Iofina Share Discussion Threads

[superg1] 04/12/2014 10:51

The trouble is with those Indmin ladies is that they get one angle then write a report. Most Companies won't tell them what price they are selling at.

We know they had to retract an IOF comment.

I note recently one of them stated that in SQM in news were pointing to bearish potash and iodine prices.

SQM stated they were seeing a rise in potash prices and due to events expected prices and demand to rise, that's why the SQM share price went north, so once more they misrepresented what was said.

SQM said they could see iodine prices declining in Q4 which is not surprising as Q4 is the lowest demand time as reported by IOF.

They have openly stated they expect Q4 to be the bottom and a chance that could happen in early 2015.

They know how much they are producing, they mention that inventory offloads are in play. They have also admitted driving the price down themselves to regain their market share, the only plausible reason for them to drive prices down is to finish off the weak Chile iodine mines.

H1 is the iodine action period and as we move through that an iodine shortage should become apparent.

The inventories don't seem to be anywhere near the level they were pre the 2011 chaos, so any material spanner in the works could prove very interesting.

The Chile Peso weakness helps on the iodine production costs but it puts pressure on employees wages. Some strikes have already started which is typical behaviour in Chile. I note there was a bit of a riot re the Iquique port over the last few days

[engelo] 04/12/2014 10:32

gad: I'm in London and so could get to the British Library. Do you have to set yourself up as a student or author in order to read things like Indmin reports? or can you just ask as a member of the public?

[engelo] 04/12/2014 10:27

Thanks for replies re SQM relationship. Means IOF will have a good idea of how long the iodine price war is going to last and this can feed into the timing of the next rollout.

For 2015 planning they need to balance IOF Chem expansion possibilities, iodine price, water permit outcome, JV potential for new plants, possibly other factors.

[gadolinium] 04/12/2014 10:25

Weird indeed Super, I agree it is difficult to make any sensible correlation between grade or order size from the figures, which is why I keep watching our 21.6 MT friend who has consistently reduced prices for the last six months.

Industrial Minerals see the bottom as not less than 25 $/kg, see below. I hope to read the full article later this month when I visit the British Library.
-----------------------------------------------------------------------

Iodine prices unlikely to crash below $25/kg

By Laura Syrett
Published: Tuesday, 02 December 2014

Industry insiders predict prices will dip below $30/kg, but not by much

The price of iodine is unlikely to fall below the $25/kg mark, industry observers have told IM.

Recent reports suggested that Chilean prices for the mineral had fallen to less than $30/kg in the...

[superg1] 04/12/2014 10:17

Just to add.

Iodine concentrations decline very slowly and it takes many years, that also is nothing like Oil rate declines.

Somewhere in the IOF archives it's in a document, 4/5 years back, I keep meaning to try and track it down, but others can have a go if they wish. It is out there somewhere. I recall reading it in 2011.

[superg1] 04/12/2014 10:03

Some weird prices there Gad, I've been watching. Recently over 10,000 kg for over 36 but lesser amounts for less which doesn't make sense.

We know from RB average prices they have been under-cutting the market rate.

Che

In the report it also says this.

'As the production age of the well increases, the oil production decreases and the water production increases'

That report as far as I'm aware is from the most comprehensive data ever compiled in the US, so I trust what it says.

Oklahoma is also the has the highest water cut per well in the US. As high as 10 to 1 even in the early production phase.

It was a survey of 31 O and G producing states

'The produced water questionnaire was sent to 31 state oil and gas agencies. We received information on produced water generation or management from 28 states.'

So the answer without a doubt is that brine does not decline in the way oil does.

If we think about it, this oil is basically long since decayed marine life in what was the sea, so naturally there is a hell of lot more water down there than oil. The iodine comes from seaweed or kelp.

The Oklahoma area was a large river estuary at one point, and obviously rich in kelp, hence the high iodine concentrations.

The last few posts is why I say if fracking declines it's good news, as the frack disruption is what has been reducing water going to plants.

Oil companies don't turn off producing wells they just cut back on new wells.

[gadolinium] 04/12/2014 09:52

I see our old friend Mr 21.6 MT is still selling 99.5% purity iodine in to the Indian market at knockdown prices. According to the Zauba site 21.6 MT were delivered on 21.11.14 at a price of 28.46 $/kg* (1760 INR/kg). This is the first time they have sold below 30 $/kg. Most other importers achieved prices in excess of this, the average for other importers being 32.04 $/kg in November.


