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Jack Lifton
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Jack Lifton is an Independent consultant and commentator, focusing on the market fundamentals and future end use trends of the rare metals. He specializes in the sourcing of nonferrous strategic metals and on due diligence studies of businesses in that space. His work includes exploration,... More
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Technology Metals Research
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  • The Tellurium Supply Conjecture and the Future of First Solar 23 comments
    Jul 9, 2009 12:56 AM | about stocks: FSLR, RIO

    The Tellurium Supply Conjecture

    The market fundamentals of the technology “metal,’ tellurium, are an enigma. There is no general agreement whatsoever on the size of the global supply, the rate of production, or the location(s) of that production. Yet the small but consistent  for some time uses of tellurium in steel and copper alloying as well as in military applications has now been joined by a new demand that threatens to be voracious, the use of tellurium as a critical material for manufacturing high efficiency cadmium telluride thin-film photovoltaic cells and modules. This situation is ideal for the promotion of both a technology and a commodity bubble based on pure conjecture about the supply of tellurium. Fortunately for us and unfortunately for the bubble-ists we can I believe accurately project the maximum possible total production of tellurium in any given time period even though we do not know the actual production level (supply)>

    Merriam-Webster’s Collegiate Dictionary (10th edition) defines a conjecture as “a conclusion deduced by surmise or guesswork.” It is amazing to me how many high technology business models are based on nothing more than conjectures about the security of supply of critical metals. I think that individual as well as institutional investors and all of their financial advisors can learn an object lesson about this class of short sighted planning from the story of the very expensive development and implementation of some new end-uses for the very rare element tellurium, which end-uses should have been easily foreseen to be resource limited dead-ends.

    The analysis of a business model or of a specific business plan involves both subjective and objective determinations of the probability of the success of the model or plan. The evaluation of management skills, for example,  is mostly subjective, unless the management team in question has previously brought an identical business model  or plan into successful operation; this is very unlikely in high technology, since it is usually a new technology, always called an “advanced” technology  that is being proposed. For such technology based companies marketing plans are even more subjective, since they must base future demand for their products  on meeting manufacturing and pricing objectives in the future that are and must be based on present predictions of what manufacturing costs and selling prices might be in a future world even when such numbers now change daily with unpredictable trend directions! The most tenuous and subjective conjecture of all in a technology based business plan is the guess as to how much people will pay for a particular technology at a future time when other competitive, even more “advanced,” technologies may well have been developed.

    So we must ask whether there are any objective considerations, based on hard (verified or verifiable) numbers,  that can be factored into determining the risk of an investment in a technology that will only be brought into mass production in the future? The answer is yes. The probability of success in securing a supply chain for any critical metals involved in the manufacturing of the technology can be determined quite accurately today. Keep in mind that a critical metal is defined as one without which the technology cannot be manufactured.

    Although I will now demonstrate how to evaluate the probability of success of any existing or planned venture for which the rare metal tellurium is critical I want to first make a general statement about the single most common error made by individuals who, in their analysis of a business model or plan, must take into account the security of the supply of any critical metal for any venture.

    It is commonly and incorrectly stated by people who do not understand geology, geochemistry, mining or supply chain economics that the percentage of a metal in the earth’s crust, or, even in the universe at large, is related to the ultimate availability of that metal to the human race as a natural resource. This is not only wrong it is ignorant. I call this rather common reason to dismiss the security of supply problem the “earth fundamental argument” after a phrase I saw used just last year in an article in the prestigious peer-reviewed journal Science to assure the reader that the amount, as it happens, of the rare meatl gallium in the earth’s crust was so large as to make practical the idea of using gallium aluminum compounds to decompose water releasing its hydrogen for use as fuel. This idea was based on a “discovery” by a professor at Purdue University who actually got the university to finance the filing of a patent proposing this use of gallium aluminum, and who announced to the world that he would seek financing to start a company to manufacture gallium aluminum alloy, dispense it at fueling stations, and recapyure the spent alloy and recycle it for re-use. I wrote an article at the time pointing out that the annual global production of gallium was less than 200 tons all of which was in use for the electronics and weapons industries, and that the only source of gallium that even allowed the 200 ton p.a. production figure to be achieved and maintained was the production of the base metal aluminum from which gallium is recovered as a tiny byproduct. The global annual production of aluminum in 2008 was 39,000,000 metric tons, which allowed for the recovery of less than 200 metric tons of gallium. There are no primary mines for gallium.

    I hope this brief example and discussion will allow you to understand that the amount of any metal available to the human race is due to its concentration over geologic time into deposits, called ore bodies, of sufficient size, near to or on the land surface of the earth, where power, water, and transportation are available and from which the metal ores can be extracted, separated from the rock, refined, and purified by equipment and technologies that are known to work and economical.  No two ore bodies are alike and so very little speculative research goes on in mining engineering. All such research is “to order” and is very expensive and time consuming due to the limited number of skilled researchers and research locations for such endeavors.

