esi prospects

OK, I have seen what happens when a post queries the orthodoxy, and HC orthodoxies are a company is either rubbish or stellar. ESI orthodoxy is at the stellar end of the range.

I think ESI could go a long way, but they have issues common to a million other stocks.

ESI has some smarts, and should be able to use existing mechanical technology (like upsized brick clay extruders) to make its product, and get access to process, low grade heat to remove its extruded water using a simple counter mass flow drier.

BUT, they are not unique. In fact, Kos and his team saying the are the first and only etc etc… … is a principle reason why my portfolio contains no ESI. If they said they are competing in a difficult environment against other smart people with some good ideas and they need to make sure their smarts keep a little in front of everyone else’s, then maybe they would have some of my hard earned.

Even then maybe not, because they are turning brown coal into black coal, and even absent greenhouse the international black coal market is very competitive. IMO, many black coal buyers are simply doing what (for example) the Japanese did with iron ore and coal in the early 70’s, where after a major shortage in the late 50’s early 60’s they invested in dozens or start ups as a long term hedge, and flooded the markets for traded FeO and Coal. Guys, it took until the early 2000’s for the glut to run out. That’s why I think we see the Chinese, Indian and Japanese mills buying and developing coal supply. Specifically, I see the Indians (Tatar, Relliance et al) investing seed capital in dozens of these companies.

ESI compete against Exogen, GTL, White (yes I know – but they are in front at this stage), RWE, Grace (who bought the Lurgi technology late last year), BTR, Direct Gasification Services, Biotech/Linc and one of two others JUST in the brown coal beneficiation technology market. I am ignorant of whatever the Russians may have done in researching beneficiation of their reserves, or what may be happening under cover in the low grade areas of Powder River or other basins in the USA. Just Google clean coal and see how busy it is.

That is forgetting shallow, deep and live steam geothermal, near Metro CSG, wind, solar thermal and all the other greenhouse energy responses competing for Gov't subsidies etc etc.

Or the Brown Coal generators toughing it out 'cos they have no alternative.

Don’t assert I am saying these will be better. I am saying that ESI is competing in a very high visibility market with lots of other very smart people.

IMO, if they recognise this and tell their investors ‘this is chancy and difficult and we are working hard at it’ then that is consistent with my view of how a small cap should run its business. I brought one of the headline partners top this company, but only to diversify their risk. Not, repeat not, as the only game in town.

Suggesting that it is a lay-down-misere waiting to take off is a serious misrepresentation of the risks of investing in a small cap company.

Note again that I have no stock and a neutral sentiment

F111