ParkTwain's Parlor

[jiesen]

breathtaking!

[ParkTwain]

Word to the Wise - Lithium production

For all you commodities- and fundamentals-oriented investors out there.

Interesting article (NOTE: dated December 2006) I just came across while checking out the ATH chart action for Rockwood Holdings (symbol: ROC):

http://www.resourceinvestor.com/pebble.asp?relid=27139

I would try to buy into this one at its 50DMA.

After doing a Google search about lithium mining, it seems there is controversy among mining and lithium technology analysts whether there will be shortage of lithium in the future, when it is supposed there will be millions of electric automobiles (with lithium-based batteries) produced around the world and thereby pushing upward the demand and prices of lithium.

For instance, check out this article and especially the comments found at the bottom of the page:

http://www.autobloggreen.com/2007/01/30/beyond-peak-oil-are-we-facing-peak-lithium/

In contrast, see these articles:

http://tyler.blogware.com/lithium_shortage.pdf

http://www.the-infoshop.com/press/ros42739_en.shtml

There is only one lithium mine in production in the U.S., at Silver Peak, in Esmeralda County (pop. 800), Nevada. (See http://www.nbmg.unr.edu/earthcache/C...ytonValley.pdf ) It is extracted by pumping water from deep underground onto an evaporation basin at the surface, then separating the lithium from the salts that remain after the evaporation. A large potential source of lithium is the Uyuni Salt Flats in Bolivia (see my next Exotic Photo of the Day in this thread), which might never be developed commercially due to its environmental uniqueness.

[ParkTwain]

Exotic Photo of the Day

Salar de Uyuni, Bolivia (an extensive salt lake desert)

http://www.flickr.com/photo_zoom.gne?id=274063716&size=l

http://www.flickr.com/search/?q=uyuni&s=int

http://en.wikipedia.org/wiki/Salar_de_Uyuni

[jiesen]

For all you commodities- and fundamentals-oriented investors out there.

Interesting article (NOTE: dated December 2006) I just came across while checking out the ATH chart action for Rockwood Holdings (symbol: ROC):

http://www.resourceinvestor.com/pebble.asp?relid=27139

I would try to buy into this one at its 50DMA.

After doing a Google search about lithium mining, it seems there is controversy among mining and lithium technology analysts whether there will be shortage of lithium in the future, when it is supposed there will be millions of electric automobiles (with lithium-based batteries) produced around the world and thereby pushing upward the demand and prices of lithium.

For instance, check out this article and especially the comments found at the bottom of the page:

http://www.autobloggreen.com/2007/01/30/beyond-peak-oil-are-we-facing-peak-lithium/

In contrast, see these articles:

http://tyler.blogware.com/lithium_shortage.pdf

http://www.the-infoshop.com/press/ros42739_en.shtml

There is only one lithium mine in production in the U.S., at Silver Peak, in Esmeralda County (pop. 800), Nevada. (See http://www.nbmg.unr.edu/earthcache/C...ytonValley.pdf ) It is extracted by pumping water from deep underground onto an evaporation basin at the surface, then separating the lithium from the salts that remain after the evaporation. A large potential source of lithium is the Uyuni Salt Flats in Bolivia (see my next Exotic Photo of the Day in this thread), which might never be developed commercially due to its environmental uniqueness.

Great stuff there, Park!

As far as lithium demand goes- these articles are rather shortsighted, imo. They look out 3 years to the demand increase from batteries. But I think this might pale in comparison to the demand 30-50 years out when thousands of fusion reactors need to begin construction. This could take upwards of 10% of the world's current Li reserves (12,000,000 tonnes).

http://www.iter.org/a/index_faq.htm

At any rate, ROC seems to be well-positioned to take advantage of the situation, and could be a big winner over either a 3 year or a 30 year time-horizon.

It's definitely worth a closer look. Thanks for the find!

[jiesen]

http://www.iter.org/a/index_faq.htm


You'll have to look under the Tritium section of the ITER FAQ for the lithium info, but this is what you'll find:

Is shortage of lithium a problem?

The actual amount of Li consumed in fusion to produce tritium is 2.6 t /GW(electric)/year. This means a typical eventual deployment of fusion based on DT - perhaps 1000 1 GW(e) reactors worldwide - would consume ~3kt/year. Given that proven resources of easily recoverable lithium (<$50/kg) are in the range of 12 MT, this doesn't look to be a problem.

Of course things are not quite that simple. First the amount of lithium used in designs of tritium-breeding blankets for reactors is about 100-1000 t/GW(e). This means up to 1 MT of lithium is locked up in 1000 reactors. In some designs e.g. with lithium-lead coolant/breeder materials the lithium consumed can be replaced on-line and the lithium-bearing materials decanted and re-used in the subsequent generation of reactors. The loss in this case is just the consumption figure. In other designs e.g. with ceramic breeder materials, these would have to be recycled after removal from the reactor to allow their lithium to be fully utilised. Economics will dictate the pace and need for that.

