SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

 (Mark One)
(x)     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended               September 30, 1998               
                                       or
          ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the transition period from                        to                      

Commission file number                      0-15661                           

                           AMCOL INTERNATIONAL CORPORATION                    
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                              <C>                       
                       Delaware                                  36-0724340                
(State or other jurisdiction of incorporation or organization)   (IRS Employer Identification No.)
</TABLE>

    1500 West Shure Drive, Suite 500, Arlington Heights, Illinois 60004-7803
               (Address of principal executive offices) (Zip Code)

                                 (847) 394-8730
              (Registrant's telephone number, including area code)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes         x              No               

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

                  Class                          Outstanding at October 20, 1998
         (Common stock, $.01 par value)                    27,084,284
<PAGE>
                         AMCOL INTERNATIONAL CORPORATION

                                      INDEX

Part I - Financial Information


Item 1            Financial Statements

                 Condensed Consolidated Balance Sheet -
                 September 30, 1998 and December 31, 1997                     1

                 Condensed Consolidated Statement of Operations -
                 nine months and three months ended September 30, 1998
                 and 1997                                                     2

                 Condensed Consolidated Statement of Cash Flows -
                 nine months ended September 30, 1998 and 1997                3

                 Notes to Condensed Consolidated Financial Statements         4


Item 2           Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                          6


Part II - Other Information


Item 6            Exhibits and Reports on Form 8-K                           13
<PAGE>
                     Part I, Item I - FINANCIAL INFORMATION
                AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
                                 (In thousands)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                       September 30,            December 31,
                                                                            1998                    1997
                                                                    ---------------------    -------------------
Current assets:                                                                                      *
<S>                                                                     <C>                      <C>      
     Cash and cash equivalents                                          $   5,977                $   3,077
     Accounts receivable, net                                             102,757                   89,611
     Inventories                                                           54,068                   49,389
     Prepaid expenses                                                       5,459                    5,109
     Current deferred tax asset                                             3,068                    3,084
         Total current assets                                             171,329                  150,270

Investment in and advances to joint ventures                                4,557                    3,035

Property, plant, equipment and mineral reserves                           319,064                  318,475
     Less accumulated depreciation                                        149,354                  143,151
                                                                          169,710                  175,324

Intangible assets, net                                                     16,573                   18,101
                                                                                              
Other long-term assets, net                                                 1,549                    4,279
                                                                        $ 363,718                $ 351,009

                                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Notes payable and current maturities of debt                       $  19,441                $  15,024
     Accounts payable                                                      25,991                   24,902
     Accrued liabilities                                                   34,510                   27,315
         Total current liabilities                                         79,942                   67,241

Long-term debt                                                             91,658                   94,425

Deferred credits and other liabilities                                     13,656                   13,400

Stockholders' equity:
     Common stock                                                             320                      320
     Additional paid-in capital                                            75,872                   75,939
     Foreign currency translation adjustment                                 (895)                  (1,749)
     Retained earnings                                                    122,680                  111,588
     Treasury stock                                                       (19,515)                 (10,155)
                                                                          178,462                  175,943
                                                                        $ 363,718                $ 351,009
</TABLE>

                  *Condensed from audited financial statements.

              The accompanying notes are an integral part of these
                         condensed financial statements.
<PAGE>
                AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)
           (In thousands, except number of shares and per share data)


<TABLE>
<CAPTION>
                                                Nine Months Ended                    Three Months Ended
                                                  September 30,                         September 30,
                                        ----------------------------------    ----------------------------------
                                             1998               1997               1998                1997
                                        ---------------    ---------------    ---------------     ---------------

<S>                                      <C>               <C>                 <C>                 <C>         
Net sales                                $    384,596      $    347,538        $    137,404        $    126,130
Cost of sales                                 303,874           273,683             107,302              97,789
     Gross profit                              80,722            73,855              30,102              28,341
General, selling and administrative
   expenses                                    49,973            43,830              18,189              15,086

     Operating profit                          30,749            30,025              11,913              13,255
Other income (expense):
     Interest expense, net                     (5,796)           (6,580)             (1,795)             (2,220)
     Other income, net                           (126)             (548)                309                  32
                                               (5,922)           (7,128)             (1,486)             (2,188)

