Iofina Share Discussion Threads

[writz] 11/5/2015 07:32

Since nothing's going to change in last year's numbers, I take it there's something current they're waiting on.

[someuwin] 11/5/2015 07:31

Share Prophets ‏@ShareProphets 15 minutes ago
Just posted: Dog Iofina (#IOF) delays cal 2014 results day by 2 weeks - BAD SIGN

[jasisdad] 11/5/2015 07:29

To finalise its year end results! It's been nearly 5 months. Surely a company of this size doesn't need 5 months to finalise results. I work for a company we USD 6bn of revenue and our results were out by start of Feb!I was going to be buying more today in readiness for what I think will be good figures but think I will hold fire now!

[wizard2020] 11/5/2015 07:07

Don't like that at all - ie delay on finals

[che7win] 10/5/2015 22:56

Superg,
Interesting find on their costs.

As you know, I follow the copper and Peso closely as it indirectly affects us.

Chile is responsible for 30% of the worlds copper production so strong copper prices strengthen the Peso.

I'm pleased to say copper has been steadily rising since January, up 15% and the chart looking better. The Peso is lagging but responding positively - it has strengthen around 5% in the last couple of months.

This alone makes iodine production less competitive in Chile, so it is another reason why iodine prices are set to recover.

[madchick] 10/5/2015 22:28

I still think it's too early for offtake agreements, but surely they should have enough cash to build at least one extra plant / trial a mobile and / or relocate IO.1, so that they have some more production already on full tilt and fully tweaked when the iodine price rises. I fear they will end up scrambling in a manic rush to erect multiple plants all at one time in their eagerness to catch the rise and stuff it up in the process. A slow hand is good, but at least some movement is required (and more than head scratching) or you're effectively not playing at all!

I'm sure they must have considered this, and I have faith that all will come good in the end, but I'm just a bit mystified.

Let's hope all becomes clearer on Tuesday!

[woodpeckers] 10/5/2015 21:57

SG, I have complete faith in Lance's ability to 'put up'. He has truly weathered the storm here, battling through illness and forfeiting renumeration to put this company back on the road to where he always intended it to go.

His turn to smile.

[woodpeckers] 10/5/2015 21:07

naphar, you are completely on the nail. It's time to put up or shut up. As SG says, everything is panning out exactly as he says it would and I would expect IOF to be very aware of this.

The company now has a chance to put itself on the global map as far as iodine production is concerned, but it does need to act and I hope it is prepared to do that now, given the insight it must have had.

The phrase 'actions speak louder than words' couldn't be more appropriate. The fact that a lot of us (including monkey..!) are still here suggests that a huge amount of the original investors do believe that the company will step up to the mark.

An important week/month coming up and I'm hoping that Lance is feeling excited.

Looking forward to Tuesday.

[rhwillcoll] 10/5/2015 20:58

As SG said earlier, global copper prices are set to rapidly recover. Important for Chile iodine costs of production as strength of Chile Peso is positively correlated with world copper prices. So, we anticipate a further strengthening of the Chile Peso:

"Rio Tinto Bets on Rapid Copper Price recovery"



"Global copper prices will recover faster than expected with demand outstripping supply after two years rather than the three to four years previously predicted".

So, costs of Chile iodine production are set to rise for many reasons, with a major new factor now being the further strengthening of the Chile Peso/US Dollar near-term and medium-term.

[superg1] 10/5/2015 20:11

Che

I know it will be of an interest to you. I've found the figure that is directly affected by fluctuations in the exchange rate. The costs in the business that are paid in Pesos.

'A significant portion of the Company’s costs, particularly payroll, is denominated in Chilean pesos. Accordingly, an increase or decrease in the exchange rate against the U.S. dollar would affect the Company’s profit for the period. Approximately US$ 470 million of the Company’s costs are denominated in Chilean pesos.'

Also their power costs

'As of to-date, the SQM Group incurs an annual expenditure of approximately US$140 million associated with fuel, gas and equivalents, including approximately US$54 million related to direct electrical supply
consumption. A change of 10% in the prices of energy required for the Company’s operations may involve costs of approximately US$14 million in short-term movements.'

[serratia] 10/5/2015 17:24

Turkmenistan.

They have a programme to give everyone iodised salt. The Khazar plant produces 370 tons/yr of Potassium iodate and iodide. This is in excess of their needs. Maybe they haven't stopped production but continue with the salts.
The dietary need for iodine is 0.15 mg/d. that translates to around 37 tons for Turkmenistan. Kazakhstan also adds iodised salt needing up to 122 tons. Add in the local stans and that makes the output for the Khazar output.

hxxp://www.pitt.edu/~super7/44011-45001/44441-44451.ppt#340,35,Slide 35

[serratia] 10/5/2015 16:59

Statista collates production sales volumes.

hxxp://www.statista.com/statistics/264945/major-countries-in-iodine-production/

[superg1] 10/5/2015 16:03

Btw

Through last year the SQM team were more or less desk thumping determined to get the 1/3rd of the market share back.

