Iofina rocked as earthquake leads to water restrictions

Shares in Iofina were under the pump on Monday after the iodine maker said an earthquake near its Oklahoma plants had reduced available supplies of water.

Iofina still predicted it would meet production targets of 260-300MT for the second half of the year even though the ramifications for the company's iodine production from the brine restrictions were not certain.

The magnitude 4.7 earthquake last week resulted in the Oklahoma Corporation Commission's Oil and Gas Conservation Division restricted salt water injection in the nearby area.

This will mean the coming weeks are expected to see a reduction of available brine to Iofina's IOsorb plants IO#3 and IO#5 in addition to a possible reduction of brine at plant IO#2.

Two other plants, IO#4 and IO#6, are not currently affected by the injection reduction plan, but are located in an area where operational changes could possibly apply at a later date.

"The board is currently estimating that this may reduce Iofina's current production rate of crystalline iodine between 10-20% on a per annum basis from its five operating plants."

Most of the affected sites had been injecting brine volumes in excess of required capacity as a means of protecting against potential shortages.

The full listed company said management were investigating other ways to increase water quality and iodine concentrations.

President and chief executive Tom Becker said: "We are pleased to be on track to meet H2 2015 crystalline iodine production guidance and we intend to provide an update to the market once the impact of this OCC decision is clearer."