     Income before income taxes                24,827            22,897              10,427              11,067
Income taxes                                    8,938             8,472               3,754               4,097

     Net income                          $     15,889      $     14,425        $      6,673        $      6,970

Weighted average common shares             28,201,685        28,483,408          27,903,626          28,426,228
Weighted average common and
     common equivalent shares              28,737,153        29,100,846          28,345,811          29,007,030

Earnings per share                                                                               
     Basic                               $        .56      $        .51        $        .24        $        .25
     Diluted                             $        .55      $        .50        $        .24        $        .24

Dividends declared per share             $        .17      $        .153       $        .06        $        .053
</TABLE>
<PAGE>
                AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)


<TABLE>
<CAPTION>
                                                                                  Nine Months Ended
                                                                                    September 30,
                                                                    ----------------------------------------------
                                                                           1998                      1997
                                                                    --------------------      --------------------
Cash flow from operating activities:
<S>                                                                      <C>                     <C>     
     Net income                                                          $ 15,889                $ 14,425
     Adjustments to reconcile net income to net cash
       provided by operating activities:
         Depreciation, depletion, and amortization                         24,567                  23,234
         Other                                                              1,814                     (82)
         Increase in current assets                                       (19,653)                   (780)
         Increase in current liabilities                                    8,284                   7,248

         Net cash provided by operations                                   30,901                  44,045

Cash flow from investing activities:
     Acquisition of land, mineral reserves,
        depreciable and intangible assets                                 (26,269)                (21,810)
     Sale of product line and mineral reserves                             13,176                       -
     Other                                                                 (2,334)                 (1,548)

         Net cash used in investing activities                            (15,427)                (23,358)

Cash flow from financing activities:
     Net change in outstanding debt                                         1,650                 (10,404)
     Dividends paid                                                        (4,797)                 (4,362)
     Treasury stock transactions                                           (9,427)                 (2,310)

         Net cash used in financing activities                            (12,574)                (17,076)

Net increase in cash and cash equivalents                                   2,900                   3,611

Cash and cash equivalents at beginning of period                            3,077                   3,054

Cash and cash equivalents at end of period                               $  5,977                $  6,665

Supplemental Disclosure of Cash Flows Information

Actual cash paid for:
     Interest                                                            $  5,306                $  5,450

     Income taxes                                                        $  5,478                $  5,641
</TABLE>

              The accompanying notes are an integral part of these
                         condensed financial statements.
<PAGE>
                AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                                 (In thousands)

Note 1:  BASIS OF PRESENTATION

     The  financial  information  included  herein,  other  than  the  condensed
consolidated  balance  sheet as of  December  31,  1997,  has been  prepared  by
management without audit by independent  certified public accountants who do not
express an opinion  thereon.  The  condensed  consolidated  balance  sheet as of
December  31,  1997,  has  been  derived  from  and  does  not  include  all the
disclosures  contained in the audited consolidated  financial statements for the
year ended  December 31, 1997. The  information  furnished  herein  includes all
adjustments  which are,  in the  opinion  of  management,  necessary  for a fair
statement of the results of the interim period,  and all such adjustments are of
a normal recurring nature.  Management recommends the accompanying  consolidated
financial  information be read in conjunction  with the  consolidated  financial
statements  and related  notes  included in the  Company's  1997 Form 10-K which
accompanies the 1997 Corporate Report.

     The results of operations  for the  nine-month  period ended  September 30,
1998, are not necessarily  indicative of the results to be expected for the full
year.

