The concentration of Iodine in kelp is so much higher than the surrounding water it is thought that the kelp makes the Iodine from the water and sunlight... I believe.
Either that, or it is extremely adept at concentrating the kelp some how. Interesting that 2 of the 4 herb in Essiac 4 herb formula are high in iodine, and 4 of the 8 herbs in the 8 herb Essiac also have iodine.