The standard lithium resource figures are based on normal mining techniques and extraction from brines. With increasing demand for lithium other reserves will become economical. Lithium is found in the earth's crust at about 30 ppm, comparable to materials used for special steels or to fuel fission reactors. It is also found in the sea at 0.2 ppm, and these resources in both cases would be at least 3 orders of magnitude higher than today's economically recoverable resources. The question will always be the economics of such extraction, but even today desalination of seawater produces lithium salts as a by-product, which could in future provide a sufficiently concentrated feedstock for an economically competitive extraction process.

Thus lithium reserves are not a show-stopper for the full deployment of fusion as a worldwide energy source, and use for minimum of 1000 years. There will be competition for resources - for batteries as well as for structural materials in aircraft and cars - but the resource base can take it.

[IIC]

You are quite the Shutter Bug Park...I do enjoy viewing them...Many are very interesting...Are some of these photos that you took?

[jiesen]

For all you commodities- and fundamentals-oriented investors out there.

Interesting article (NOTE: dated December 2006) I just came across while checking out the ATH chart action for Rockwood Holdings (symbol: ROC):

http://www.resourceinvestor.com/pebble.asp?relid=27139

I would try to buy into this one at its 50DMA.

After doing a Google search about lithium mining, it seems there is controversy among mining and lithium technology analysts whether there will be shortage of lithium in the future, when it is supposed there will be millions of electric automobiles (with lithium-based batteries) produced around the world and thereby pushing upward the demand and prices of lithium.

For instance, check out this article and especially the comments found at the bottom of the page:

http://www.autobloggreen.com/2007/01/30/beyond-peak-oil-are-we-facing-peak-lithium/

In contrast, see these articles:

http://tyler.blogware.com/lithium_shortage.pdf

http://www.the-infoshop.com/press/ros42739_en.shtml

There is only one lithium mine in production in the U.S., at Silver Peak, in Esmeralda County (pop. 800), Nevada. (See http://www.nbmg.unr.edu/earthcache/C...ytonValley.pdf ) It is extracted by pumping water from deep underground onto an evaporation basin at the surface, then separating the lithium from the salts that remain after the evaporation. A large potential source of lithium is the Uyuni Salt Flats in Bolivia (see my next Exotic Photo of the Day in this thread), which might never be developed commercially due to its environmental uniqueness.

Hmm, lithium is already proving to be a winner for ROC:

http://biz.yahoo.com/ap/070430/earns_rockwood.html?.v=1

Rockwood Holdings 1Q Profit Surges
Monday April 30, 12:01 pm ET Rockwood Holdings 1Q Profit Jumps After Subsidiary Sale, Higher Prices for Specialty Chemicals

PRINCETON, N.J. (AP) -- Specialty chemicals maker Rockwood Holdings Inc. said Monday its first-quarter profit more than tripled following the sale of a subsidiary. Shares jumped 76 cents, or 2.5 percent, to $30.98 in morning trading on the New York Stock Exchange. Earlier in the session, they climbed to a new 52-week high of $33.25.


Quarterly earnings swelled to $145.3 million, or $1.93 per share, from $40 million, or 53 cents per share, in the prior-year period. Much of the gain came from Rockwood Holdings' $423.3 million sale of its Groupe Novasep subsidiary in January.

Excluding the sale and other special items, Rockwood Holdings said it earned 43 cents per share in the recent quarter. That beat Wall Street's expectations of 36 cents per share, according to a Thomson Financial analyst survey.
Sales rose to $796.1 million from $724.1 million, topping analysts' expectations of $777.5 million.
Chairman and Chief Executive Seifi Ghasemi said in a statement Rockwood Holdings' geographic diversity is helping to blunt the signs of economic slowdown in North America. The company's specialty chemicals unit also benefited from higher selling prices and increased volume of lithium products. The division saw particularly strong growth in the European automotive market.

[IIC]

Not 4 Nuttin'...But I thought of you Park when I read this:


Iowa Citizen Seeks Illegal Alien Status: An actual letter from an
Iowa resident and sent to his Senator:

The Honorable Tom Harkin
731 Hart Senate Office Building
Phone (202) 224 3254
WashingtonDC , 20510


Dear Senator Harkin,

As a native Iowan and excellent customer of the Internal Revenue
Service, I am writing to ask for your assistance. I have contacted
the Department of Homeland Security in an effort to determine the
process for becoming an illegal alien and they referred me to you.

My primary reason for wishing to change my status from U.S.
Citizen to illegal alien stems from the bill which was recently
passed by the Senate and for which you voted. If my understanding
of this bill's provisions is accurate, as an illegal alien who has been
in the United States for five years, all I need to do to become a citizen
is to pay a $2,000 fine and income taxes for three of the last five
years. I know a good deal when I see one and I am anxious to get
the process started before everyone figures it out.

Simply put, those of us who have been here legally have had to pay
taxes every year so I'm excited about the prospect of avoiding two
years of taxes in return for paying a $2,000 fine. Is there any way
that I can apply to be illegal retroactively? This would yield an excellent
result for me and my family because we paid heavy taxes in 2004
and 2005.

Additionally, as an illegal alien I could begin using the local
emergency room as my primary health care provider. Once
I have stopped paying premiums for medical insurance, my
accountant figures I could save almost $10,000 a year.

