Iofina Share Discussion Threads

[superg1] 15/6/2015 14:16

It depends what you want jb, I suspect good production will be one.

I anticipate they have a good idea with the direction of the the permit challenge by now.

They must have some sort of development plans to discuss too.

[jbe81] 15/6/2015 13:04

Shares very tightly held. a good update and some buying will make a big difference to the sp

[superg1] 15/6/2015 12:44

I understand IOF are in the UK now so probably some presentations due to start early this week.

It would be nice to get an update pre those but in any case we should hear a few bits.

[superg1] 15/6/2015 11:54

The Peso followed it Che, recovered and dropped back.

Just been caught taking a 'break' back to my diy prison.

[che7win] 15/6/2015 07:48

Cheers Superg,
Copper has recovered slightly this year, but it's fallen back a bit in the last month, worth watching.

[superg1] 15/6/2015 07:42

Che

I found the costs bit related to the Peso.

Last year US $470 mill worth. The Peso has depreciated over 30% since mid 2013.

That fits in with he $140-$150 mill cost savings they talked about. So now we have a rough figure to work from if the Peso ever seriously starts to recover. As you know copper prices are the main driver.

Costs for fuel and power US$140 mill with $54 mill of that for electric power.

I popped it in the header for future reference.

[superg1] 15/6/2015 06:56

SQM bits from the 2014 annual report covering recent topics.

This part shows the closed mines had higher costs.

Caliche ore deposits are located in northern Chile. During 2014, we operated two mines in this region:
Pedro de Valdivia and Nueva Victoria. Operations at the Pampa Blanca site and the El Toco mine(which is part of the María Elena site) were temporarily suspended in an effort to optimize our production facilities with lower production costs.

The NV site (Pampa Hermosa). It confirms the 570 litres per second water rights are unused. Cosayach were nicking 400 litres per second of those rights which killed off trees and plants in the national reserve due to aquifer depletion.

It seems therefore those rights are unusable.

Note they say 11000 mt but list the current capacity as 8,500 mt in the report. They actually produce 6000mt. The Iris plant is at the location it's still unclear why they turned it off. Possibilities include it costs more, but has been turned back on due to that Asia increased demand they mentioned.

The current news article seems to suggest that SQM are causing serious environmental damage by aquifer depletion on the current production rate of 6000mt.

Annual report comment re that location

In September 2010, CONAMA, currently known as the Environmental Evaluation Service, approved the environmental study of our Pampa Hermosa project in the Tarapacá Region of Chile. This approval allows us to increase the production capacity of our Nueva Victoria operations to 11,000 metric tons of iodine per year and to produce up to 1.2 million metric tons of nitrates, mine up to 33 million metric tons of caliche per year and use new water rights of up to 570.8 liters per second. In recent years, we have made investments in order to increase the water capacity in the Nueva Victoria operations from two water sources approved by the environmental study of Pampa Hermosa

Our water supply could be affected by geological changes or climate change
Our access to water may be impacted by changes in geology, climate change or other natural factors, such as wells drying up or reductions in the amount of water available in the wells or rivers from which we obtain water, that we cannot control. Any such change may have a material adverse effect on our business, financial condition and results of operations.

[superg1] 15/6/2015 06:01

That was the relaxing bit, my Mrs doesn't wait for B/H weekends for that much needed 27th kitchen (feels like it), new bathroom (current), re-redecorate etc etc. I only get to stop if any ironing needs doing :-). Hence a few fat fingers on that last post, I was caught on a 'break'.

[arlington chetwynd talbot] 14/6/2015 20:51

The reason Graham's research is useless is because it isn't research at all. It is completely biased due to being invested and seeks only to attempt to prove weakness in rivals that will alter the market towards his all too convenient conclusions.
He didn't see (or want to see) the problems here at all precisely because he is an awful researcher who builds illogical towers of reason upon the highly unlikely while dismissing the probable and the plausible completely.
So what does genuine research tell us?
Producers can easily continue to supply cheap iodine in the meduim-term and Iofina cannot move forward until this dynamic changes - survival mode.

[woodpeckers] 14/6/2015 19:53

See you've had another relaxing weekend SG, much appreciated, keep up the good work.

[rogerbridge] 14/6/2015 16:06

Well done SG, nice research.

[ansana] 14/6/2015 15:02

Yes excellent, thank you. Were you a terrier in a previous life?

[roboben] 14/6/2015 14:53

Excellent research, as usual, SG. Thanks!

[spike_1] 14/6/2015 14:36

Many thanks sg!

[superg1] 14/6/2015 14:04

Something wasn't right and going back through the years has identified exactly what.

Cosayach illegal wells hadd been masking a clear issue with aquifer depletion. It's the same problem with SQM normal production.

They need seawater at NV, trouble is they never planned for a pipeline as by now they expected to have moved the whole lot to Pampa Blanca.