    I’m actually now working on what I hope will be  a comprehensive book , which I also hope will be useful to investors, that will cover the theme of security of supply and illuminate, for the purpose of eliminating them, such misleading conjectures as the earth fundamental argument . The book’s working title is “The Age of The Technology Metals.”   I have recently been named as a Senior fellow of the Institute for the Analysis of Global Security (iags.org) , and I hope (again) that the IAGS will sponsor my book so it can be published.

    Now let’s take a look at the “tellurium supply conjecture.”

    Almost all (90%+) of the tellurium available to the human race exists as a byproduct of copper. The remainder is mostly a byproduct of lead and some small amounts exist as ore forms in some deposits of gold, silver, and bismuth. In the case of ‘telluride’ ores of gold, silver, and bismuth the proportion of tellurium can be very large but the substantive amount of tellurium in any of these small deposits is usually uneconomical without the recovery of the gold, silver, or bismuth and even with such recovery intended the deposits may be too small to be economical for any combination of recovered metals.

    I am frequently told of a primary tellurium deposit in China, but upon investigation that deposit turned out to be a bismuth telluride ore body too small to be economical in the face of the costs of development.

    The total amount of tellurium that could be recovered from all of the sources above is estimated to be as much as 3200 metric tons a year by the most optimistic reporters, but the actual amount recovered from all sources is surely no more than 25-50 % of that total, and it may well be that the total annual maximum possible production is no more than 1600 metric tons per year as was estimated by the US national renewable Energy Laboratory (NREL) in a comprehensive 1997 study.

    In 2002 in a book entitled The Life Cycle of Copper, its Co-Products and By-Products, published by Kluwer for the World Business Council for Sustainable Development, by Ayres, Ayres, and Rade the following paragraph appears:

     

    4.8.12. Tellurium [Andersson 2000]: Tellurium is the scarcest of all the by-product metals,

    except for gold . Crustal abundance is 0.005 ppm. It is mainly recovered from copper ores

    (1.5-3 ppm), where it is considerably enriched. There are two known deposits where tellurium

    is found at much higher concentrations, one in Mexico (0.2%) and one in China. Tellurium

    has a significant potential use in thin-film cadmium telluride (CdTe) photovoltaic cells.

     

    Note that the first sentence means “…of all the by-product metals [found in copper], except for gold.” Also the next sentences should read for clarity “Crustal abundance is .005 ppm. It is mainly recovered from copper ores [where it is found as a by-product in the range] (1.5-3 ppm), where it is considerably enriched [compared to its crustal abundance].”

     

    If you calculate the maximum amount of tellurium that could be recovered from the 2008 global production of copper using the percentage composition of tellurium in copper as stated above you only get 16,000,000 metric tons of copper  X 3 ppm of tellurium per ton  = 48 metric tons. This figure although low is still higher than  the total production of tellurium produced (outside of the USA) as  “discovered” and verified by the United States Geological Survey (USGS) for 2008, which was 38 metric tons from Peru (30 mt) and Canada (8 mt). The USGS admits that its data do not include US production, for reasons of not disclosing information which could give foreign companies a competitive advantage, and it further states that “Australia, Belgium, China, Germany, Kazakhstan, the Philippines, and Russia produce refined tellurium, but output is not reported, and available information is inadequate for formulation of reliable production estimates.” Note well that including Belgium and Germany in the aforementioned list is ( unintentionally)  misleading, because tellurium production in those countries is based solely on recycling.

     

    I want to add myself at this point that I was told last November (2008) by a colleague gathering statistics on global metals production that she had directly asked Codelco, the Chilean state owned and world’s largest copper producer, how much tellurium it produced in 2007 and was told “less than 2 tons.” Note that the USGS Commodity Mineral Survey for Selenium and tellurium for 2007, published in October, 2008, does not even include Chile as a source either of selenium or tellurium.( http://minerals.usgs.gov/minerals/pubs/commodity/selenium/myb1-2007-selen.pdf)

     

    The USGS Commodity Mineral Survey for selenium and tellurium  for 2007 further enlarges the possible production of tellurium globally beyond the total stated in the Ayre’s [2002] book noted above. The USGS report says that:

     

    “Total world production of … tellurium has been estimated between … 450 [and] … 500 t/yr…. Based on global copper refinery data (Moats and others, 2007, p. 202-241) the USGS estimates that copper anode slimes could generate … 1,200 t/yr of … tellurium,….”.

     

    At this point I want to explain why all of the resource reporters addressing the tellurium supply issue use so many “shoulds” and “coulds’ to modify their production total statements.

