiaries
to establish, a deposit account with Bank or with one of Bank's
affiliates, and maintain positive balances therein and/or pay associated
fees for services rendered.

5.  EXONERATING & INDEMNIFYING CLAUSES.  

(a) Reliance & Documents.  Delivery to Bank or any of its correspondents
of any documents purporting to comply with the requirements of a Credit
shall be deemed conclusive evidence of the sufficiency thereof and of
the good faith and proper performance of drawers and users of the
Credit, their agents and assignees. Bank and its correspondents may rely
thereon without liability or responsibility with respect thereto, even
if such documents should in fact prove to be in any or all respects
invalid, insufficient, fraudulent or forged, except for willful
misconduct or gross negligence on the part of Bank. 

(b) Authority to Honor Payment Requests.  Bank is expressly authorized
and directed to honor any request for payment which is made under and in
compliance with the terms of a Credit without regard to, and without any
duty on the Bank's part to inquire into the existence of any disputes or
controversies between Customer, any beneficiary of any Credit or any
other person, firm, or corporation or the rights, duties or liabilities
of any of them.

(c) Non-Liability for Other Materials.  Bank shall not, except for gross
negligence or willful misconduct on the part of Bank, be liable to
Customer or any third party for:

[i] the use which may be made of any Credit or for any act or omission
of any beneficiary thereof;

[ii] any delay in giving or failing to give any notice;

[iii] the validity, sufficiency or genuineness of any document assigning
or purporting to assign the Credit or any benefits thereunder or any act
in reliance thereon;

[v] errors in translation or in the interpretation of technical term; or

[vi] errors, delay, misdeliveries or losses in transmission of
telegrams, cables, letters or other communications or documents or items
forwarded in connection with a Credit or any relative draft.

(d) Actions in Good Faith.  Any action taken or omitted by Bank or its
correspondents in connection with any Credit, any instructions of
Customers or any drafts, documents or merchandise relative thereto
shall, if in good faith, be conclusively deemed authorized by Customer,
whether expressly so or not, except for gross negligence or willful
misconduct on the part of Bank.

(e) Reliance on Wholly-owned Subsidiary Acts.  If any Credit shall have
been requested by Customer for the accommodation of a wholly-owned
subsidiary, any instruction, consent, approval and other action or
inaction of such wholly-owned subsidiary with respect to the Credit or
transactions thereunder shall be deemed to be the act or omission of
Customer for all purposes hereof, and Bank shall be entitled to rely
thereon.

(f) Indemnity.  Customer hereby indemnifies Bank and its correspondents
against any loss, cost, damage, expense (including any reasonable
charges for legal services) and/or liability whatsoever which they, or
any of them, may sustain, or incur on account of issuance of any Credit,
payment or acceptance of any draft relative thereto, refusal, or failure
to pay or accept any such draft, any action, or inaction respecting any
Credit instructions of Customer, drafts, documents or merchandise
relative to any Credit or any action or inaction in reliance on the
provisions hereof, except that Customer shall have a claim against Bank,
and Bank shall be liable to Customer, to the extent but only to the
extent of any direct, as opposed to consequential damages suffered by
Customer which Customer proves were caused by:

[i] Bank's willful misconduct or gross negligence in determining whether
documents presented under a Credit comply with the terms of the Credit;
or

[ii] Bank's willful failure to pay under a Credit after the presentation
to it by the beneficiary of the Credit or of a sight draft and
documentation strictly complying with the terms & conditions of the
Credit.

(g) Insurance.  Bank and its correspondents are authorized to accept and
receive as documents of insurance under a Credit or instructions of
Customer either insurance policies or certificates of insurance.

6.  SECURITY.  As security for any and all obligations and liabilities
of Customer under this Agreement, now existing or hereafter arising (the
"Obligations"), Customer grants to Bank a security interest in and lien
on any deposit account or other money now or hereafter owed Customer by
Bank (except for accounts the interest on which is exempt from federal
income tax), and Customer agrees that Bank may, at any time after the
occurrence of an Event of Default, without prior notice or demand, set
off against any such accounts or other money, all or any part of the
unpaid balance of the Obligations. (All of the above described security,
together with additions, accessions and substitutions, shall be
collectively called the "Collateral").

Customer agrees to sign and/or deliver to Bank, upon Bank's request,
such documents as Bank may require to perfect, register or record a
security interest in any item of Collateral or to foreclose upon any
such item and to reimburse Bank for all costs relating thereto.  Bank
may at its option, require Customer to provide additional security for
the Obligations, whether caused by a decline in the value of the
existing Collateral or in the Event of Default, as defined herein.