Note 2:  INVENTORIES

     Inventories at September 30, 1998,  have been valued using the same methods
as at December 31, 1997.  The  composition of inventories at September 30, 1998,
and December 31, 1997, was as follows:

<TABLE>
<CAPTION>
                                                                      September 30, 1998          December 31, 1997
                                                                    -----------------------     -----------------------

<S>                                                                         <C>                       <C>      
Crude stockpile and in-process inventories                                  $  39,050                 $  34,675
Other raw material, container and supplies inventories                         15,018                    14,714
                                                                            $  54,068                 $  49,389
</TABLE>

Note 3:  EARNINGS PER SHARE

     Basic earnings per share is computed by dividing net income by the weighted
average  number of common  shares  outstanding.  Diluted  earnings  per share is
computed  by  dividing  the net income by the  weighted  average  common  shares
outstanding  after  consideration  of  the  dilutive  effect  of  stock  options
outstanding  at the end of each  period.  The 1997 number of shares and earnings
per share  have been  restated  to  reflect  the  three-for-two  stock  split in
December 1997 and the adoption of SFAS No. 128.


<PAGE>
                AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                                 (In thousands)
                                  (continued)

Note 4:  DERIVATIVES

     From time to time,  the Company  uses  financial  derivatives,  principally
swaps,  forward  contracts and options in its management of foreign currency and
interest rate exposures.  These contracts  hedge  transactions  and balances for
periods consistent with the company's committed  exposures.  As of September 30,
1998, the only derivatives  outstanding were related to foreign currency hedging
and an  interest  rate  swap  with a  notional  amount  on  $15  million  of the
outstanding revolving credit.

Note 5:  COMPREHENSIVE INCOME

     During  1998,  the  Company  adopted  Statement  of  Financial   Accounting
Standards  ('SFAS")  No. 130,  "Reporting  Comprehensive  Income".  SFAS No. 130
establishes  standards for the reporting and display of comprehensive income and
its components (revenues,  expenses,  gains and losses) in a full set of general
purpose financial  statements,  and requires a total for comprehensive income to
be provided in condensed financial statements of interim periods.  Comprehensive
income  includes all changes in  stockholders'  equity  during the period except
those  relating  from  investments  by  owners  and   distributions  to  owners.
Comprehensive  income for the three- and nine-month  periods ended September 30,
1998 and 1997, consisted of the following:

<TABLE>
<CAPTION>
                                                               Nine Months Ended           Three Months Ended
                                                                 September 30,               September 30,
                                                               1998          1997          1998          1997
<S>                                                          <C>           <C>           <C>           <C>   
Net income                                                   $ 15,889      $14,425       $  6,673      $6,970
Other comprehensive income
  Foreign currency translation adjustment                         854        (4,757)          608        (2,808)
Comprehensive income                                         $ 16,743      $  9,668      $  7,281      $  4,162
</TABLE>
<PAGE>
           Item II - AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

 
     The  following  is   management's   discussion   and  analysis  of  certain
significant  factors which have affected the  Company's  financial  position and
operating  results  during the periods  included in the  accompanying  condensed
consolidated financial statements.

Nine Months Ended September 30, 1998 vs. 1997

     Net sales increased by $37.1 million,  or 10.7%.  Gross profit increased by
$6.9 million,  or 9.3%.  Operating profit increased by $.7 million, or 2.4%. Net
interest expense decreased by $.8 million,  or 11.9%. The effective tax rate for
1998 was 36% compared with 37% in the prior year. Earnings were $.55 per diluted
share  for the 1998  period,  compared  with  $.50  per  diluted  share  for the
prior-year period on 1.2% fewer weighted average shares outstanding.

A brief discussion by business segment follows:

<TABLE>
<CAPTION>
                                                          Nine Months Ended September 30,
                                -------------------------------------------------------------------------------------
                                          1998                        1997                      1998 vs. 1997
                                -------------------------     ----------------------      ---------------------------
Absorbent Polymers                                          (Dollars in Thousands)       $ Change            % Change
<S>                               <C>            <C>          <C>            <C>          <C>                <C>  
Net sales                         $ 160,625      100.0%       $ 141,668      100.0%       $ 18,957           13.4%
Cost of  sales                      127,763       79.5%         111,997       79.1%

   Gross profit                      32,862       20.5%          29,671       20.9%          3,191           10.8%
General, selling and
   administrative expenses            9,374        5.8%           8,952        6.3%            422            4.7%

   Operating profit                  23,488       14.7%          20,719       14.6%          2,769           13.4%
</TABLE>

     Revenues  increased  by $19.0  million,  or  13.4%,  over the  prior  year.
Approximately  65% of the revenue growth was acquisition  related.  Gross profit
margins decreased by 40 basis points, primarily as a result of the lower margins
associated with the acquired sales.