     

    Tellurium is only efficiently  recovered from copper that is refined by the electro-winning process. In this traditional process “crude” or “blister” copper from a smelter is used as the anode in a bath of sulfuric acid. The copper is plated onto a thin pure copper or stainless steel cathode. In this operation the “impurities” that may be present in the crude copper anodes  such as the gold, silver, platinum, arsenic, molybdenum, selenium, and tellurium can be made either to dissolve in the acid or “fall out” as “anode slime” or “anode mud” which is then collected and processed for these trace metals that have been concentrated by this process. To show you the scale achievable I can tell you that when I was working with the Amax secondary copper smelter in Carteret, New Jersey in the 1980s the yearly flow through of copper scrap and new “blister” copper from Amax’ mines reached 250,000 metric tons a year. The smelter produced from anode slimes 100,000 troy oz of gold, 10,000 tr oz of platinum, and 1,000 tr oz of rhodium a month! To the best of my knowledge no selenium or tellurium was recovered commercially. It was there it just wasn’t deemed to be of sufficient economic value to repay the costs of facilitizing to separate and purify it.

     

    Today the highest  grade ores from which copper is produced are being exhausted  and new processes for extracting copper from lower grade ores are now used more and more in places like Bingham Canyon, Utah, where Kenencott Copper, a unit of Anglo-Australian Rio Tinto, operates America’s largest copper mine. A Kenencott operations manager told me that solvent leach operations at Bingham Canyon actually recover more molybdenum from the lower grade ores than electro-winning ever did from the higher grade ores. As for tellurium the solvent leach technology does not lend itself to the recovery of selenium or tellurium so that unless the prices for selenium and tellurium were to rise dramatically they would essentially not be recovered and are today thus produced in much less quantity than when the mine, and any other mine of the same type, solely utilized electro-winning of higher grade ores.

     

    As I previously mentioned global tellurium production was estimated in 1997 by the U.S.  National Renewable Energy Laboratory (NREL) to be a maximum of 800 metric tons out of a total possible recovery of 1600 metric tons. Unfortunately the NREL credibility has been compromised by a more recent NREL publication, http://www.nrel.gov/pv/thin_film/docs/035098_pvfaq_materials.pdf,  “Will we have enough materials for energy-significant PV Production,.”  Which contains the following paragraph the statements and conclusions of which are wrong because they are vastly oversimplified:

     

    “In brief, our conclusion is this: Producing 20 GW/year of PV in the United States by 2050 would not create problems with materials availability. Issues surrounding the availability of PV materials at this level simply do not exist. Only indium and tellurium remotely approach becoming bottlenecks at

    this annual production rate, and simple strategies exist that would solve these problems, including extracting them from ores that are currently mined but unused”

     

    Many many papers have been written in the last few years assuming that all of the tellurium that could be recovered will be recovered and that copper production will simply continue to increase thus increasing the production of tellurium.

     

    Both assumptions are questionable. The recovery of copper only from high grade ores is ending  and recovery from lower grade ores is more expensive. Also it must be noted that 2008 was the highest production year in history for all metals.  From the beginning of the age of the electrification of the west (and of the use of brass cased ammunition for repeating firearms) until now has been a period of more than 100 years; the key metal in that electrification, and the manufacturing of brass cased ammunition, has been copper, and in one hundred years humanity has reached the production level of 16,000,000 metric tons per year.

     

    Let’s assume that the doubling of copper production is possible. It will have to be, ultimately,  from lower grade ores, which are abundant, and that plus the ever rising cost of energy will sharply reduce that part of the total that is produced by electro-winning, so it will most likely also sharply reduce the production of tellurium. For argument’s sake let’s assume that the global production of copper can and will double within 25 years-note that from 2007 to 2008 the total global production of copper rose just 2%. Illustrating that when production levels get to this volume increases will ordinarily only be marginal.

     

    Let’s also assume that the USGS estimate of global tellurium production in 2007, 500 metric tons, in fcat represented only 50% of total possible production, and that tellurium production will keep pace with copper production increase and that all of it will be recovered from the copper in 2034. This means that a total production of 2000 metric tons of tellurium is possible in 2034.

     

    Let’s further assume that all of the tellurium mined in 2034 goes to First Solar to make cadmium telluride thin-film photovoltaic cells.

     

    An article in Wikipedia about cadmium telluride PV cells, http://en.wikipedia.org/wiki/Cadmium_telluride_photovoltaics,  states that “One gigawatt (GW) of CdTe PV modules would require about 66 tonnes [of tellurium] (at current efficiencies and thicknesses).  The installed capacity for electricity generation in the US is today, 2009, about 1100 gigawatts.

     

    According to the Energy Information Administration publication “Electric Power Annual” for 2007 total installed photovoltaic generating capacity in the USA on 2007 was 503 megawatts at 38 installations for solar energy conversion-not all of which were based on photovoltaics. This means that in 2007 the US capacity for electrical energy generation that could be produced by solar energy conversion was a maximum of .05%.

