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The East is Green: China’s Focus on High Tech Raw Materials for Solar and Other Alternate Energy Technologies

|Includes: First Solar, Inc. (FSLR)

China is by far the world’s largest end user of copper, from which is constructed the nerve system of our civilization, the electric power distribution grid, as well as all of the devices that generate electricity and transform it into motive power or heat for individual or industrial end use. China’s domestic mining produced just short of a million tons of new copper in 2009, a year in which the total global production of copper was 16 million tons. Yet China used in 2009 just short of 6 million tons of copper, nearly 40% of 2009’s total world supply of that metal. This amount used in China, 6 million tons, is one and one-half times the total annual copper production of copper by all Chilean sources-Chile is the world’s largest producer of copper at 4 million tons a year, which is 25% of global production.

China imports its copper mostly as a standard form of crude (impure) metal and then purifies it and fabricates it into forms for drawing wire and producing sheet and bar stock for manufacturing purposes. The crude-in the sense of too impure for electrical use-copper has usually already been processed at the originating mine to remove most of its non metallic impurities, but still very much carried in the “crude’ copper, as it goes into final electro-refining, is molybdenum, gold, silver, platinum, palladium, selenium, tellurium and rhenium. Some copper ores are even very significant sources of gold, but most are not. What is significant about China’s inflow and the processing to “purify” it is the sheer volume of it. Even “impurities” in the copper that are present only as traces can be produced in relatively substantial quantities when the flow through produces  6 million tons of copper.

China through this final purification step is gifted with the world’s largest reliable supplies of the above named rare technology metals, some of which are critical to the green revolution in sustainable  alternate energy technology.

Take the example of tellurium, which in addition to being recovered from the vast volumes of copper processed in China is also able to be recovered from the vast volumes of lead, zinc, bismuth, and antimony produced or refined in China. In addition to the low grade sources ( ie. the "traces' in the base and more common other metals)a Chinese company operates the only mine in the world the primary product of which is tellurium. The mine's avaerage grade of tellurium is an astounding 1.17%.

That company, Apollo Solar Engineering in Chengdu, Sichuan, which is listed in the USA, (OTCPK:ASOE)  is the world’s largest producer of ultra-high purity tellurium, which it produces primarily from its mine, at a rate of 3-4 tons a month. The company is also the destination point for much of the crude tellurium recovered in China from the refining of the ores, domestic and imported, of copper, lead, gold, silver, antimony, and bismuth.

There can be no cadmium telluride thin-film photovoltaic solar cells made without ultrahigh purity tellurium, ultrahigh purity cadmium telluride, and ultrahigh purity cadmium sulfide. The pre-eminent American producer of thin film photovoltaic solar cells, First Solar (NASDAQ:FSLR), is already Apollo’s largest customer for its production of all of these items.

There is an International “New Energy” Fair in Chengdu on Sep. 28-30. "New Energy" is the most common translation into Chinese of the term "Alternate Energy."I have been invited to speak on the future and the importance of the production of rare technology metals such as tellurium selenium, indium, gallium, as well as of the “common" technology metal, copper, to the thin-film photovoltaic solar cell industry both in China and in the world.

China is already the world’s largest producer or the largest end user or both of ALL of those metals! Those who want to invest in green technologies need to take note.  China now dominates the production and use of the specialized technology metals critical for solar. China should be the first place that anyone who wishes to invest in the future of thin film photovoltaic solar cell production looks.

Keep in mind that China is rapidly going green even as the rest of the world just talks about it, and that if we in the west wait any longer it will be of no avail to us, because the critical raw materials production is already centered in China.


Disclosure: I am a business development consultant to Apollo Solar Engineering