Iofina Share Discussion Threads

[superg1] 26/8/2014 10:06

Gad

It's been mentioned and to clarify that one, I believe Cosayach need to also build a pipeline across to the area where they just had the wells closed to get it there.

That is good news of course as it means Cosayach will stop their water theft and their opex will fly up.

However SQM (typically) are challenging the EIA permit to build that transfer pipeline.

On top of that I believe Cosayach never secured an EIA for Negreiros anyway, so imo they can't legally produce there even with seawater (they may apply for one.

Soledad is all sorted for them but the may have not have an EIA for Cala Cala either.

SQM are no doubt trying to stop them and at least delay the pipeline via the court case.

Either way if Cosayach are getting in line re seawater, and the associated material opex rise, all well and good.

However all those plans were well in advance of that German bank recently hitting them for $70 million.

At this rate SQM will be the last ones to act on seawater.

Thinking on desalination, if that happens, their needed capex to move (as planned re Pampa Blanca but suspended) will go well over $1 billion.

[1madmarky] 26/8/2014 09:42

With the amount of glass buildings around this could have a significant environmental impact as well. Will all depend on cost and pay back period, but sounds very promising and potentially good for us.

[gadolinium] 26/8/2014 09:38

Can't remember if this has already been posted:

Cosayach's Chile seawater pipeline on track for completion in 2014

By Laura Syrett
Published: Monday, 11 August 2014

The iodine miner has been in the spotlight this year over its use of water to support mining operations in the high altitude desert region of northeast Chile, but the company has told IM that its issues related to water access will soon be solved when its new seawater pipleline comes into operation later this year.

[superg1] 26/8/2014 09:33

Mr B don't start digging you'll get addicted.

SQM

I'm wondering whether the SQM major analysts have the slightest clue that SQM closed the El Toco mine and closed the iris plant at Neuve Victoria.

I have mentioned before that analysts seem to only take note and interest in financial reports, such as the year end financial report.

In that report they said:

"We believe that total demand will grow between 3-4% during 2014. Despite these positive signals, we believe our sales volumes could decrease during 2014 as uncertainty surrounding the production and sales volumes of our competitors continues."

They fail to mention their volumes may fall as they closed their El Toco mine (1700mt) and iris plant (estimate from old figures 800mt).

If those analysts waiting a month or two the annual report would have been out, but do they bother to read that (292 pages).

They would need to read the small print at the bottom of page 89 to be aware, but then would need to check a series of 300 to 400 page historical form 20-Fs to work out the impact of iris plant part (2013 form 359 pages with far more detail than the annual report).

So when analysts finally find out, they'll wonder why it was never stated, but SQM will say "It has, it's in our annual report and in our form 20-F" (651 pages combined).

"I know we call one area Maria Elena and show in our 2013 annual report that it does 1700mt per year, BUT we call it El Toco, and if you read the small print it does clearly state that the El Toco mine was suspended. Of course you may get confused that El Toco is just part of Maria Elena, but if you check from 20-F for 2011, it states that point, Maria Elena IS El Toco ".

"On the iris plant, yes it does not state where that is, and you may think it is connected to El Toco (if you read that bit), but if you read our historic form 20-F, you will see that is connected to Neuve Victoria. I thought you guys are analysts, we put out comprehensive reports, do you read them?"


I'm looking forward to future SQM reports and the exchanges they have in the conference calls.

I wonder if the water laws will get a mention this time around.

" If you read form 20-F 2013 page 13 of 359.............................. etc etc

Do analysts read them? I don't think so.

[rogerbridge] 26/8/2014 08:59

Big market should perovskit gain favour.

[mister big] 26/8/2014 08:39

Interesting article with reference to iodine .


wafer-thin solar cells transform glass fronts into power plants



Cities are eating up an increasing amount of heat and electricity. In order to reduce this consumption, buildings have to become increasingly efficient and integrate more renewable energies. New, printable photovoltaic semi-conductors could help to boost this trend. They enable solar films and modules to be produced, which transform windows or façades into electric power generators. A new market is being created for the manufacturers of solar glass and modules.

The race for the best solar cells material has a new candidate: Perowskit. No other semi-conductor has enabled researchers to succeed in achieving such a dramatic development in efficiency levels. "There is now an absolute hype surrounding Perowskit," says Thomas Unold, head of the Institute for Technologies (Institut für Technologien) at the Helmholtz-Centre Berlin.



Transparent power plant: Transparent solar films can be laminated in between window panes. This produces tinted glazing, which at the same time provides shade and eco-electricity. Photo: Heliatek / Smack Communications, Berlin

The mineral promises to be efficient and at the same time inexpensive. Up to now it has not been possible to combine both these characteristics: currently the best silicon cells achieve an efficiency level of over 20%, but are expensive to produce. Pigment and organic solar cells in turn can simply be printed on film, but often do not exceed an efficiency level just over ten percent.