     

    The USGS report on tellurium in its discussion of end-uses states that:

     

    “First Solar Inc. (Phoenix, AZ) was the leader in CdTe production, with plants in Ohio and Germany

    and another plant opening in Malaysia in 2008. In 2007, with an annual capacity of 210 MW, First Solar accounted for 90% of global CdTe cell capacity. By 2010, it was projected that global CdTe cell production capacity will reach 608 MW (Ullal and von Roedern,)”

     

    A recent article entitled “Sustainable Energy, “ http://scitizen.com/screens/blogPage/viewBlog/sw_viewBlog.php?idTheme=14&idContribution=2823,   makes the following point:

     

    “For example, if solar energy is to expand from its present contribution of less than 1% of renewable power generated here last year to, say, 10% of our total power supply, the use of an ingredient in proportions as small as a hundred grams per kilowatt of capacity would translate into a cumulative requirement for tens of thousands of tons. If the substance in question was the Tellurium used in Cadmium-telluride solar cells, its global output would have to expand by at least 10X within a decade or two. That might not be possible, or at least economically feasible.”

     

    In fact based on 2007 statistics, if the increase were to come from the most scientifically efficient technology, First Solar’s cadmium telluride  thin film photovoltaic  the amount of tellurium required would be approximately 220 times the amount for which First Solar had the need and capacity in 2007.

     

    Assuming that the Wikipedia figure of 66 tons of tellurium per gigawatt required by First Solar’s technology is accurate this means that First Solar needed 13 tons of tellurium in 2007. But for its solar energy conversion technology to get to a total of  10% of our American 2008 installed capacity would then require 7,260 tons of tellurium! First Solar is predicted to get to a manufacturing capacity of 608 MW in 2010; this means it will need 39 tons of tellurium in 2010.

     

    My conclusion from these facts is that First Solar is most likely struggling to obtain tellurium even now, because its demand just for next year could be as much as 1/3 of the annual global production of tellurium if we believe the most conservative of figures above, but, in any case, will be no less than 8% of the USGS guestimate of total annual global production of tellurium based on the continued production of 16,000,000 metric tons per annum of copper. It cannot be overemphasized that First Solar’s demand for tellurium is a demand for new material. It’s technology has created a new demand and does not replace an older demand for tellurium, so we are speaking of additional recovery of tellurium to satisfy First Solar’s requirements.

     

    It may be possible to increase the percentage recovery of tellurium from copper, but it is more likely that the annual global production of tellurium will decrease as copper production technology, even if the total copper produced is growing slightly, moves to solvent leach extraction processes to beneficiate lower grade ores.

     

    First Solar’s problem is not simply one of getting tellurium but in getting the amount it needs annually. First Solar’s end use product has a long life and can probably be recycled, so that in theory given enough time First Solar could obtain 7,250 tons of tellurium and with it manufacture cumulatively enough solar cells to generate 110 gigawatts of electricity, 10% of our current installed capacity from all types of generating devices and fuels.

     

    No one knows even within 50% how much tellurium is produced annually today, but I am going to conjecture that it is between 500 and  1,000 tons. It is possible that this range could be increased by increasing the amount of copper processed by electro-winning for tellurium but it is unlikely that such an agenda would be able to be carried out. Just to demonstrate the economics it is only necessary to consider that in 2008 copper reached a price of almost $9,000.00 a metric ton so that the copper market for 2008 had a high value of $144,000,000,000.00.  One thousand metric tons of tellurium at its high point in 2008 was worth $200,000,000.00. The copper mining industry cannot logically continue to use electro-winning and thus decrease production and raise the costs of producing copper simply to add even double the $200,000,000.00 that doubling the tellurium output would bring in the face of the reality that such an undertaking could cost billions of dollars of copper production. There is no economic driver for increasing the production of tellurium!

     

    I will give more detail on this topic in future articles and my forthcoming book, but suffice to say that in order for First Solar to increase its production two gigawatts per year, which is three times its projected manufacturing capacity for 2010, which in turn will be three times its 2007 capacity, will require a supply of 120 metric tons a year of tellurium, and that at that enormous production rate it would take 60 years to acieve the changeover of 10% of the installed electric generating capacity of the USA in 2008 to the cadmium telluride thin flim photovoltaic cells today produced by First Solar.

     

    Solar cells today are not economical; they cost more per watt of output that fossil fuel production of electricity. Solar cells today are only manufactured and sold through taxpayer subsidies. The Cap and Trade promoters have overlooked the increase in costs their regime will bring to the metal  mining and refining industry. Whatever economies of scale have been “conjectured” by First Solar will now be obsolete and the time when their product could be competitive with fossil fuel production will move farther into the future.

     

    The biggest risks of all is that non-solar industries will raise their demand for tellurium and both domestic and foreign other solar cell makers will increase their demand for tellurium. The USA produces today about 10% of the world’s copper, which means that it produces at most 10% of the world’s tellurium. It is very likely that First Solar’s current production demand, in the USA,  alone requires that the US industry become reliant on foreign sources of tellurium already. In that case, since US production of copper can increase if at all only marginally,  if First Solar is to grow it will certainly have to do so by creating jobs in mining overseas or by moving its production overseas. Other sustainable energy companies chasing subsidies and “stimulus” funds will surely complain that subsidizing First Solar is simply subsidizing foreign resource producers.

     

    I am not qualified to analyze First Solar’s balance sheet to see to what level their current costs would have to deop in order to make their products competitive with other electric generating technologies of all types. However I am qualified to predict that the cost of tellurium will increase and its availability will decrease in the near future.