<TABLE>
<CAPTION>
                                                          Nine Months Ended September 30,
                                -------------------------------------------------------------------------------------
                                          1998                        1997                      1998 vs. 1997
                                -------------------------     ----------------------      ---------------------------
Minerals                                                    (Dollars in Thousands)       $ Change            % Change
<S>                               <C>            <C>          <C>            <C>          <C>                 <C> 
Net sales                         $ 122,959      100.0%       $ 117,647      100.0%       $  5,312            4.5%
Cost of  sales                      101,906       82.9%          97,930       83.2%                    

   Gross profit                      21,053       17.1%          19,717       16.8%          1,336            6.8%
General, selling and
   administrative expenses           13,545       11.0%          11,721       10.0%          1,824           15.6%

   Operating profit                   7,508        6.1%           7,996        6.8%           (488)          (6.1%)
</TABLE>

<PAGE>
                AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)

     Sales  increased by $5.3  million,  or 4.5%,  from the  prior-year  period.
Increased  sales from overseas  operations  accounted for all of the growth over
the prior year period,  offsetting  decreased  domestic sales resulting from the
sale of the fullers' earth business in April,  1998.  Much of the overseas sales
growth came from an acquired cat litter  business in the United  Kingdom,  which
has yet to be  profitable.  Overall  gross profit  margins  improved by 30 basis
points.  Domestic margin  improvement  was offset by significant  margin erosion
associated with the current U.K. cat litter  production  difficulties.  General,
selling and administrative expenses in the international markets,  including the
U.K., have increased, offsetting cost reductions made domestically.

     On April 20,  1998,  the  Company  sold its Mounds,  IL,  plant and mineral
reserves,  as well as its other fullers'  earth reserves in Paris,  TN, and Rock
Springs,  NV. The expected loss of sales of  approximately  $15 million per year
has had no adverse  impact on the  operating  profit of the  domestic cat litter
business.  The Company will no longer sell fullers' earth minerals  domestically
as agricultural  carriers,  oil and grease absorbents or traditional cat litter,
other than to the specialty pet and farm and fleet markets.

<TABLE>
<CAPTION>
                                                          Nine Months Ended September 30,
                                -------------------------------------------------------------------------------------
                                          1998                        1997                      1998 vs. 1997
                                -------------------------     ----------------------      ---------------------------
Environmental                                               (Dollars in Thousands)       $ Change            % Change
<S>                               <C>            <C>          <C>            <C>            <C>              <C>  
Net sales                         $ 77,420       100.0%       $ 66,524       100.0%         $10,896          16.4%
Cost of  sales                      53,369        68.9%         44,782        67.3%

   Gross profit                     24,051        31.1%         21,742        32.7%          2,309           10.6%
General, selling and
   administrative expenses          16,850        21.8%         13,492        20.3%          3,358           24.9%

   Operating profit                  7,201         9.3%          8,250        12.4%         (1,049)         (12.7%)
</TABLE>

     Sales  increased  by $10.9  million,  or 16.4%,  over the prior year,  with
approximately  50% of the  increase  coming from  overseas  acquisitions.  Gross
profit  margins  declined  by 160 basis  points,  primarily  as a result of less
favorable  domestic product mix. General,  selling and  administrative  expenses
increased  by $3.4  million,  or  24.9%,  reflecting  the  higher  international
marketing and expanded international infrastructure.

     Cost  reduction  steps  have  been  made  to  bring  selling,  general  and
administrative  expenses  in line with the lower rate of sales  growth and lower
gross profit  margins.  The impact of these  measures will be realized in future
quarters.
<PAGE>
                AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)

<TABLE>
<CAPTION>
                                                          Nine Months Ended September 30,
                                -------------------------------------------------------------------------------------
                                          1998                        1997                      1998 vs. 1997
                                -------------------------     ----------------------      ---------------------------
Transportation                                              (Dollars in Thousands)       $ Change            % Change
<S>                               <C>            <C>          <C>            <C>          <C>                 <C> 
Net sales                         $ 23,592       100.0%       $ 21,699       100.0%       $  1,893            8.7%
Cost of  sales                      20,836        88.3%         18,974        87.4%

   Gross profit                      2,756        11.7%          2,725        12.6%             31            1.1%
General, selling and
   administrative expenses           1,522         6.5%          1,515         7.0%              7             .5%

   Operating profit                  1,234         5.2%          1,210         5.6%             24            2.0%
</TABLE>

     Revenues increased $1.9 million,  or 8.7%. Gross profit margins declined by
110 basis points as a result of lower aggregate brokerage volumes and margins.