Another question popped up for me. They produce 65% of their iodine at NV but don't seem to list nitrates. I will have to look deeper, but on first glance there is no like opex to spread the cost at NV which raises questions about their claimed opex for iodine. They do add a disclaimer in re the accuracy of how they spread the costs. I'll dig it out later (if I can find it)

[1madmarky] 14/6/2015 13:02

Would also explain some comments raised by the potash board members, that there was no or limited growth opportunities with SQM. Sure that's what I remember reading..... Fingers crossed, could get very interesting. GLA

[squire007] 14/6/2015 11:36

Cheers superg1 :-)

[j4ckster] 14/6/2015 11:32

The last para of this article also points out that local communities will be adding to the pressure that Tarapaca counsellors are placing on SQM.



"Meanwhile, sources linked to indigenous communities near the Salar de Llamara indicate that soon also be added to the request made counselors Tarapaca."

[superg1] 14/6/2015 11:05

Note the previous post.

Ignoring ACF for now (2000mt per year).

2006 and 2007 Rossi talks of the illegal extraction and environmental damage.

SQM + Cosayach combined production then was 5,200 (06) and 5,500 mt. (07)

2010 and 2011 combined, 10,800 and 11,200 when serious damage was being caused.

33 wells closed and talks of Cosayach back to 1800mt and reflected in the iodine shortage.

If correct then in 2012 would have seen a combined 7,800 mt.

2014 up pops a case where Cosayach have opened up wells again and had them closed down, 38 of them, reported theft of 400 litres per second.

Wells closed mid year in 2014. So 2nd half should have been at a yearly rate of 7,800mt.

Go back to 2006 and 7 and the complaints were ongoing at 5200 to 5500 mt.

That seems to indicate that even with the Cosayach wells closed last year then SQM water use would cause environmental damage.

I think SQM knew they were causing damage and flicked the Iris plant switch as and when to keep things under wraps, pointing a finger at Cosayach re illegal extraction.

Late 2014 Cosayach get a seawater pipeline.

From the news report a week ago.

'Located in the Salar de Llamara, the project received its RCA in 2010 aimed to increase the production of iodine in the industrial area in Nueva Victoria 6,500 tons annually achieving a capacity of 11,000 tons of the product.'

"Through a motion of agreement that included most members of the Regional Council of Tarapaca, in mid-April it was decided to refer to the mining environmental authority. According to the Minister Richard Godoy, Pampa Hermosa "has caused tremendous environmental damage."

Pampa Hermosa is the SQM Nueve Victoria mine.

SQM comments, sorry, SQM BS.

'We have a total production capacity of approximately 13,300 metric tons per year of iodine, including the Iris plant, which is located next to the Nueva Victoria plant.'


Somewhere in a recent report they mention expansion at NV, the one where they showed the same productions level 2013 but processed 17% less caliche (equal to 1000mt less iodine production)..

Damage and concerns in the area were in play when 5,200 to 5,500 was being produced.

In 2014 there is a yearly rate of 7,800mt, over 2300mt more than 06/07.

Yet SQM claim they can expand to 11,500mt at the location with their water rights making 13,300 mt with the Cosayach 1800mt.

It's all complete tosh, it's clear damage was being done at levels of extraction below what SQM do now, and that is what is said in that recent media comment.

With Cosayach out of the picture on the wells, they now know it's SQM also causing damage with legitimate water extraction.

Not forgetting that since 2007 they went into their worst ever drought which is continuing. I doubt that aquifer can cope with 4000mt let alone the amounts being produced now.

So on that point with the figures now dug out. SQM clearly have a problem at that location, a serious problem and that NV mine covers 20% of the market and 65% of SQM iodine production.

Now you can see why they want Cosayach put out of business, to pick up that seawater pipeline. They are in serious trouble if their rights are suspended, as is the iodine end user market.

[superg1] 14/6/2015 10:28

Cosaych/SQM and the relevant area Pozo Almonte. Some intersting bits

It seems that Rossi guy was going on about Cosayach illegal wells and environmental damage back in 2006 and 2007. He was involved when the courts closed 33 wells in early 2011, so obviously the issue had been going on for some time.

We know pre 2011 Cosayach were on about 6000mt of production illegally by stealing water from the aquifer. It seems they were causing environmental damage

SQM

Their NV mine in that location didn't feature until 2003 1,700 mt.

2005 2,200 mt

2006 3,400 mt The 1200 addition is the Iris plant they bought from DSM.


2009 now at 5,100 mt, 2012 near recent peaks of 6000mt.


So now rewind back to 2006 when Rossi is talking about illegal extraction of water, it must have been going on for a while.

2003 to 2005 the average production by SQM there was 2000 mt.

Up to the end of 2007 Cosayach were only doing 1800mt at the location.