     

    A company like First Solar, which is critically dependent on a secure supply of tellurium to exist and on an unsustainable growth in the supply to it of tellurium in order for it to grow and achieve competitive pricing is a very big risk for short term investors. The maximum supply and production levels attainable of tellurium are quantifiable even if the actual production figures are murky, and they do not bode well for the future of First Solar if it must make profits to survive.

     

     

     

     

     

     

     

     

     

     

     

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Comments (23)
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  • ytterbius
    , contributor
    Comments (34) | Send Message
     
    Beautifully done. The argument is made with high credibility. I'll be interested in your book when it comes out.

     

    Here's my spiel on FSLR that I wrote some time ago. Your estimation of the Te supply is surely more accurate, so that should be taken into account.

     

    americansolareconomy.b...
    9 Jul 2009, 01:54 AM Reply Like
  • Futurist
    , contributor
    Comments (2127) | Send Message
     
    Jack,
    Thanks for the informative article. As always your information on rare earth metals puts a very different spin on solving some of our most pressing issues.
    I also want to say that the depth of your analysis is very helpful. Not always the case on SA.
    9 Jul 2009, 12:08 PM Reply Like
  • Mark Anthony
    , contributor
    Comments (3601) | Send Message
     
    Hi Jack:

     

    I have you to thank for as you are the one who reminded me of the opportunity of investment in tellurium. I read your article on tellurium and did a lot more research and actually bought quote some physical tellurium ingots. I hope I am not the world's first physical tellurium investor.

     

    Read my early articles on tellurium and First Solar:
    seekingalpha.com/autho...

     

    I am royally tracking every article you write on minor metals. What do you think about cobalt as an investment? My most favorite metal remains palladium, due to the fiasco going on in Russia, and the potential in cold fusion, the world's future energy source.
    10 Jul 2009, 02:53 AM Reply Like
  • Mark Anthony
    , contributor
    Comments (3601) | Send Message
     
    Jack:

     

    You repeatedly quoted a number from the wikipedia page you cited, that 1 GW of CdTe solar panel will require 66 tons of tellurium.

     

    That number is incorrect. The key discrepancy happens at how big the solar panel needs to be to produce 1 GW. First Solar's products are 2 feet x 4 feet panels (about 3/4 square meters), average output is 69 watts. So that's 92 watts per square meter. 1 GW will require 10.87 square kilometers of panels. So 1GW will require 98 tons of tellurium, at 3 microns thickness of CdTe layer.

     

    I studied the original NREL report on tellurium supply. It was out sourced and done by Jim Guilinger within a very brief period of time. He just categorily assumed that all the copper mines in the world contains a concentration of tellurium of about 0.4 pounds tellurium per ton of copper. That's a very wrong assumption.

     

    Thank you for providing that information on Chile's tellurium production. They produce a whole 1/3 of the world's copper, but produces virtually no tellurium (2 tons as you find out from a direct source). There was a paper by Dr. Martin Greens in Australia who criticized the Jim Guilinger research. If you want a copy of that paper, email me at
    palladium_001 (at) yahoo.com
    10 Jul 2009, 03:32 AM Reply Like
  • Mark Anthony
    , contributor
    Comments (3601) | Send Message
     
    Based on my estimate and FSLR's ability to push the limit of technology, it is possible that they could push the price of tellurium to the level of near gold price. Any higher, and the viability of First Solar as a business, will become a going concern. The danger that FSLR faces, is that investors could rush in to hoard physical tellurium for profit. I don't see how they can prevent it from happening. We are talking about buying something at $100 per kilogram and expect a return of $30,000 per kilogram. The profitability is just irresistable to any one who acquired knowledge in this metal.

     

    seekingalpha.com/artic...
    10 Jul 2009, 03:29 PM Reply Like
  • yellowhoard
    , contributor
    Comments (1507) | Send Message
     
    I guess that makes me the second individual investor in Tellurium.

     

    I bought some a couple of months ago.

     

    Some ruthless bastard is going to short FSLR and corner the Tellurium supply.
    10 Jul 2009, 04:54 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5060) | Send Message
     
    Dear Mr. Lifton: Thank you for a wonderful article. If there is ever a "best of SA category" I'd nominate your contributions.
    I only wish the Senate would call you up to testify on rare earth metals and mining, and how it will be impacted by Cap and Trade. Too bad they have been so busy polling auto executives on whether they flew corporate or commercial jets to attend hearings on the hill. Their time would have been better spent learning facts that matter.
    10 Jul 2009, 05:46 PM Reply Like
  • ECD Fan
    , contributor
    Comments (339) | Send Message
     
    Dear Mr. Lifton: Your article is factually incorrect. In the March 2009 quarter, First Solar produced 220MWs (and shipped just 196MWs) worth of solar product, thus, their annual capacity is already over 880MWs (45% more than your concocted "608MW in 2010").

     

    See:
    ecdfan.blogspot.com/20...

