14th Aug 2014 08:06
LONDON (Alliance News) - Iodine producer Iofina PLC Thursday said production was down in July compared with the previous month as one plant was hit by a lack of brine to process and the operator undertook an unplanned major site upgrade, but the company expects to achieve higher production in August.
The company said it produced 24.5 tonnes of crystalised iodine in July, down from 30.6 tonnes in June. However, it is expecting to produce 40 tonnes in August, exiting the month with a daily production rate of 1.7 tonnes when operating normally.
"We accomplished several critical tasks in the latter half of (July) and first week of August to position Iofina in an advantageous position to achieve maximum production for all plants," the company said in a statement.
It said its IO#2 plant had seen an immediate increase in production after recent maintenance, and it expects further significant increases in output once the operator finishes the site upgrade early next week. It also restarted its IO#5 plant towards the end of July, while IO#4 is undergoing an upgrade that is expected to boost production by between 150% and 200%. Production at IO#6 also started this week.
It said its revenue in July was about USD2.7 million.
"The iodine market continues to be challenging, but the company saw iodine prices remain steady in July. The company had near record sales again for the month which demonstrates good demand for our products and lower inventory levels than other iodine producers," Chairman Lance Baller said in a statement.
The company uses its technology to extract Iodine from brine water that's left over as a bi-product of oil and gas production. However, that means it's also competing with the hydraulic fracking industry, which also uses brine water as part of that process.
Iofina had already warned in April that production would be lower than planned this year because of its principal site operator's planned fracking schedule.
It said Thursday that its IO#2 plant had been hit by the operator's complete diversion of brine to temporary storage tanks used for nearby fracking activity. The site frequently had to run at lower capacity due to large amounts of incoming oil in brine, it said.
However, the operator is now working on an upgrade that will eliminate 98% of the oil in the brine water, which is expected to result in lower costs and increased efficiency at IO#2. Drilled wells in the area have also increased overall brine availability to the site, it added.
Baller said Iofina is targeting more consistent production.
"We are pleased to have all six plants in operation, and we are excited about the production potential from IO#6. While we are continuing to control costs, we need to achieve more consistent production results. We are on track for production guidance and are looking forward to the fracking schedule becoming less of a factor as the summer months come to a close," the Chairman said.
Still, Iofina shares were down 1.7% at 59.00 pence Thursday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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