Wednesday, December 1, 2010

More on First Solar's New Tellurium Supplier (ASOE; FSLR; VNP.TO)

The agreement is in addition to the ongoing relationship with 5N Plus (VNP.tsx).
From 10Q Detective via bnet:

How First Solar’s Tellurium Deal Shows the Fragile Economics of Solar Panels
First Solar has signed a five-year purchase agreement with a China-based mining company for an undisclosed amount of refined tellurium (Te). The deal underscores the thin-film module maker’s need to secure visible, longer-term supplies of its core photovoltaic (PV) commodity — but also highlights how uncertainty over supplies of the rare metal could monkeywrench some solar-panel makers.
According to the contract, Apollo Solar Energy (ASOE) will provide an estimated $110 million of 5N (”five-nines,” or 99.999%) ultra-high purity tellurium — feedstock for cadmium telluride (CdTe), the semiconducting compound coating First Solar’s thin-film PV panels.

The global leader in sales of thin-film solar panels, First Solar (FSLR) had to delay panel shipments last quarter due to capacity constraints. Complicating production problems, the utility-scale PV market is anticipated to surge next year, growing five-times faster than the rest of the industry, according to a recent analysis from IMS Research. With a growing backlog — 2.2 GW in North America alone — this new demand supports management’s recent decision to nearly double production from 1.4 GW to more than 2.7 GW come 2012.

Given CdTe thin-film solar modules are less efficient at converting sunlight to electrical energy, First Solar has excelled at offering customers the cheapest manufacturing costs, a 20 to 30 percent discount to traditional crystalline silicon (c-Si) PV makers. In second-quarter 2010, the Arizona-based PV supplier posted a new low for module costs of $0.74 per watt. Robust demand and tight inventories of tellurium upstream, however, could challenge attempts to improve manufacturing efficiencies.
“First Solar’s problem is not simply one of getting tellurium, but in getting the amount it needs annually,” says Jack Lifton, co-founder of Technology Metals Research.
The market price for 5N-grade tellurium has increased almost fifteen-fold in the last decade, recently trading at about $275 per kilogram.

Tellurium is a relatively rare element, with more than 90 percent of global production recovered as a byproduct of copper mining and processing. Despite projections as high as 1,600 tons per annum, the actual global output of tellurium is essentially unknown, as producers rarely publish production numbers. Data published by the U.S. Geological Survey (USGS) puts annual global production at around 200 tons.
In e-mail correspondence, Lifton cautioned:
Tellurium has never been stockpiled — it has simply not been produced for the most part; it has stayed in the copper or been discarded from copper production in the tailings in which it is far too disseminated for recovery.
“Total world production of new copper in 2008 was at an all time high of 16 million metric tons,” said Lifton. “Theoretically that would have produced a maximum of around 50 metric tons of new tellurium, were it all recovered.”...MORE
UPDATED: "First Solar News, Rumors: CIGS, Mercury, Tellurium" (FSLR; ASOE; TSL; STP; JASO )
Is First Solar Going to Buy Critical CdTe Supplier 5N Plus? (VNP.TO; FSLR; GE; HON)

From the press release, via semiconductor Today:

Apollo signs 5-year deal to supply Te to solar panel maker
Apollo Solar Energy Inc of Chengdu, Sichuan Province, China says that it has signed a five-year purchase contract with a major global solar panel maker.

Apollo will provide 5N (five-nines) ultra-high-purity tellurium, which is the core material of cadmium telluride (CdTe) thin-film solar photovoltaics (PV), with projected sales of about RMB730m ($110m) over a five-year period.

“We have been cooperating closely for the past five years with this manufacturer, and we believe this purchase contract will be a win–win strategy for both of us in the long run,” says CEO Dr Jingong Pan.
Through its subsidiary Sichuan Apollo Solar Science and Technology Co Ltd, Apollo Solar Energy is a vertically integrated firm primarily engaged in mining, refining and producing high-purity tellurium (Te), Te-based compounds and other metals for the thin-film PV industry as well as for segments of the electronic materials market (including radiation detection and infrared detection). Products include ultra-high-purity metals and commercial-purity metals (such as selenium, antimony, bismuth, cadmium and zinc), cadmium telluride (CdTe) thin-film compounds, and copper indium gallium diselenide (CIGS) thin-film compounds.