Another benefit in gaining illegal status would be that my
daughter would receive preferential treatment relative to her
law school applications, as well as "in-state" tuition rates for many
colleges throughout the United States for my son.

Lastly, I understand that illegal status would relieve me of the
burden of renewing my driver's license and making those burdensome
car insurance premiums. This is very important to me given that I
still have college age children driving my car.

If you would provide me with an outline of the process to become
illegal (retroactively if possible) and copies of the necessary
forms, I would be most appreciative.

Thank you for your assistance.

Your Loyal Constituent,

Donald Ruppert
Burlington , IA

[ParkTwain]

I'm wondering whether all illegals get free emergency health care, or if it's only the truly broke ones. I say this because illegals now can get bank accounts and other financial assets in the U.S., so maybe they would also show as having a credit report. The credit report would show whether you are truly broke.

[IIC]

I'm wondering whether all illegals get free emergency health care, or if it's only the truly broke ones. I say this because illegals now can get bank accounts and other financial assets in the U.S., so maybe they would also show as having a credit report. The credit report would show whether you are truly broke.

What type of credit report on an individual would tell you if the person was broke or not?...I never saw my net worth indicated on my credit report or FICO...Doug

[ParkTwain]

I don't think that the consumer sees the entire data set associated with the credit report. I think there are additional data about you that a business sees when they request the report.

Also, what is keeping anyone in the U.S. from reporting to a hospital and not identifying yourself truthfully as a U.S. citizen? Isn't it true that by law the hospital cannot insist on taking your citizenship data? The upshot would be that you probably would get crummy care at the end of the day's waiting list, but it might be substantially free?

[IIC]

I don't think that the consumer sees the entire data set associated with the credit report. I think there are additional data about you that a business sees when they request the report.

Also, what is keeping anyone in the U.S. from reporting to a hospital and not identifying yourself truthfully as a U.S. citizen? Isn't it true that by law the hospital cannot insist on taking your citizenship data? The upshot would be that you probably would get crummy care at the end of the day's waiting list, but it might be substantially free?

Maybe so...but I'd bet you a million bux you cannot figure out my net worth within a hundred grand...But we'll never know anyway 'cause I won't tell you if you are right.

I've only been to the emergency ward once in my life when my hand was cut...I don't recall them asking whether or not I was a citizen.

So...What are you suggesting?...Are you saying that all people in the U.S. w/o proper documentation should be immediately rounded up and deported???

[ParkTwain]

You posted the letter to Harkin! I was tying into the idea in that letter that an illegal isn't required to identify his citizenship status after entering the hospital door, so why should anyone else? You could get very slow, but perhaps substantially free, emergency style medical care. And you must use an alias to prevent the credit check scenario I mentioned.

Q: If any person enters a hospital emergency room for care and insists on not divulging citizenship status, name, etc., can the hospital insist on taking a fingerprint as part of giving its care?

[IIC]

You posted the letter to Harkin! I was tying into the idea in that letter that an illegal isn't required to identify his citizenship status after entering the hospital door, so why should anyone else? You could get very slow, but perhaps substantially free, emergency style medical care. And you must use an alias to prevent the credit check scenario I mentioned.

Q: If any person enters a hospital emergency room for care and insists on not divulging citizenship status, name, etc., can the hospital insist on taking a fingerprint as part of giving its care?

I don't know about now...but in the 80's it wasn't required.


Also, I don't know about Las Vegas...But I've take people to the emergency room several times in the past 10 years...They all had insurance...And the service was all SUPER SLOW...and they were not the same hospitals.

[ParkTwain]

Equity markets are imbibing cheap leverage

Snippet from yesterday's post @ Tim Knight's blog
//
Ken Fisher has a pretty good point where he talks about the spread between the E/P value (that's not a typo - earnings divided by price) and prevailing corporate interest rates. I'm paraphrasing, but his rationale goes something like this - the average P/E on the S&P 500 is about 17 right now, which means the E/P is akin to an interest rate of 5.8%.

However, the cost of borrowing money (for which a corporation can deduct the interest) is, once you factor the tax savings, less than 4%. So it's more economically efficient to borrow tons of cash and buy back stock. In his view, until that gap is closed, the market should continue to go higher. Assuming neither interest rates nor earnings (the "E") change, a rational value of the Dow would be at something like 18,000.
//

Also note this response embedded in the May 29 entry at Neiderhoffer's blog:

//
Alston Mabry writes:
Having spent a while recently as a spectator at a PE buyout, from the acquirer's point of view, I can offer this observation from the cheap seats. The PE craze appears to be fueled, just like the hedge fund industry, by cheap leverage. The buyout firms are using leverage at 5% to buy cash flow of 10% and pocketing the difference. On a $5B deal, that's $250M/year. And if a few years later somebody comes along and offers you a price you can't refuse, like Riverdeep did for Houghton, then so much the better.

So where's the weak point? Or is it a free lunch? If there were to be a downturn that pushed too many of those cash streams negative, but still the interest payments on the leverage keep coming due, then could some buyout groups get hurt?
//