     

    First Solar uses very little Te per Watt. Using your "68 tons per 1GW," even at the inflated price of $200 per kg, results in just 1c per Watt. First Solar's manufacturing costs in the March 2009 quarter were 93c per Watt, thus they can grow with their CdTe technology quite a bit and still bankrupt every other high-cost PV producer in the process!

     

    So why do you continue to spread misinformation about things you don't understand?
    11 Jul 2009, 07:06 PM Reply Like
  • Jack Lifton
    , contributor
    Comments (413) | Send Message
     
    Author’s reply » ECD fan,

     

    What on earth are you talking about? The manufacturing capacity of FSLR has NOTHING to do with the thesis of my article.

     

    My useage figure per gigawatt comes from the USGS report on tellurium. I never calcualted their cost or selling price per watt, because it is irrelevant to the issue of security of supply. THE PRICE OF TELLURIUM DOESN'T MATTER AT ALL. IT IS THE SUPPLY THAT DETERMINES HOW MANY GIGAWATTS OF CdTe THIN-FILM PV CELLS YOU CAN MANUFACTURE!

     

    The price determines only whether or not you can sell your product agaianst the competition if the market is unsubsidized.

     

    Yellowhoard-

     

    I don't know the marital status of the parents of the owners of 5N+, FSLR's supplier of high purity tellurium, but they may well be holding today an inventory of commercial tellurium valued at as much as $27 million dollars. This has been estimated to be more than 100 tons! I suspaect that their hoard is the largest concentration of tellurium in a small space in the history of the world. If ECD fan is correct about FSLR's capacity then their supplier is holding more than a year's raw material inventory. This is an unusually high inventory for something that is supposedly no problem to obtain, isn't it.
    11 Jul 2009, 08:34 PM Reply Like
  • yellowhoard
    , contributor
    Comments (1507) | Send Message
     
    Very intersting Sir.

     

    I look forward to hearing any future updates.

     

    By the way, I don't usually invest in anything without first determing an exit strategy. I went ahead and bought Tellurium without a plan to sell.

     

    Do you have any advice as to when and where to pull the trigger on the eventual sale of this metal?
    11 Jul 2009, 11:24 PM Reply Like
  • Mark Anthony
    , contributor
    Comments (3601) | Send Message
     
    Yellowhoard:

     

    Like you, I bought physical tellurium without an exit strategy. The potential profit is so high, that your really do not need to consider exit strategy yet. When it is time to sell you hope some one will come to your door beg you to sell at whatever price you ask. That's how I see. Have you noticed recent progress on Phase Change Memory, which uses tellurium?

     

    uk.news.yahoo.com/16/2...

     

    This is going to be HUGE. I am waiting for the day that I can instantly turn my computer on and off like a light bulb!!!

     

    It is a shame, completely shame, that something as useful and scarce as tellurium would be used on trivial tasks of generating a few watts of electricity. There are many many ways to generate electricity, but not many ways of making a good computer memory chip.
    seekingalpha.com/autho...
    12 Jul 2009, 01:16 AM Reply Like
  • akgeo
    , contributor
    Comment (1) | Send Message
     
    How do you buy physical tellurium?
    AK
    14 Jun 2011, 02:41 PM Reply Like
  • ECD Fan
    , contributor
    Comments (339) | Send Message
     
    To Mr. Lifton: Your article states "First Solar is predicted to get to a manufacturing capacity of 608 MW in 2010; this means it will need 39 tons of tellurium in 2010." As I said, First Solar already reported 880MW effective annualized capacity in the March 2009. How have tellurium prices reacted to that "unexpected" demand surge? Care to tell us? Or isn't it the case that the "predictions" and sources you are using are as uninformed as the conclusions you are reaching?

     

    Now, if there were any impending shortages of tellurium, why are tellurium prices where they are as we speak? Using your own assumptions for tons per 1GW and assuming an inflated $200 per kg price, tellurium is still just 1c per Watt. Don't you understand the implication? The implication is that even if some unimaginable demand or supply shock drives tellurium prices up 20x, that will still increase First Solar's manufacturing costs by only 26c per Watt or so, so the March 2009 manufacturing cost per Watt would have increased from 93c to $1.19 per Watt, the projected 2012 costs would increase from 65c-70c per Watt to 91c-96c per Watt, and projected 2014 costs would increase from 56-63c per watt to 82c-90c per Watt (read the recent Analyst Day presentation slides). For comparison, United Solar's a-Si manufacturing costs are about $2.00 per watt ($2.30 or so, if we adjust for the 6.3% efficiency vs First Solar's 10.4%+ efficiency, which causes higher balance-of-system costs). And all the rest of the thin-film players are having hard time getting below $1.50 per Watt (or adjusted to $1.60-$1.80 for their lower conversion efficiencies of 6%-9%). Do you now understand how low cost First Solar's manufacturing process is? Do you now understand why your "tellurium supply conjecture" is misguided and irrelevant, at least as far as First Solar's production capacity and cost of manufacturing are concerned?

