Friday, March 28, 2008

First Solar: Materials for Solar Photovoltaic Cells II: Tellurium, Not So Rare After All (FSLR; VNP.TO)

From Resource Investor:

In reviewing the English language articles, which discuss the supply and demand of tellurium for manufacturing cadmium telluride photovoltaic solar cells, I noticed a persistent error in the interpretation of U.S. Geological Survey data on tellurium fundamentals and usages, which seems to now pervade all such discussions. I need to emphasize that those who utilize USGS data are reading too little into the numbers, rather than too much.

Based on the discussion following I now believe that there may be enough annual production of tellurium to build and maintain a solar electric power industry, which can become an economically important component of the infrastructure, total supply and accessibility of electric power generation on a stand-alone basis; I now believe that there is much more tellurium produced each year than I thought or than is commonly reported. The difference increases the credible output of tellurium by a factor of between two and four, but the global total annual production may still be less than 500 tonnes a year....

...My conclusion is that even if we just reduce the 2007 potential 50% production of tellurium contained in copper by half and estimate that only 25% of the potential supply is recovered we then must recognize that the world today is most likely producing at least 500 tonnes per annum of tellurium or four times the commonly stated figure in supply reports!

Before the cadmium telluride PV solar cell enthusiasts begin rejoicing, I must ask some more questions. Even if there is enough tellurium produced to meet the demands of a growing cadmium telluride thin film using segment of the solar electricity industry, isn’t there still a major bottleneck? Isn’t there a serious dearth of capacity to produce the electronic grade tellurium needed by the PV solar cell manufacturing industry, and doesn’t the building of new capacity to produce electronic grade tellurium depend on the availability of skills, equipment and the time it will take to get the purification capacity to match the production capacity hoped for? In addition isn’t it time now for everyone to take a breather and ask the very important question: Are the numbers I have estimated and calculated here today correct?

One set of questions for the investment community. If the demand for tellurium is not immediate, and if the supply, is much more than has been stated, so that the supply exceeds the current demand, then why has the price of tellurium gone up so fast and so far?

Sounds like a buy rec. on 5N Plus.