<TABLE>
<CAPTION>
                                                          Nine Months Ended September 30,
                                -------------------------------------------------------------------------------------
                                          1998                        1997                      1998 vs. 1997
                                -------------------------     ----------------------      ---------------------------
Corporate                                                   (Dollars in Thousands)       $ Change            % Change
General, selling and
<S>                               <C>                         <C>                         <C>                 <C> 
   administrative expenses        $  8,682                    $  8,150                    $    532            6.5%

   Operating loss                   (8,682)                     (8,150)                       (532)           6.5%
</TABLE>

     Corporate costs include management  information  systems,  human resources,
investor relations and corporate communications, corporate finance and corporate
governance costs. The start-up of the nanocomposite business is also included in
the corporate costs.

Three Months Ended September 30, 1998 vs. 1997

     Net sales increased by $11.3 million, or 8.9%, while gross profit increased
by $1.8 million, or 6.2%. However,  operating profit was $1.3 million, or 10.1%,
lower than the previous  year period.  The lower  operating  profit was entirely
attributable  to change  in the  results  of the U.K.  minerals  operation.  Net
interest  expense was $.4 million,  or 19.1% lower than the prior year  quarter.
The  effective  income tax rate in 1998 was 36%  compared  with 37% in the prior
year period.  Diluted earnings were $.24 per share for the 1998 quarter compared
with $.24 per diluted share for the  prior-year  quarter on 2.3% fewer  weighted
average shares outstanding.
<PAGE>
                AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)

A brief discussion by business segment follows:

<TABLE>
<CAPTION>
                                                            Quarter Ended September 30,
                                -------------------------------------------------------------------------------------
                                          1998                        1997                      1998 vs. 1997
                                -------------------------     ----------------------      ---------------------------
Absorbent Polymers                                          (Dollars in Thousands)       $ Change            % Change
<S>                               <C>             <C>         <C>             <C>         <C>                 <C> 
Net sales                         $ 53,922        100.0%      $ 51,466        100.0%      $  2,456            4.8%
Cost of  sales                      42,315         78.5%        40,218         78.1%

   Gross profit                     11,607         21.5%        11,248         21.9%           359            3.2%
General, selling and
   administrative expenses           3,213          6.0%         3,332          6.5%          (119)          (3.6%)

   Operating profit                  8,394         15.5%         7,916         15.4%           478            6.0%
</TABLE>

     Revenues increased by $2.5 million,  or 4.8%, over the prior-year  quarter,
as a result of incremental sales from the U.K. acquisition. Gross profit margins
decreased  by 40 basis  points,  primarily  as a  result  of the  lower  margins
associated with the acquired  sales.  Operating  margins  improved from 15.4% to
15.5% as a result of cost control.

<TABLE>
<CAPTION>
                                                            Quarter Ended September 30,
                                -------------------------------------------------------------------------------------
                                          1998                        1997                      1998 vs. 1997
                                -------------------------     ----------------------      ---------------------------
Minerals                                                    (Dollars in Thousands)       $ Change            % Change
<S>                               <C>            <C>          <C>            <C>          <C>                <C>   
Net sales                         $ 39,077       100.0%       $ 39,826       100.0%       $   (749)          (1.9%)
Cost of  sales                      32,267        82.6%         32,614        81.9%

   Gross profit                      6,810        17.4%          7,212        18.1%           (402)          (5.6%)
General, selling and
   administrative expenses           5,043        12.9%          3,925         9.9%          1,118           28.5%

   Operating profit                  1,767         4.5%          3,287         8.2%         (1,520)         (46.2)%
</TABLE>

     Sales  decreased  by $.7  million,  or 1.9%,  over the  prior-year  period.
Overseas sales growth did not offset the decreased domestic sales resulting from
the  fullers'  earth  divestiture.  Gross profit  margins  decreased by 70 basis
points. Lower profitability from the United Kingdom minerals operation accounted
for the margin  decline,  as well as the $.4 million  shortfall  in gross profit
from the prior year quarter.  The $1.1 million increase in general,  selling and
administrative  expenses resulted from increased  overseas  activities,  both in
Europe and Asia.

