By Ucilia Wang
Globe Specialty Metals (NASDAQ:GSM) said it has re-opened its factory in Niagara Falls to produce a type of silicon that hasn't found a wide adoption in the solar industry.
The New York City company said it has re-started two furnaces that could produce about 30,000 tons of metallurgical grade silicon per year. The company would refine a portion of those silicon so that it's pure enough for solar cell manufacturing.
The move is part of a $60 million plan to boost manufacturing and creating jobs. New York state's economic development authority, Empire State Development, and the New York Power Authority are helping Globe Specialty by providing 40 megawatts of hydropower over five years and up to $25 million in tax and other benefits.
The deal between Globe Specialty and the state would allow the economic development authority to offer discounts for up to 25 percent of the company's production of upgraded metallurgical silicon as a way to attract solar cell and panel manufacturers to set up factories in the state.
As part of its $60 million initiative, Globe Specialty also plans to build a factory, also in Niagara Falls, that would produce 4,000 tons of upgraded metallurgical silicon per year, the company said.
Upgraded metallurgical silicon is not as pure as the silicon that the solar cells makers have been using. But its producers say the material can work just as well as the purer version, and it can be had at a far cheaper price. Investments in upgraded metallurgical silicon began to show up a few years ago when there was a shortage of pure silicon, which was fetching hundreds of dollars per kilogram.
But refining metallurgical silicon so that it can be made into solar cells that can perform as well as those made from purer silicon hasn't proven to be an easy task.
Meanwhile, the price for the purer silicon has fallen by roughly 50 percent to reach about $70 per kilogram over the past year. That has raised questions about whether upgraded metallurgical silicon can compete in price and quality.
Q-Cells (OTCPK:QCLSF), one of the largest solar cell makers in the world, was once a big believer in the value of upgraded metallurgical silicon and signed deals to buy such material. But the German company, which has laid off workers and struggled to stay healthy in this recession, recently said it hadn't been using upgraded metallurgical silicon for its production.