7.  COMPLIANCE WITH LAWS AND INSURANCE.  Customer agrees to procure all
licenses required for import and export and to comply with all foreign
and domestic laws and regulations.  Customer shall, at its expense, keep
the Collateral insured under policies with such provisions for such
amounts and by such insurers as shall be satisfactory to Bank from time
to time, and shall furnish evidence of such insurance satisfactory to
Bank.  Customer assigns (and directs any insurer to pay) to Bank the
proceeds of all such insurance and any premium refund, authorizes Bank
to endorse in the name of the Customer any instrument for such proceeds
or refunds, and at the option of Bank, to apply such proceeds and
refunds to any unpaid balance of the Obligations, whether or not due,
and/or to restoration of the Collateral.  Bank is authorized in the name
of the Customer or otherwise, to make, adjust and settle claims under
and/or to cancel any insurance on the Collateral.  If Customer fails to
obtain or maintain such insurance, Bank may, but is not required to,
obtain or maintain the insurance and in such event the cost of such
insurance shall be added to the amount of Obligations.

8.  POWER OF ATTORNEY.  Customer irrevocably appoints Bank its attorney
in fact to execute, in the name of Customer, assignments, endorsements
or other instruments or documents of any kind or description coming into
the possession of Bank under a Credit or instruction of Customer, to
execute, file, register or record any document or instrument and to do
such other acts as a Customer may be required to do hereunder, upon
failure of Customer to so act.

9.  EVENTS OF DEFAULT.  If any one or more of the following Events of
Default shall occur:

(a) Customer fails to comply with any of the provisions of this
Agreement or of any security documents described in Section 6; or

(b) Customer dies, ceases to exist, becomes insolvent or the subject of
bankruptcy or insolvency proceedings; or

(c) Any representation by Customer in this Agreement or otherwise, made
to induce Bank to issue any Credit, is false in any material respect
when made; or 

(d) Customer is in default with respect to the Bank Credit Agreement and
such default(s) has (have) continued unremedied during the applicable
cure period(s) (or, provided and for so long as there is no demand for
payment by the Banks thereunder, in the case of Financial Covenants, as
defined in the Bank Credit Agreement, if such Financial Covenant
default(s) is (are) not waived by the Banks within 30 days from the date
upon which written notice thereof is given to the Customer by the
Agent); or

(e) Customer is in default with respect to that certain Indenture (the
"Indenture") dated as of September 24, 1997 between the Customer, The
Guarantors party thereto, and Harris Trust and Savings Bank as Trustee
covering the Customer s 9-3/4% Senior Notes Due 2007.


then all of the Obligations shall, at Bank's option and without notice
or demand, mature and become immediately due and payable with interest
at the per annum rate which is 2.50 percentage points in excess of the
Prime Rate as herein defined and Bank shall have all rights and remedies
for default provided in the security documents described in Section 6,
as well as applicable law.

10.  NONWAIVER.  Bank and its correspondents shall have no duty to
exercise any rights hereunder or otherwise with respect to any documents
or instruments relative to a Credit and shall not be liable for any
failure or delay in doing so.  Bank shall not be deemed to have waived
any of its rights hereunder unless Bank shall have signed such waiver in
writing.

11.  NOTICES.  Any notice or demand to Customer given by Bank shall be
deemed to have been delivered when deposited in the mail or transmitted
by facsimile to a number provided Bank by Customer, with a copy sent
immediately thereafter by first-class mail, in either case addressed to
the last address of any Customer appearing on the books of Bank.

12.  INTERPRETATION.  

(a) If this Agreement is signed by more than one party, "Customer" shall
be deemed to refer to all of the undersigned, all Obligations of
Customer hereunder shall be joint and several and the liabilities of
each shall be absolute and unconditional, regardless of the liability of
any other party hereto.

(b) This Agreement shall be governed by and construed in accordance with
the laws of the State of Wisconsin, EXCEPT as otherwise expressly
provided herein or in any Credit, Bank may rely for interpretation of
any Credit or instruction or documents related thereto or issued under
on in purported compliance with any of the above, on the Uniform Customs
and Practices for Documentary Credits published by the International
Chamber of Commerce (revision in effect at the time of the issuance of
the Credit).

(c) The invalidity or enforceability of any provision or portion of this
Agreement or any instrument, document or agreement executed or made
pursuant to or by virtue of this Agreement, shall not affect the
validity or enforceability of any other provision or portion.

13.  DURATION AND EFFECT OF AGREEMENT.  This Agreement shall remain in
full force and effect and shall apply with respect to every standby
letter of credit issued by Bank, at the request of Customer prior to
receipt by Bank of written notice to the contrary from Customer.  This
Agreement supersedes all previous agreements and understandings, either
written or oral, between Customer and Bank respecting any standby letter
of credit issued by Bank at the request of Customer.  This Agreement
shall be binding upon Customer, its personal representatives, successors
and assigns and shall inure to the benefit of Bank, its successors and
assigns.




Dated at South Milwaukee this 21st day of
July, 1998.

Marine Bank and Savings

/s/William E. Shaw
Title: Senior Vice President



Bucyrus International, Inc.

By: /s/Daniel J. Smoke, VP and CFO
    Authorized Signature and Title

By: /s/J. F. Bosbous, Treasurer
    Authorized Signature and Title 


1100 Milwaukee Avenue
P. O. Box 500
South Milwaukee, WI   53172-0500