<PAGE>
                AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)

<TABLE>
<CAPTION>
                                                            Quarter Ended September 30,
                                -------------------------------------------------------------------------------------
                                          1998                        1997                      1998 vs. 1997
                                -------------------------     ----------------------      ---------------------------
Environmental                                               (Dollars in Thousands)       $ Change            % Change
<S>                               <C>             <C>         <C>             <C>         <C>                <C>  
Net sales                         $ 35,179        100.0%      $ 27,181        100.0%      $  7,998           29.4%
Cost of  sales                      24,524         69.7%        18,244         67.1%

   Gross profit                     10,655         30.3%         8,937         32.9%         1,718           19.2%
General, selling and
   administrative expenses           6,330         18.0%         4,618         17.0%         1,712           37.1%

   Operating profit                  4,325         12.3%         4,319         15.9%             6             .1%
</TABLE>

     Sales  increased by $8.0 million,  or 29.4%,  over the prior-year  quarter,
with  approximately 47% of the increase coming from  acquisitions.  Gross profit
margins decreased by 260 basis points, as a result of a less favorable  domestic
product mix.  General,  selling and  administrative  expenses  increased by $1.7
million,  or 37.1%,  reflecting  the higher costs and  increased  infrastructure
associated with the overseas expansion.

<TABLE>
<CAPTION>
                                                            Quarter Ended September 30,
                                -------------------------------------------------------------------------------------
                                          1998                        1997                      1998 vs. 1997
                                -------------------------     ----------------------      ---------------------------
Transportation                                              (Dollars in Thousands)       $ Change            % Change
<S>                               <C>             <C>         <C>             <C>         <C>                <C>  
Net sales                         $  9,226        100.0%      $  7,657        100.0%      $  1,569           20.5%
Cost of  sales                       8,196         88.8%         6,713         87.7%

   Gross profit                      1,030         11.2%           944         12.3%            86            9.1%
General, selling and
   administrative expenses             522          5.7%           500          6.5%            22            4.4%

   Operating profit                    508          5.5%           444          5.8%            64           14.4%
</TABLE>

     Revenues  increased 20.5% and operating  profits  improved by 14.4%.  Gross
profit  margins  declined as a result of increased  competition in the brokerage
market.

<TABLE>
<CAPTION>
                                                            Quarter Ended September 30,
                                -------------------------------------------------------------------------------------
                                          1998                        1997                      1998 vs. 1997
                                -------------------------     ----------------------      ---------------------------
Corporate                                                   (Dollars in Thousands)       $ Change            % Change
General, selling and
<S>                               <C>                         <C>                         <C>                <C>  
   administrative expenses        $  3,081                    $  2,711                    $    370           13.6%

   Operating loss                   (3,081)                     (2,711)                       (370)          13.6%
</TABLE>

     The listing fee for the New York Stock  Exchange  accounted  for 45% of the
increase in corporate expenses.
<PAGE>
                AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)

Liquidity and Capital Resources

     At September 30, 1998, the Company had  outstanding  debt of $111.1 million
(including  both long- and  short-term  debt) and cash of $6.0 million  compared
with $109.4  million in debt and $3.1 million in cash at December 31, 1997.  The
long-term debt to total capitalization at September 30, 1998, was 33.9% compared
with 34.9% at December 31, 1997.

     The Company had a current  ratio of 2.14-to-1 at September  30, 1998,  with
approximately  $91.4 million in working  capital,  compared  with  2.23-to-1 and
$83.0 million, respectively, at December 31, 1997.