     

    As a commodity "expert," you should have learned by now that reserves and production respond to pricing. Thus, "peak tellurium" and "peak oil" are obvious fallacies.
    12 Jul 2009, 02:38 AM Reply Like
  • Jack Lifton
    , contributor
    Comments (413) | Send Message
     
    Author’s reply » It's amazing to me how the limitations of the amount of natural resources available to us, the human race, are always confused by "experts" with the amount of a chemical element that is distributed throughout the earth's crust, dissolved in the oceans, dissolved in the earth's molten core or the magma above it but below the surface, or distributed in the universe as a whole.

     

    The only metrics of a natural resource that are important are determined by the necessity of the concentration and location of the ore body being such that the technology available today and the necessary costs of bringing that technology to bear CAN produce the a product at a price that will meet or create a demand.

     

    Those necessary costs include all of the direct costs associated with:

     

    Exploring for, discovering, and proving the quality and size of the ore body,
    Developing a specific chemical engineering regime to prodice the desired end product at the mine economically before starting the operation,
    building the access roads,
    building and maintaining and operating the necessary machinery,
    aquiring the existing chemical reagents,
    having electric power or other smelter fuel available,
    finding and training the necessary personnel,
    keeping environmental impact to a minimum, and
    having a ready market for the end products 5 to 10 years after beginning the process of developing the mine.

     

    Tellurium is very rare.

     

    If tellurium only were desired, and not copper, there were be no way to economically produce tellurium; it would be simply a very rare novelty. Because in that case the cost of tellurium would include the cost of all of the copper in which it was contained. So far that has not happened.

     

    There is a free market fantasy that if the price of a commodity goes up in response to an increase in demand then the supply will increase. This is taught at Wharton and put into practice on Wall Street. But the professors and investment bankers have ignored the fact that their "law' only works in a world of infinite resources where costs go down as production increases. This is not the world of natural resources today. Those investors who look for windows of opportunity between the time a demand goes up and the supply commences to bring the prices down are in for a shock in the 21st century.

     

    The earth is a spaceship it has only so much fuel and other supplies ACCESSIBLE TO US WITH OUR CURRENT COSTS AND TECHNOLOGIES.

     

    We must all become aware that 90% of the human race has NOT YET BEGUN to use the earth's resources at any level remotely like the useage level in North America and Europe.

     

    A new paradigm for the USE of rare resources must be implemented.

     

    We need to stop using and making throw-away products in which rare materials are disseminated, i.e., used in such a way that they cannot be economically recovered.

     

    The ONE and ONLY METRIC of importance now is the RATE OF PRODUCTION OF A NATURAL RESOURCE. This rate goes up and down with demand, but the open question is: IS THERE A PEAK OF PRODUCTON FOR A GIVEN NATURAL RESOURCE?

     

    I believe that there are such peaks, and that all of them will be reached before the demands of the 90% are or can be satisfied.

     

    The reader who talked about the allocation of tellurium to phase change memory rather than solar cell production has illuminated the next "phase' of the problem.

     

    The US military believes that resource demand and forced allocation due to national intetests could bring about a series of "resource wars" in this century. The resources that the military is following include ENERGY and WATER as well as METALS and Minerals.

     

    As an example, if you think tellurium is important don't you think that the Chinese, Indians, Chileans, and Russians do also. Have you factored into your risk of supply interruption the demand from those places, or have you just not bothetred to think about it at all?

     

    The Chinese are, and have been for several years, in the process of ending their export of metals the production of which is domestic (in China) or is controlled by China. Such metals are deemed too important to China's domestic economy to be sold into a foreign market simply for money.

     

    Price is no longer the only driver in a resource production limited world.

     

    12 Jul 2009, 09:03 AM Reply Like
  • yellowhoard
    , contributor
    Comments (1507) | Send Message
     
    Phase change memory will be huge.

     

    Everyone on the planet who currently uses a computer, and millions who have never seen a computer, will switch to or begin using this technology over the next decade.

     

    It's generations faster and requires less energy than todays computers.
    12 Jul 2009, 09:49 AM Reply Like
  • Vienna
    , contributor
    Comments (173) | Send Message
     
    I do not know about rare earth, but what you write make sense, and all statement are accompanied with an explanation about the possibility and credibility of the data and then interpreted, as far this is possible to find out through sources available, which we all know vary highly.

     

    ECD FAn if probably a shill, otherwise he would not be using the I know better bullshit articulation.

     

    On Jul 12 09:03 AM Jack Lifton wrote:

     

    > It's amazing to me how the limitations of the amount of natural resources
    12 Jul 2009, 01:42 PM Reply Like
  • ECD Fan
    , contributor
    Comments (339) | Send Message
     
    To Mr. Lifton: A small lesson in economics: In a world of infinite resources, prices will be close to zero. In a world of limited resources, higher prices will lead to higher capex and R&D, creating new technologies and extraction methods that will lower costs and increase both probable and proven reserves. We did not run out of oil last year. And neither did we 30 years ago. And won't in the next 30 years. Same with tellurium.