With a Perowskit cell in contrast, the researchers at the University of California in Los Angeles (UCLA) recently achieved an efficiency level of 19.3 percent. Compared to the first Perowskit cells five years ago, the efficiency level has thus increased six-fold. This is all the more remarkable as Perowskit can be easily and very economically processed. It consists of the universal commodities carbon, nitrogen, hydrogen, lead, chlorine and iodine, which can be vapor-deposited onto glass as a wafer-thin layer or printed on film and foils. The UCLA researchers produced a Perowskit layer of just around one millimeter thickness by vaporizing glass with organic molecules and lead crystals. Nevertheless, the cell generates almost as much electricity as a 180 micro-meter thick silicon cell.

[superg1] 26/8/2014 08:18

Hmmmmmm

Re that desalination brief. If it is to be desalination only, then SQM have another problem. If you look at the capex for the others mentioned, then reduce the capex by an amount relative to the water SQM would need for all operations, it seems to amount to more than that planned $665 mill move. It certainly won't have been factored in.

Iodine prices.

Mid last year all were talking of expansion, by the end of the year it all changed, and continues to be the theme.

EG.

SQM were supposed to be on the move now and they planned to be heading towards 12,500 mt, but they closed operations and look to have reduced by 2,500mt to around 8,500mt (estimate having read their various documents)

Sirocco should have had their mill built by now and be in excess of 2000mt, but they postponed it (it will never appear imo) and now on a forecast 1000mt rate.

Algorta for them those H1 figures last year suggested they did about 1000mt but claimed they would do 3000mt for the year. The rumour is they have 'pulled back' and they have fallen silent for near a year now.

Bullmine. They too planned to go over 1000mt towards 2000mt, but the rumour is that they stopped mining Caliche a while back and were just leaching out existing heaps.

Cosayach as we know carried out some illegal practices, and pushed up production to a rumoured 3,750mt, which is around 2000mt more then they were on. They were selling cheaply to get some cash, and purposely trying to cause pain for SQM. As we now know SQM took them took court over the illegal operations. One manager imprisoned and 38 forced well closures which in theory knocks them back to at least under the 2000mt mark. The Cosayach family also have $70 mill to pay in a court case.

With the known pull back at SQM and Sirocco that is 3000mt that was being produced in 2012 to 2013, that isn't now.

If Bullmine have stopped that's an estimated 1000mt gone. Cosayach may well be back to old levels. They can increase production once they get their seawater, but that is not an issue price wise,as their opex will climb.

ON other bits.

RB/Sirocco are looking for significant funding of $50 mill plus, they are already over $200m in debt due to the lithium operation. Some loans are 15%, some capital payments have to be made every 6 months amounting to around $23 mill pa on top of the interest on other loans.

So RB are on the edge, they can't afford any mishaps over the next 6 months and there is no guarantee that someone will give them the cash.


The bit left is inventory.

Sirocco/RB we know have around 630mt.

Cosayach I think any inventory is unlikely as they were aggressive to undermine SQM.

SQM unknown, but with their pull back and closed operations, I doubt they are carrying a large inventory at this time. If they do have a large inventory the dropping of customers doesn't make sense, so I imagine they cover what the think they need for any events like an earthquake disrupting production.

Bullmine, if the rumours are right they simply won't have any in the near future.

Algorta/Acf Minera unknown, but they are Japanese connected, so any sniff of a shortage I suspect their inventory would be wiped out by the Japanese.

H2 tends to be the quiet period.

The one good sign that others may be running low was the fact that Sirocco/RB sold 515mt in Q2.
That is half of their forecast yearly production, and 200mt more than they produced for the period.

They will need to continue selling, in decent amounts to fund the lithium operation as stated in news. So they will not be in any way trying to build an inventory, they need to dump it fast.

That point may well have contributed to the lower prices, but it's also rumoured that Sirocco iodine wasn't up too scratch and they lost some end users in the US.

Then on top of the above, we know they expect demand to grow by 3.5% (1000mt) per year. SQM suggested it went up 2% last year (600mt), but they expect more this year.

If we then compare 2012 through 2014 demand rises and add on the production drops, it would seem in 2015, demand and SQM/RB drops in production, means there will be around a 5000mt gap v 2012 to 2013.

Cosayach had filled around 2000mt of that, but may well have had that wiped out.
They have a seawater pipeline being pursued but that significantly raises their costs

The above doesn't include any drops in production by Algorta and Bullmine.

What seems clear is that Algorta and Bullmine can't help out at these prices, SQM are not willing to, and overall have disposed of the use of over 3000 staff.

Cosayach have been prosecuted, wells closed, $70 mill to pay in another case (connected family)

Sirocco/RB in a serious cash situation and already have reduced production.


All of the negative moves by producers did not happen until very late 2013, and for others it's happened in H1 2014, so the full impact doesn't hit until 2015.

Cosayach until a couple of months back filled the gap, Sirocco are unloading their inventory.

So with all of the above, and knowing H1 is the active time re iodine buying, you can see why I think come H1 2015 the price will start to rise.

it all depends what the combined inventory is at the moment, but as I recall Q3/Q4 is around the time SQM do their contracts, and it looks like a lot of iodine production has gone off the market.

