It is true that liquifying coal is expensive. However, where did you get the idea that coal liquification is required for production of humic acid from weathered coal?
Here is a link discussing the process: http://www.anl.gov/PCS/acsfuel/preprint%20archive/Files/07_1_CINCINNATI_01-63_0018.pdf
The report specifically details the chemical process used to retrieve humic acid from 'weathered' coal.
Here is a link talking about Leonardite and other varieties of oxidized coal and humic acid production: http://previsemanufacturing.com/Library/Leonardite.htm
On the other hand, coal liquification is being pursued largely as a way to use coal to generate power while allowing greenhouse gases to be sequestered vs. released into the atmosphere. At this point, power plants are still building conventional coal burning plants because of the expenses involved in operating that type of plant. If Cap and Trade ever gets inflicted, the cost difference could dwindle and/or reverse.
All: Beware of HG's theories. He tends to grab onto ideas that seem to support his point of view, and runs with them, despite thier validity.
I am not an investor in CGA or CAGC, I am in Yong, but if thwey dont really have a business like the report says, that knocks out at least a competitor, I remember the CFO mentioned one of these by names as a competitorbut dont remember which one. Turns out the houji award and harvard award and the partnership with the farmers daily, even if seem like fluff PRs guarantees yong is legit at the very least. And if competitors get taken out can only be good in the long term maybe not so good in the short term. Or the report is fake, who knows anymore
What needed to be done by big shareholders in CGA and CAGC is now a must:
Go to China, and ask the management to demonstrate, in person, the humic acid manufacturing facilities in action. And ask some qualified chemical engineers from the US to assist in the investigation.
That is the only way to resolve it.
Here's a theory of mine on both CGA and CAGC - just a theory based on my research in making fulvic acid.
What if both CGA and CAGC would turn out to be cheating on making humic acid by themselves, instead of buying it directly from some real manufacturers in China?
Understand my basis is here: there isn't a well documented "cheap" process in liquefying coal. B/c the US has struggled for the last 20 years and the Congress still haven't approved the needed $bln investment on the liquefying facility yet, and the few companies doing it have been losing big money.
So, how was it possible that those two little companies in China was able to do it "cheaply" in liquefying brown coal?
And even sounded funnier, a "borrowed process from Japan"? That looks more like what a con artist would do or say in some money scheming act, isn't it?
I'm short both CGA and CAGC, as I documented since mid 2010.
The real difference in making fulvic acid from Leonardite coal and from the claimed "brown coal" is the processes used.
From Leonardite coal to fulvic acid, it is a chemical process, and there isn't a "liquefying" process involved, a thus it is a much cheaper process.
Liquefying coal, however, is a very expensive process, and it involves "gasification" of the coal, a very energy demanding process, and must be performed in a very expensive facility to do that efficiently. Check out the process used by the US.
I don't how much in the report were true, but as I pointed out last year that one really didn't need to go to China to be able to figure out that those numbers were fictional.
Which one of them will turn out to be worse, CAGC or CGA?
Based on that linked report, humic acid fertilizers are low margin products. Also, CGA's Henan production facility was idle?
"By 2004, there were 3000 companies in China making humic acid ......"
That's a lot of companies, which would explain the "low margin" claim, b/c the competitions would have been so intense.
Anyhow, I don't know why the investigator was unable to locate the sales offices and the company's subsidiaries, and that was very odd. He couldn't manage to buy a bottle of sample? That's just terrible.
Report also basically says there is no market for humic or fulvic acid. I guess he is condeming the whole Chinese organic fertilizer industry. Of course, this is totally against a lot of other literature I've read about fulvic acid (obviously that's why I'm invested in YONG). The market will sort out who is lying. Not going to lie, these type of reports scare the heck out of me with the large investment I have in YONG. But from everything I know, it seems YONG is running a legitimate, growing and profitable business.
Take these reports from 1 sided shorts with an agenda.... It's tough to find a product if you don't really look... CCME just went through it Citron couldn't find any internet presence nor anyone anywhere that heard of CCME of course since then a slew of internet links rate cards new catalog analysts etc... come out...
Also noticed, the report actually, unintentionally, validates YONG's vertical integration by buying up the special coal mine for fulvic acid production, the raw material.
Pay attention to that specific part on the raw material's sourcing - very difficult! And that is making a lot of sense for China, b/c one must have a certain type of coal to produce fulvic acid, which is used to derive humic acid.
Now, did CGA CEO say "brown coal" was treated as a waste, so that CGA was able to make humic acid cheaply from it? "Brown coal" is not the standard source material for fulvic acid.
And CGA has been actually producing humic acid by itself? I don't know. More research is needed on that one.