'As reported by the company by filing an Environmental Impact Statement (EIS) entered the SEIA, which must be analyzed by the Regional Environmental Commission (COREMA) of the region of Tarapaca.
In technical terms, the project is to build on this iodine leaching solutions caliches, from a production of 1,800 tons / year, 6,000 tons / year.'

So the Rossi row with Cosayach was in play when they were on just 1800mt and SQM were doing 3,400mt (2006) total 5,200 mt.


2010 and through 2011 we know Cosayach hit 6000mt then they had the wells closed which took them back to 1800mt.

In 2010 SQM turned off their Iris plant in the run up of that case. Case complete they turned it back on again. Late 2013 in the run up to a 2nd Cosayach well closure case (May 14) they turned off the Iris plant. After the case was completed they turned it back on (Aug 14). I could never quite work out why they kept turning it on and off. Now I think I know why.

[superg1] 14/6/2015 09:13

People know oil.

If at the stroke of a pen Saudi Arabia, Iraq and Kuwait stopped supplying oil overnight and perhaps indefinitely, would it affect the oil price?

Would people know about it?, and would they buy oil stocks?

As you know it would be worldwide chaos and nothing else would make the news. The US and others would drill wells in a drilling frenzy.

That's how significant the production is in the Pozo Almonte area in the iodine world.

Does anyone know about it? Does anyone have the slightest clue? No, just a handful here. Where does the production frenzy start to fill the gap. There simply isn't anywhere to produce it. Short medium term SQM could truck in seawater at great expense, $40 plus per kg I suspect, just on opex, ask Bullmine, been there done that.

They could open up El Toco the high cost mine for about 1700mt.

PV mine is maxed out, ACF are maxed out and so on.

They may not suspend rights there, but if they do, now you know the impact it will have.

[superg1] 14/6/2015 08:44

The SQM and Cosayach recent news about environmental damage in the Pozo Almonte area.


In 2011 Cosayach had 33 illegal wells shut down, Cosayach had been going at 6000mt per tear and dropped to 1800. The water use was causing environmental damage

May 2014 they were found to be causing environmental damage again, 38 illegal wells closed down. SQM alleged Cosayach were using water that SQM had rights too and so Cosayach were dealt with for water theft.

Now here's my theory re recent events.

Media comments about environment dam,age caused by SQM using the aquifer water.

So they have closed Cosayach wells twice thinking that was causing the damage. BUT 12 months on the damage continues so it therefore must be SQM causing the damage under normal production but over the last few years it has been masked by the Cosayach theft of water.

A few days later we find that Rossi guy at Cosayach alleging the same things.

My guess is SQM have pointed a finger saying it must be Cosayach nicking water again. Although they now have a seawater pipeline.

So on that basis I believe there is a significant threat pending that the government will suspend water rights in the area.

Google alerts don't always work, most of the juicy bits I find are through using Spanish words and using the names of employees from the various companies.

If they suspend the water rights in the Pozo Almonte area then forget TA it won't cope with the iodine price change.

I have established a few facts recently.

SQM analysts and investors are oblivious to some SQM facts building behind scenes.

Iodine end users worldwide are oblivious to the potentially serious iodine shortage that could, and is likely to appear. One sniff of tight supplies and they will buy iodine aggressively and compound the problem.

[superg1] 14/6/2015 08:29

On the things we do know and can find details.

Sirocco RB

Forecast their ALP would be dumped and that their H2 2013 withdrawal from supplying excuse was a lie. $15 mill spent on a ball mill said to be a waste of money and would never be implemented, increased production just a lie.

I posted it here and had the same 'info' exchange with Simon Jackson the then president of the company, he disagreed in full but who was right. He resigned not long after the exchange so I didn't get the chance to throw some more findings at him. I said they would go bust and they have.

The 'wear' they kept going on about on the ALP from rough rocks was corrosion, all you had to do was ask the previous CEO as he understands iodine. He told them I'm believe, but the world class red back team that screwed Kinross to get that self-imposed title, didn't listen.

SQM

I said their expansion claims were BS as it was clear from old records that some mines were expensive and that they would need seawater. Having spotted some lies I mentioned at $31 share price for those interested in shorting that it would be a good bet to short SQM due to troubles on the way. I said the same with Sirocco way back at 60 cents plus.

Their current documented details expansion capability at NV are BS. The water needed for expansion held as water rights was used illegally by Cosayach and caused environmental damage. It was SQM themselves that brought the case. So they have identified use of those rights will cause environmental damage yet they claim they can expand their using that water ?????

Cosayach in the case as said to have extracted 400 litres per second. The SQM rights are for 570 litres per second. So it's not as if Cosayach exceeded that. So someone please tell me how SQM can use that water and expand.

But now there is no need, As pointed out in recent news, it seems SQM themselves have been causing serious environmental damage at the location themselves but with exiting use not extra use.

On that point having just typed it, I think I have an idea what the current news on both is all about.