This line appeared in their recent annual report

'Our strategy in our iodine business is to: (i) increase or at least maintain our market share in the iodine market'

[festario] 10/5/2015 15:01

Do you anticipate a 'change of broker' MM3? .... chuckle.

[superg1] 10/5/2015 12:32

I doubt they would want to go via the raw iodine sale route at the moment, as we know they wish to push as much as they can through expanded sales in the chemical division.

Another point mentioned in the presentations was they had demand for derivatives, but some on a scale that at the time that they simply didn't have enough iodine for. Low margin high volume products.

We know they had off-take agreements lined up but it's wise not to sign up to those while the price war was in play. IOF have been well aware of the problems pending for others, and it's been a case of getting the costs right, and being ready to react if the demand is there at the right price.

We should be at a turning point now that should unwind over the 2nd half of the year. The main remaining factor is the Cosayach situation as we don't know if they have continued with illegal operations on top of everything else.

In SQM's eyes it's one down and one to go. They don't see Algorta and others as a threat as those mines have high costs.

SQM expect to be able to take out Cosayach, they have had that thought process for some time, and see the fraud case as the final nail for Cosayach.

In the copper world they now forecast a turn over the next 2 years instead of 4/5. That will fit in nicely with Chile rising costs on tax and wages along with seawater use. If copper prices strengthen then so does the Peso. The weak Peso saved SQM $40 mill in opex last year with near record weakness just a few months back.

[naphar] 10/5/2015 12:11

Yes, but IOF still have to put themselves in a position to take advantage of it. They need to ramp up production to fill the gaps left by RB and the like. Whether thats by building plants themselves, "sponsorship" to build with offtake agreements, licensing the tech for decent royalties, etc, the time where we start seeing the evidence of the growth plans has to come. If it doesn't come soon, I find it difficult to understand why not, and how we will ever take advantage of this market. I have read all the reasons why plans have been "on hold", over and over, and getting somewhat fed up with the stalling. It must surely be time to start releasing the handbrake.

Rant over.

[superg1] 10/5/2015 08:45

Naphar

As I understand it the RB distributor was taking iodine from them at a 15% discount so I can't see any takers as they will have their own routes. So in theory end users will be left in the lurch.

Those end users will have at some time stuck two fingers up to the others by going after cheap RB iodine, now they are going to have to approach the suppliers they told to p off.

Interesting that Turmenistan stopped supplying iodine to India when it went below $35. I'm guessing they must have suspended production. That country does about 500mt per year.

The RB end plus SQM closed reduced production when compared to 2014 is a 3,300 mt drop. 3,800mt if we add in Turkmenistan. It could be 1000mt more depending on the SQM Nueve Victoria figures which don't add up.

SQM have forecast demand will rise 1400 mt this year

Roll on the Cosayach fraud case, as it should be the end for them too over the next year.

It will be interesting to see how end users react when they realise a 1600mt per year supply rate just dropped out of the market.

There is a big gap in iodine production terms developing, but it's been hidden by inventories.

[naphar] 10/5/2015 08:31

Well IOF will have to make some fast moves if its going to be them

[superg1] 10/5/2015 08:23

Following on from the RB monitor report on the 7th. The next day the court set out orders which included a direction to terminate the employment of all RB employees.



Btw the good old RB lot put out a rumour pre the death of RB, that they had a firm offer during the bid proceedings.

The approx 1600 mt that was supplied into the market last year has gone. By my reckoning they had about 400mt of inventory left early this year.

They has been selling at a rate in excess of production, so in theory whatever they has just about gone.

It will take some time for the disposal of all the assets.

The RB iodine distributor is going to have to find another supplier sharpish.

[superg1] 09/5/2015 19:14

1MM

That's more or less what is being said. SQM take it out cheaply and moth-ball it.
It's never been a reliable area, I think it was ACF minera that handed it over to Atacama minerals many years ago, they have never got it right in about 15 years at that mine.

They did that with Minera Falcon many moons ago, SQM said they did it to take capacity out of the Chilean production market. They bought it and closed it.

Their main site Neuve was also another acquisition as was the nearby Iris plant from DSM.

Hopefully this is now the start of the turn in the iodine market. If the Peso would just behave itself and keep following it's current pattern then all should be very rosy as we move through 2015.

The icing on the cake would be some swift (in Chile terms) action, and news re the Cosayach fraud. The amounts involved look company crushing for them.

The Errazuriz family and group of companies are being hit form all angles. $190 mill already ordered against them to pay 2 banks.

The Paraguay slavery case has been ongoing in the last week (2 bosses). The fraud case is in play over the next few months (Cosayach, 9 bosses affected I believe), $82 mill they will have to repay and fine options up to $328 mill on top of that.

Worst case scenario is $600 mill including the banks plus whatever comes out of the slavery case. They would fold under those figures, $272 mill is the minimum which would probably finish them anyway.

They will probably plough on until the bailiffs drag them away.

[1madmarky] 09/5/2015 14:03

SQM will pick up the assets if they are cheap enough just so no one else can enter the industry at that location. That's just common sense IMHO.

[bogg1e] 09/5/2015 13:16

Cheers SG.