the cream went sour

Little has been said about Penrice Soda's supply of soda ash to the mining industry. Supplying the mining industry with soda ash was to be the cream on the cake for Penrice but that cream went sour when the Global Financial Crisis struck. Penrice took a huge hit through no fault of its own.

Penrice had a contract to supply $10m worth of soda ash per year for five years to Windimurra Vanadium and that company went into receivership.

Compass Mining a subsidiary of Compass Resources signed a contract with Penrice in 2007 for the supply of soda ash but Compass Resources went into administration in January 2009.

Similarly Nickel Laterite projects fell over or delayed production all around the world when the nickel price collapsed.

Penrice has a contract to supply the giant Goro Nickel project in New Caledonia with soda ash but that project which originally was set to produce its first nickel in 2008 still does not appear to have got off the ground.

BHP's Ravensthorpe project was closed down.

Murrin Murrin delated its $300 million expansion etc and many of the contracts which Penrice had hoped to sign just disappeared.

But things are changing. Two small companies have signed a deal with the receiver of Windimurra Vanadium to get the company up and running again and hope to be in production in 2011.

BHP has sold its Ravensthorpe development to First Quantum, a Canadian Company and the last article I could find suggested that they hoped to be in production towards the end of 2011.

The nickel price is up around 30 percent from its lows at the depth of the GFC. I could not find any recent details regarding the Goro Nickel project but no doubt we will get an update shortly as annual reports come out.

All in all things are turning around for the mining projects that use soda ash. Hopefully Penrice wont ever again have to go running around the world trying to sell its excess soda ash at miserable prices as it had to in this last financial year.

GPASAS