If iodine inventories are falling and the end users get a sniff of that, they move aggressively to secure iodine while it is on lows, that is the same in all markets, when such matters arise. That then accelerates the price move.

Hence with the apparent circs, it seems nailed on, that there will be an iodine demand greater than production supply through 2015.

[hurricane.] 25/8/2014 21:41

hxxp://www.indmin.com/Article/3372153/Iodine-prices-remain-stable-for-summer.html

Expecting buyers to return!

[che7win] 25/8/2014 21:02

More good news:

Price Briefing 15 – 21 August
Iodine prices flat while zircon risks losing market share to cheaper substitutes

Iodine
Prices for iodine have been broadly stable over the summer, sources have indicated to IM, raising hopes that the market slide may finally have come to a halt.

22 August 14 | Laura Syrett

[superg1] 25/8/2014 16:10

Great find Hurricane that is only the 2nd reference I have seen re the 150 rule and it reiterates the original point of desalinated water.

SQM quote 570 litre per second rights at their main site, so on that figure, that would give desalination costs on the mid price of around $12000 per hour.

I would imagine they run 2 shifts but in any case around 12 hours of operating day 24/7. That would give an extra cost of $50 mill pa at Neuve Victoria. If that was all loaded against iodine then it would mean an $8 per kg costs rise.

Half that with a Monday to Friday shift with weekends off. I doubt that is what they do, and the unions talk of the shifts.

All that opex before they even start to move it to up the 7000 feet, and inland with pumping stations.

The desalination point, if it does become law, is going to hit those already using seawater. From known references it would seem those folk are already at break even, or worse.

[bazzerp] 25/8/2014 15:54

ACT filtered

[napoleon 14th] 25/8/2014 14:57

ACT - filtered.
Ridiculous comments.

[humanoid] 25/8/2014 13:22

hxxp://www.federaltimes.com/article/20140814/ACQ04/308140009/NASA-looking-helium-supplier

[engelo] 25/8/2014 12:56

orslega OT: Believe NCT did a deal with Aminex which was rubber stamped at their EGM on Friday. Will look into it :-)

[arlington chetwynd talbot] 25/8/2014 12:27

Have you stopped beating your wife?

[orslega] 25/8/2014 12:15

engelo: in same vein, o/t watch out for NCT (Northcote Energy), operating in same territory as MAGP. Noli has done some excellent research on NCT assets. MAGT had a production update on Friday, hence large rise. NCT near term rise imo should be much bigger.


NCT news expected on a number of fronts short term - starting tomorrow.

[engelo] 25/8/2014 11:53

A bit OT, but: having a look at MAGP, which gives a bit of insight into activities of oilies where they are invested, eg Chesa and Devon.

'Magnolia Petroleum Plc is an AIM quoted, US focused, oil and gas exploration
and production company. Its portfolio includes interests in 170 producing and
non-producing assets, primarily located in the highly productive Bakken/Three
Forks Sanish hydrocarbon formations in North Dakota as well as the oil rich
Mississippi Lime and the substantial and proven Woodford and Hunton formations
in Oklahoma.'

[engelo] 25/8/2014 11:47

Hurricane: good link and highly readable, thanks. Another take on water shortages to put alongside SG's detailed analysis.

Going to be some time before desalination industry gets established in Chile and when there is pumping into the Andes will always add considerable costs to CAPEX and OPEX.

Agree with your first sentence :-)

[hurricane.] 25/8/2014 10:47

Iofina starting to look very interesting again

hxxp://www.kallman.com/shows/exponor_2015/pdfs/Desalination%20Industry%20Overview%20v4.pdf

[engelo] 25/8/2014 00:19

Chile: another 6.6 earthquake near valparaiso:

[arlington chetwynd talbot] 24/8/2014 20:37

One of the dodgiest of stocks on a very dodgy market... I like it.

[engelo] 24/8/2014 12:24

Extract from Wikipedia:

As of 2012 the United States National Helium Reserve accounted for 30 percent of the world's helium.[38] The reserve was expected to run out of helium in 2018.[38] Despite that a proposed bill in the United States Senate would allow the reserve to continue to sell the gas. Other large reserves were in the Hugoton in Kansas, United States and nearby gas fields of Kansas and the panhandles of Texas and Oklahoma. New helium plants were scheduled to open in 2012 in Qatar, Russia and the United States state of Wyoming but they were not expected to ease the shortage.[38]

edit was sceptical but the Wyoming plant is now operational:

hxxp://www.airproducts.co.uk/company/news-center/2014/06/0611-air-products-and-matheson-helium-production-begins-in-wyoming.aspx

[dcgray21] 24/8/2014 12:23

6 month strategic review kicked off mid / late April so should conclude mid October which is the same timeframe for the 90 day timeline on water . Would be nice to be able to flush any JV funds from water back into implementing the strategic review along with some Japanese supplier agreements - here's hoping .