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Response to SEC April letter

AmerAlia,
Inc.

____________________________________________________________________________________________________________

                                                                       20971
East Smoky Hill Road

Centennial, CO 80015-5187

Telephone: (720) 876 2373 Facsimile: (720) 876 2374

June 3,
2005

Mr. H
Roger Schwall

Assistant
Director

Division
of Corporation Finance

Securities
and Exchange Commission

Washington
DC 20549-0405

Dear Mr.
Schwall

Re:
 AmerAlia,
Inc.

Form
10-KSB for year ended June 30, 2004

Form
10QSB for quarter ending September 30, 2004

Form
10QSB for quarter ending December 31, 2004

File
No. 0-15474

I refer
to your letter to this company dated April 22, 2005. We are pleased to tender
the following information in response to the points raised. We thank Mr. R. Baer
for his assistance. For convenience, we reproduce here your questions and
comments.

Engineering
Comments

General

      1.

      SEC:
      We note your assertion that you are the world’s largest and lowest cost
      producer of sodium bicarbonate. Supplementally provide a detailed analysis
      to support this statement.

      In
      our Form 10-KSB for the year ended June 30, 2004 under ITEM 1, we state
      “Our primary objective is to be the world’s largest and lowest cost
      producer of sodium bicarbonate.” Given the size of our competitors, we
      propose to delete “largest
      and”
      from this sentence in the future. However, we believe it is a realistic
      objective for us to be the lowest cost
producer.

Traditionally,
sodium bicarbonate is manufactured chemically from soda ash. We believe our
competitors use this process while we recover our natural sodium bicarbonate
using solution mining which we believe gives us significant production cost
advantages over chemically produced product.

Since we
use natural sodium bicarbonate as our source material in a manner that is
relatively simple compared with the chemical process sourcing soda ash as a raw
material used by our competitors, we believe we have a significant production
cost advantage.

      2.

      SEC:
      We note that you have disclosed in press releases that you have the
      largest available reserves of nahcolite in the world, and in another press
      release that you control over four billion tons of nahcolite. In your Form
      10-K, you also disclose that you currently have permits to mine 48,000
      tons per acre and in the same paragraph disclose that you have 9,543 acres
      under lease. With this information, one might surmise that you can mine
      458 million tons from your
leases.

Supplementary
to this letter we are sending to you a copy of a document entitled “Geologic
Framework of Federal Sodium Lease C-0118326, Piceance Creek Basin, Colorado”.
This report was prepared by Rex D. Cole, Ph.D. Consulting Geologist, Grand
Junction, Colorado in March 1983. The lease to which Cole refers is the Wolf
Ridge Lease, now owned by Natural Soda. Since the preparation of this report our
company and its predecessor entities have gained extensive mining and geological
experience with the resource. However, the Cole report remains a credible
general reference on the resource. On Page 3 of “Summary and Conclusions” the
report states “Total nahcolite resources for the lease area are between 6 and 8
billion tons.” We own four sodium leases of which the Wolf Ridge Lease is one;
therefore, our holdings extend beyond the particular lease to which Cole refers.
On this basis, we believe that we control in excess of 4 billion tons of
“in
situ resources”.

In
addition, in a report by Cole, Daub & Weston entitled “Review of Geology,
Mineral Resources, and Ground-Water Hydrology of the Green River Formation,
North-Central Piceance Creek Basin, Colorado” published by the Grand Junction
Geological Society, Grand Junction, Colorado, 1995”, the authors state
“subsequent drilling established that the world’s largest deposits of naturally
occurring sodium bicarbonate (nahcolite) are present in the Piceance Creek
basin” and “the estimated in-situ resources of nahcolite and dawsonite are
placed at 29 and 19 billion tons, respectively”.

We intend
to refer to these reports in future filings as references. We shall also include
information about the BLM approvals the company has to recover sodium
bicarbonate. As we have disclosed in recent Forms 10-QSB, we have BLM approval
to recover approximately 470,000 tons of sodium bicarbonate from our existing
wells. The BLM has also authorised us to recover up to 320,000 tons of sodium
bicarbonate from the new well we are now installing. Therefore, we currently
have approval to recover approximately 790,000 tons from our resource at this
time.

The new
mining permit allows us to mine 220 tons per linear foot of the new cavity which
is equivalent to 48,000 tons per acre. This cavity mines the Boies Bed, the
richest and most economically recoverable bed of nahcolite in the Piceance Creek
Basin. The Boies Bed does not cover the whole leased area and is, in any case,
one of a number of intervals containing nahcolite within our leases. Therefore,
it would be incorrect to surmise that we can mine 458 million tons from the
leases on the basis of applying our allowable recovery from a portion of the
Boies Bed to the entire area of our leases. We will clarify this in future
filings.

The
leases issued to Natural Soda, Inc. cover a total of 8,223 acres. When combined
with the Rock School Lease issued to Natural Soda Holdings, Inc., AmerAlia owns
leases covering a total of 9,543 acres. The only other sodium leases issued by
the BLM in the Piceance Creek basin, covering a total of 7,142 acres, are the
Yankee Gulch lease held by American Soda (now owned by Solvay) and the
Nielsen-Juhann-Hogle lease. Solvay has shut down its operations on the American
Soda lease because it could not economically transport the recovered liquor to
Parachute to produce sodium carbonate and sodium bicarbonate there and the other
lease requires extensive government approvals before it can be brought into
production. Therefore, we have the largest resource of nahcolite in the Piceance
Creek basin.