     

    To yellowboard: Phase-change memory is a techno-Ponzi. It was "invented" 40 years ago by the Charlatan Extraordinaire. Nobody has been able to commercialize it after all these years and millions wasted. NASA looked at the BAE's 4Mbit monstrosity (supposedly commercial since 2006), and found that the thing can't even remember the bits right. And Numonyx has no commercial product, despite their claims (if they did, where is the public datasheet?). A certain team within Samsung is still feeding the press false stories about their "perfect RAM." You can learn more about the techno-Ponzi here:

     

    ecdfan.blogspot.com/20...

     

    To Vienna: If you don't know, why are commenting? I suggest you learn first.
    12 Jul 2009, 03:04 PM Reply Like
  • Jack Lifton
    , contributor
    Comments (413) | Send Message
     
    Author’s reply » My last comment of the day. I was part of the team that made the first phase change memory "device" in the period 1962-66, which was invented by my first employer as a degreed scientist, Stanford R. Ovshinsky, who is many things but not at all a charlatan.

     

    It has taken about 45 years of parallel development in solid state electronics to make the phase change memory practical. As a monument to Stan I can tell you that I made the first working thin-film phase change memory device by layering films of germanium, arsenic, and tellurium and then alloying them in place. Today Samsung uses Germanium, Antimony, and Tellurium. It strikes me as incredible that we came up with almost the correct three elements on the first try. Stan was and is an intuitive genius.

     

    Remember, dear readers, that Stan also led the teams that made the amorphous silicon thin film photovoltaiccell and the nickel metal hydride battery.

     

    12 Jul 2009, 03:49 PM Reply Like
  • Vienna
    , contributor
    Comments (173) | Send Message
     
    The only thing I would like to post, is that man people read articles and some sound credible, and others sound like wiseacres.
    I have read too many articles of people convincing others of investment of toxic assests with a typical voice that sounds like yours.

     

    So I do not believe in what you comment here either. If you like to comment, and consider you have the knowledge then post it in a communicative way, otherwise you are not credible in what you arite either, even if you might be a great pundit.

     

    On Jul 12 03:04 PM ECD Fan wrote:

     

    > To Mr. Lifton: A small lesson in economics: In a world of infinite
    > resources, prices will be close to zero. In a world of limited resources,
    > higher prices will lead to higher capex and R&D, creating new
    > technologies and extraction methods that will lower costs and increase
    > both probable and proven reserves. We did not run out of oil last
    > year. And neither did we 30 years ago. And won't in the next 30 years.
    > Same with tellurium.
    >
    > To yellowboard: Phase-change memory is a techno-Ponzi. It was "invented"
    > 40 years ago by the Charlatan Extraordinaire. Nobody has been able
    > to commercialize it after all these years and millions wasted. NASA
    > looked at the BAE's 4Mbit monstrosity (supposedly commercial since
    > 2006), and found that the thing can't even remember the bits right.
    > And Numonyx has no commercial product, despite their claims (if they
    > did, where is the public datasheet?). A certain team within Samsung
    > is still feeding the press false stories about their "perfect RAM."
    > You can learn more about the techno-Ponzi here:
    >
    > ecdfan.blogspot.com/20...
    >
    >
    > To Vienna: If you don't know, why are commenting? I suggest you learn
    > first.
    12 Jul 2009, 06:43 PM Reply Like
  • ECD Fan
    , contributor
    Comments (339) | Send Message
     
    To Mr. Lifton: If you made the first working phase-change device, maybe you can tell us why every phase-change device "made" after yours is definitely NOT working. Also, based on your words, phase-change memory predates DRAM: it was not until 1970 that the newly formed Intel company publicly released the 1103, the first DRAM (Dynamic Random Access Memory), the memory now used in every PC and most other computing devices. Maybe you can tell us how that memory sidestepped the "solid state electronics developments" needed for phase-change memory.

     

    My modest tribute to the Charlatan Extraordinaire, focusing just on his PV solar swindle, can be found here:

     

    ecdfan.blogspot.com/20...

     

    To Vienna: Some people read and write articles, and become defensive when their "beliefs" are contradicted by the facts Other people seek the truth.
    12 Jul 2009, 08:32 PM Reply Like
  • Ted Faraone
    , contributor
    Comment (1) | Send Message
     
    The Packard Motor Car Company used antimony lead bushings between its leaf spring leaves through 1948 in order to suppress noise.
    13 Jul 2009, 09:27 PM Reply Like
  • filleleon
    , contributor
    Comment (1) | Send Message
     
    I am a geologist actually exploring for Te.
    Jack Litton's comment, or response is right on. The actual value of Te does involve many factors.
    12 Dec 2010, 02:14 PM Reply Like
  • WaterGateDiner
    , contributor
    Comments (5) | Send Message
     
    Dear Mr. Jack Lifton:
    For my father's work with water in Washington DC, for my brother’s work in Florida and Tennessee, and for the future of American awareness toward sustainability, thank you.
    Donald T. Coughlin
    14 May 2012, 07:43 PM Reply Like
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