     Through  September 30, 1998, the Company paid dividends of $4.8 million and
acquired   property,   plant  and  equipment   totaling  $26.3  million.   These
expenditures,  plus $9.4 million in net treasury share transactions, were funded
from  operations  and from the $13.1 million sale proceeds of the fullers' earth
business.

     The  Company  had  $40.1  million  in  unused,  committed  credit  lines at
September 30, 1998. The Company is in the process of extending and expanding its
committed  credit lines.  These credit  facilities,  in  conjunction  with funds
generated from operations,  are adequate to fund the capital expenditure program
approved by the board of directors at this time.

Year 2000 Issues

     In 1997, the Company  commenced,  for all of its systems,  a Year 2000 date
conversion   project  to  address  all  necessary  code  changes,   testing  and
implementation. The evaluation stage is complete. The implementation phase is in
progress,  with expected  completion in mid-1999.  Many of the Company's systems
rely on purchased  software for which the Company  pays a  maintenance  fee. The
maintenance  fee covers the cost of system  upgrades,  including  the update for
Year 2000 issues.  Other  conversion costs are handled in the ordinary course of
business,  and are not  expected to be  material.  Regardless  of the  Company's
efforts, there can be no assurances that the systems of other companies on which
the Company's operations rely will also be converted in a timely manner, or that
any such  failure  by  another  company  would  have an  adverse  impact  on the
Company's systems. The Company does have a comprehensive disaster recovery plan.
Disaster  recovery  for  financial  and other  strategic  system is  provided at
alternate  locations  serviced  by  third  parties,  or  at   Company-maintained
facilities.

<PAGE>
                AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)

Forward Looking Statements

     This filing  contains  certain  forward-looking  statements  regarding  the
Company's  expected  performance  for future periods and actual results for such
periods may materially differ.  Such  forward-looking  statements are subject to
uncertainties,  which include,  but are not limited to, actual growth in AMCOL's
various markets,  utilization of the Company's plants, customer concentration in
the absorbent polymers segment,  operating costs, raw material prices,  weather,
currency exchange rates, and delays in development,  production and marketing of
new  products,  and other  factors  detailed  from time to time in the Company's
annual  report  and  other  reports  filed  with  the  Securities  and  Exchange
Commission.
<PAGE>
                           PART II - OTHER INFORMATION

Item 6:  Exhibits and Reports on Form 8-K

(a)  See Index to Exhibits immediately following the signature page.

(b)  No reports on Form 8-K have been filed during the quarter  ended  September
     30, 1998.

<PAGE>
                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                               AMCOL INTERNATIONAL CORPORATION


Date:    October 21, 1998      /s/ John Hughes
                               John Hughes
                               Chairman and Chief Executive Officer



Date:    October 21, 1998      /s/ Paul G. Shelton
                               Paul G. Shelton
                               Senior Vice President and Chief Financial Officer
<PAGE>
                                INDEX TO EXHIBITS