*I am using Zauba's exchange rate of 61.85 INR/kg

[che7win] 04/12/2014 09:52

superg,
I have been looking at that topic, as in some areas, water declines when oil production does and we know that oil drops off quickly for fracked wells.

That incidentally means that if fracking in the US dropped off to any degree, oil production would quickly decline.

Why is the Bakken different to other areas for water volumes?

I'm struggling to find specific information on Oklahoma.

My questioning isn't the number of brine sites, but the brine supply to the existing plants we have.

[superg1] 04/12/2014 09:33

I have had a number of questions privately on the same topic, so I thought best to answer it here.

Q

Does the brine in oil wells decline in the same way oil production does.

The answer is NO.


Over the life of a well the ratio of water to oil increases, which tells you it doesn't follow the same reduction path.

Every time I try to look up similar topics it takes me back to a large survey in the US from 2007.

The U.S. ratio for 2007 reveals that 88% of the material brought to the surface for oil production is water. According to Weideman (1996), water can comprise as much as 98% of the material brought to the surface for crude oil wells nearing the end of their productive lives.

Using that 98% figure to get 30 barrels of oil per day towards the end of the life of a well it would mean 1500 barrels of water are coming up.

For Oklahoma it states in the report that there were 2,584 salt water disposal wells in 2007. IOF currently have plants at just 6. Plenty more SWDs will have appeared since then.

IOF talk of numerous sites available and 82,000 acres of brine leases secured. They will only secure leases where they identify commercial iodine production potential.

I hope that helps.

[superg1] 04/12/2014 07:39

I understand SQM and IOF get on very well. I believe IOF used to buy there iodine from SQM.

I know from time to time there were producer meetings in Chile that IOF attended.

That relationship remains the same, and from past exchanges, they don't think highly of the Cosayach set up, or certain aspects of RB energy.

[che7win] 04/12/2014 07:00

Best to stay on friendly terms if you want a friendly takeover I guess.

[henry9th1] 04/12/2014 02:43

I have been and checked, SQM and IOF still on very good terms.... very hot and sunny here!

[engelo] 03/12/2014 23:41

SG: many moons ago (2012?) Lance paid a visit to Chile and it was believed he went to talk to SQM. Subsequent to that he said if my memory is correct that IOF and SQM were on very good terms.

Any idea how this is playing out to-day, in particular since IOF announced their intentions of becoming No 1 in the world (the purpose/timing of which still baffles me)??

[trav5] 03/12/2014 22:21

Che,
Hopefully you are right, ultimately, this is what the company will be judged on going forward.

[engelo] 03/12/2014 22:16

At the risk of boring everyone: we have IOF Chem which solves all problems with the iodine price, record sales and making good money in the process :-))

[che7win] 03/12/2014 21:04

Superg,
The dollar appreciating is putting pressure on the iodine price.

As SQM isn't actively after RB energy, they will squeeze them out, they may be interested in buying the assets, if nothing else to stop a competitor getting them.

One other thing - the iodine market recovery is hard to predict, even for SQM as customers are letting inventory run down. I've mentioned this before, customers don't feel the need to keep inventory high as they see iodine getting cheaper and SQM mentioned that in their recent cc.

Meanwhile, we have distressed sellers such as RB Energy who have been dumping at any price.

IMHO.

[roboben] 03/12/2014 20:12

Free is good, but for me the alternative is a glass of ale rather than wine!

[superg1] 03/12/2014 20:04

Robo

It's free, and avoids the expense of a bottle of wine for the same desired result, so keep reading. In terms of choice..... hmmmmm water laws or wine ?

[roboben] 03/12/2014 19:57

Sancler & SG - Thank you for the erudite and civilised way in which you are conducting this debate.

I must confess that I find these legal matters decidedly soporific, but I do appreciate your quality posts.

[superg1] 03/12/2014 19:50

RB energy (has something happened)

When it was delisted from the TSX it appears it continued to trade on the OTC pink sheets market.

I think it was around 6/7 cents when it de-listed from the TSX. On the OTC market the price rose to 12 cents.

It went back down and has continued down at pace to under 2 cents. In the last 10 days it's down over 75%.

For the last 2 days the chart has flat-lined with some suggesting trading has ceased on OTC too.

