Hey Refill,
Perhaps I can interject a point or two. First off, when Nightroads talked to Raoul it was the middle of October, which was the middle of the quarter with (6) weeks left not (2).
So when I commented on Nightroads post, I didn't notice the deteriorating health of the phosphate market which helps explain a little more to me on their decision making.
So when he talked to Raoul we were in our 4th month of steady declines from a steady price performance we had for quite a few months. Now I see we've actually lost roughly 40% in price since June. I couldn't believe our dumb luck when we're finally ready to roll.
I'm sure management thought, early in this decline, they could shave some costs and operate when they made this comment in the 10-11-13 Q "...Baolin is also builing a new processing plant near Gaoping property to reduce transportation costs".
Because this was a generic comment, it apppeared, at least to me, that the transportation distance was being addressed by avoiding the Baolin facilities altogether. I figured they must be farther from market in the opposite direction which wasn't the case at all after reading today's Q but clarified what they're actually doing.
From the Q:
" Baolin has a processing plant using a scrubbing processing which can process up to 100,000 t/a. However, Baolin has also built a new simple washing processing plant near Gaoping property to reduce the transportation cost."
Notice the word "built" (past tense) "a new simple washing processing plant". So with the more specific wording what they essentially have done is build the front end of their processing plant which entails the wash facility and cyclone separator. Not the full blown processing plant Baolin already has with floatation tanks, scrubber, etc. to complete the purifying/separation process. How will this reduce transportation cost? Simply put, phosphate, sand and quartz are encased in mud (clay) when mined. High pressure water then blasts the mud in a pit making a slurry which is pumped to the wash facility and separates the clay from the rest of the minerals in the cyclone separator. The clay reduction significantly reduces the weight that is then transported to the Baolin facility for further processing. It also makes sense economically because the costs of the remaining equipment wouldn't justify SGGV to purchase at this time and not get much bang for the buck removing the small amounts of sand, quartz and scrubbing gases out. They're saving a lot with the few pieces they're using, however. Clear as mud (pun intended, lol)
So in a nutshell, the processing facilities, as is, is ready to go. Perhaps when phosphate prices improve and production ramps up the cost of additional facilities will be justified.
The comment about "building the mining facility was slowed..." is separate. I think they know economies around the world are improving but phosphate prices will lag until inventory is delpleted by the upcoming planting seasons. One thing about cheap prices, that usually translates to increased usage I would think.