Exhibit
Number

3.1  Restated  Certificate of Incorporation of the Company (5), as amended (10),
     as amended (16)
3.2  Bylaws of the Company (10)
4    Article Four of the Company's Restated Certificate of Incorporation (5), as
     amended (16)
10.1 AMCOL  International  Corporation  1983 Incentive Stock Option Plan (1); as
     amended (3)
10.2 Executive Medical Reimbursement Plan (1)
10.3 Lease  Agreement  for office space dated  September  29, 1986,  between the
     Company and American National Bank and Trust Company of Chicago;  (1) First
     Amendment dated June 2, 1994 (8); Second Amendment dated June 2, 1997 (13)
10.4 AMCOL  International  Corporation 1987 Non-Qualified Stock Option Plan (2);
     as amended (6)
10.5 Change in Control Agreement dated April 1, 1997, by and between  Registrant
     and John Hughes (12)
10.6 Change in Control Agreement dated April 1, 1997, by and between  Registrant
     and Paul G. Shelton (12)
10.7 Change in  Control  Agreement  dated  February  16,  1998,  by and  between
     Registrant and Lawrence E. Washow (14)
10.8 Change  in  Control  Agreement  dated  February  7,  1996,  by and  between
     Registrant and Roger P. Palmer (10)
10.9 Change in Control Agreement dated April 1, 1997, by and between  Registrant
     and Peter L. Maul (12)
10.10AMCOL International  Corporation  Dividend  Reinvestment and Stock Purchase
     Plan (4); as amended (6)
10.11AMCOL  International  Corporation  1993 Stock Plan, as amended and restated
     (10)
10.12Credit  Agreement by and among AMCOL  International  Corporation and Harris
     Trust  and  Savings  Bank,  individually  and as agent,  NBD Bank,  LaSalle
     National Bank and the Northern Trust Company dated October 4, 1994, (7); as
     amended,  First Amendment to Credit Agreement dated September 25, 1995 (9),
     as amended,  Second Amendment to Credit Agreement dated March 28, 1996, and
     Third Amendment to Credit Agreement dated September 12, 1996 (11)
10.13Note  Agreement  dated  October  1,  1994,   between  AMCOL   International
     Corporation and Principal Mutual Life Insurance  Company,  (7); as amended,
     First Amendment of Note Agreement dated September 30, 1996 (11)
10.14Change  in  Control   Agreement  dated  August  21,  1996  by  and  between
     Registrant and Frank B. Wright, Jr. (11)
10.15Change  in  Control  Agreement  dated  February  17,  1998  by and  between
     Registrant and Gary L. Castagna (14)
10.16 AMCOL International Corporation 1998 Long-Term Incentive Plan (15)
27   Financial Data Schedule
                                    

(1)  Exhibit is incorporated by reference to the Registrant's Form 10 filed with
     the Securities and Exchange Commission on July 27, 1987.
(2)  Exhibit is  incorporated by reference to the  Registrant's  Form 10-K filed
     with the Securities and Exchange Commission for the year ended December 31,
     1988.
(3)  Exhibit is  incorporated by reference to the  Registrant's  Form 10-K filed
     with the Securities and Exchange Commission for the year ended December 31,
     1993.
(4)  Exhibit is  incorporated by reference to the  Registrant's  Form 10-K filed
     with the Securities and Exchange Commission for the year ended December 31,
     1992.
(5)  Exhibit is  incorporated  by reference to the  Registrant's  Form S-3 filed
     with the Securities and Exchange Commission on September 15, 1993.
(6)  Exhibit is  incorporated by reference to the  Registrant's  Form 10-K filed
     with the Securities and Exchange Commission for the year ended December 31,
     1993.
(7)  Exhibit is  incorporated by reference to the  Registrant's  Form 10-Q filed
     with the Securities and Exchange Commission for the quarter ended September
     30, 1994.
(8)  Exhibit is  incorporated by reference to the  Registrant's  Form 10-K filed
     with the Securities and Exchange Commission for the year ended December 31,
     1994.
(9)  Exhibit is  incorporated by reference to the  Registrant's  Form 10-Q filed
     with the Securities and Exchange Commission for the quarter ended September
     30, 1995.
(10) Exhibit is  incorporated by reference to the  Registrant's  Form 10-K filed
     with the Securities and Exchange Commission for the year ended December 31,
     1995.
(11) Exhibit is  incorporated by reference to the  Registrant's  Form 10-K filed
     with the Securities and Exchange Commission for the year ended December 31,
     1996.
(12) Exhibit is  incorporated by reference to the  Registrant's  Form 10-Q filed
     with the Securities and Exchange Commission for the quarter ended March 31,
     1997.
(13) Exhibit is  incorporated by reference to the  Registrant's  Form 10-Q filed
     with the Securities and Exchange  Commission for the quarter ended June 30,
     1997.
(14) Exhibit is  incorporated by reference to the  Registrant's  Form 10-K filed
     with the Securities and Exchange Commission for the year ended December 31,
     1997.
(15) Exhibit is  incorporated  by reference to the  Registrant's  Form S-8 (File
     333-56017)  filed with the  Securities  and Exchange  Commission on June 4,
     1998.
(16) Exhibit is  incorporated by reference to the  Registrant's  Form 10-Q filed
     with the Securities and Exchange  Commission for the quarter ended June 30,
     1998.