Generally,
we seek to avoid the use of the word “reserves” and use only the word
“resources” when we discuss the nahcolite located in the Piceance Creek basin or
available to us through our BLM leases. On those few occasions we have used
“reserves” in our publicly available information that use has been inadvertent
and should have referred to “resources” or “deposits”. Our current practice is
to state “we believe our deposits are unique and capable of producing sodium
bicarbonate and related sodium products for many generations” as we
report in our Form
10-KSB for the year ended June 30, 2004 under ITEM 1 (a). We intend to continue
this statement in future filings.

SEC:
Supplementally provide a detailed estimate of your nahcolite reserves, and
provide supporting information about your reserves to our engineer, as required
by Section C of SEC’s Industry Guide 7. This information should
include:

      ·

      Property,
      lease and geologic maps,

      ·

      Drill-hole
      maps showing drill
intercepts,

      ·

      Representative
      geologic cross-sections and drill
cores,

      ·

      A
      description of your procedures for estimating
      reserves,

      ·

      Copies
      of pertinent engineering and geological reports, and feasibility studies
      or operating plans (including cash flow
      analyses)

      ·

      Layout
      maps of your sodium production units, or at least a layout of your current
      well field,

      ·

      A
      summary of your operating permits and government approvals, and a
      description of how much sodium containing land you have permits to
      solution mine.

In
response to these enquiries we attach to this letter the following
graphics:

      Exhibit

      1

      Map
      of NSI leased area within State of Colorado

      2

      Eocene
      Basins

      3

      Saline
      Minerals in Green River Formation*

      4

      Detail
      Map of NSI leases

      5

      Geologic
      cross-section

      6

      General
      Stratigraphy (1)

      7

      General
      Stratigraphy (2)

      8

      Saline
      Zone

      9

      Stratigraphy
      of Uinita & Upper Green River Formations

      10

      Mine
      map showing cavities

      11

      Permit
      status report

      *
      Note the WRN leases shown on this graphic are now owned by
      NSI.

In our
supplementary information we also include a copy of the report by Cole and the
report by Cole, Daub & Weston referenced above.

SEC:
Provide the name and phone number for a technical person our engineer may call,
if he has technical questions about your reserves.

Please
refer all enquiries to Mr. Bill H. Gunn, phone (970) 948 0901.

      3.

      SEC:
      Supplementally provide us with a table showing annual revenues, annual
      operating costs (includes all operating costs directly chargeable to the
      product production facilities without including depreciation, depletion,
      amortization charges or corporate overhead) and annual operating profits
      or losses for your solution mining operations for the last three
      years.

      4.

      SEC:
      Supplementally provide a table of the last three years of annual
      production, including grade, tonnage and amount of commodity
      produced.

Natural
Soda Inc. acquired the White River Nahcolite Minerals leases, plant and other
assets in February 2003. The following table summarizes tonnages of product
produced and sold and financial statements for NSI since we acquired the assets.
Production encompasses various grades of sodium bicarbonate including grades of
USP product, industrial products and animal feed quality.

      Items
      3 & 4: Natural Soda Summary of Production and Income
      Statements

      Period:

      Feb
      - June

      2003

      FY

      2004

      Nine
      Mths

      2005

      Tonnage
      sold

      27,864

      84,103

      60,574

      Tonnage
      produced

      28,350

      84,349

      60,864

      Gross
      revenues

      $
      4,676,012

      $
      12,726,749

      $
      10,427,258

      Distribution
      costs

      1,452,926

      5,458,354

      4,547,885

      Net
      revenue

      3,223,086

      7,268,395

      5,879,373

      Operating
      costs

      2,685,916

      6,997,421

      5,599,328

      EBITDA

      537,170

      270,974

      280,045

      Depreciation
      & amortization

      617,671

      1,186,184

      430,630

      Gross
      Profit/Loss)

      $
      (80,501)

      $
      (915,210)

      $
      (150,585)

Closing
Comments

We
acknowledge:

      ·

      this
      company is responsible for the adequacy and accuracy of the disclosures in
      the corporate filings,

      ·

      we
      understand that SEC staff comments or changes to disclosure in response to
      staff comments do not foreclose the Commission from taking any action with
      respect to the filings, and

      ·

      the
      company may not assert staff comments as a defense in any proceeding
      initiated by the Commission or any person under the federal securities
      laws of the United States.

Yours
faithfully

/s/
Bill H Gunn

Bill H
Gunn

President

Exhibit
1 - Map of NSI leased are within State of Colorado

Exhibit
2 - Eocene Basins

Exhibit
3 - Saline Minerals in Green River Formation

Note -
the WRN leases shown are now owned by NSI.

Exhibit
4 - Detail map of NSI leases

Exhibit
5 - Geologic cross-section

Exhibit
6 - General Stratigraphy (1)

Exhibit
7 - General Stratigraphy (2)

Exhibit
8 - Saline Zone

Exhibit
9 - Stratigraphy of Uinta & Upper Green River
Formations

Exhibit
10 - Mine map showing cavities

Exhibit
11 - Permit status report, page 1

Exhibit
11 - Permit status report, page 2