In OTC terms volumes took off many multiples of the average in the last 5 days.

I'm wondering if the end is nigh for RB. I will keep watching.

[sancler] 03/12/2014 19:40

Having not, at the stage that I referred to the first Hearing Examiner, read the PDTD I was simply relying on the PDTG's reference to "this Hearing Examiner" as being contrasted with "the other Hearing Examiner". That was silly of me. As there had not previously been a "hearing" there could not have been a "Hearing Examiner". I stand corrected. (And I have now read the PDTD.)

My point, which I must have used the wrong words to try to express, was simply that until all available avenues to challenge a decision have been exhausted, it is possible that it could change. Given that one such avenue for challenge is objection, and we know there has been an objection, I think it is too early to say, simply on the grounds that a Hearing Examiner has found in Atlantis' favour, that "the applicant hits all the criteria". A valid, and sustained, objection could alter that. I am not saying that that is likely, just that it is possible.

[superg1] 03/12/2014 18:12

Sancler

Just to clarify a point so not to cause confusion. There is no 2nd hearing examiner, the decision is by the one and only hearing examiner it's been through. His decision having applied the law was to award it.

The preliminary determination to deny was a matter introduced by the water bureau.

The below was the decision maker for that.

Denise Biggar, Regional Manager
Glasgow Water Resources Office
Department of Natural Resources and Conservation



'If the applicant hits all the criteria, by law the permit has to be awarded'.
<<

Agreed, subject only to the substitution of the words "Once it has been properly judicially decided that " for the word "If "

So in the case of the initial PDTD . IF remains correct imo.

IF has since been turned into 'properly judicially decided' by the hearing examiner.

[sancler] 03/12/2014 18:02

superg1

>>
if you click on Yes on the permit site it brings the Full document up including the original preliminary determination to deny.
<<

That's where I got it from originally. I downloaded it on 16/10/2014 and then it only had the PDTG, down to page 14 of 14. I never thought to go back to see if they had altered it. But the document now there was, according to its properties, created on 28/10/2014. So that is when they must have added the original PDTD to it.

>>
'If the applicant hits all the criteria, by law the permit has to be awarded'.
<<

Agreed, subject only to the substitution of the words "Once it has been properly judicially decided that " for the word "If ".

It's the process of proper judicial decision-making that we are going through here.

To start with the judicial decision maker (the first Hearing Examiner) said that the applicant had hit some but not all of the criteria. Atlantis said "that may have been a judicial decision, but it was not a proper one. He got it wrong". So Atlantis got a "show cause" hearing.

At that, taking account of the evidence and argument produced in support of its "he got it wrong" contention, the next judicial decision maker (the second Hearing Examiner) agreed that the first one had got it wrong in relation to two of the criteria. He held that those were hit. That meant that all the criteria had now been hit. So the preliminary decision to award the permit was made.

Objection is just another stage in the process. Remember that the "Determination to Grant" is, expressly, "Preliminary". The objection process allows another interested party to say, in relation to the second Hearing Examiner (remembering that he incorporated some bits from the first Hearing Examiner), "he got it wrong".

If there's no objection, or the only objection/s are invalid, the Second Hearing Examiner's decision is taken to be right, not wrong and no longer "preliminary", and the permit is issued. But if there is a valid objection what falls to be tested is not, directly, whether or not Atlantis should get the permit. It is whether the decision that it has hit all the criteria is a proper judicial decision.

Neither of us can see, at the moment, any good grounds for saying that the second Hearing Examiner's decision was wrong. If an objection shows no arguable case that it was wrong (whether because it ignored relevant facts or because it misapplied the law) then my belief is that it would not be held to be valid. But if, even though neither of us can at the moment think what they might be, an objection raises grounds that get it through the validity test, a proper judicial decision will have to be made on the question of whether the relevant Hearing Examiner's judicial decision that the criterion concerned had been hit was a "proper" one.

That's what any further hearing will be about, and Atlantis and the objector/s will have opportunities to put their opposing views.

We could debate the "what is required to make an objection valid?" issue because that was concerned with the procedural rules and not with the factual specifics of this particular case. But any valid objection must, more or less by definition, be about the specifics of this case. It must, more or less by definition, raise something that neither of us has yet thought of.

Which is why, at least for now, I'd prefer to revert to my normal "just lurking" mode.