Do CIGS thin-film production expansions raise material supply concerns?

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In the fast-paced world of thin-film PV production, concerns over material supply have often been raised, potentially restricting growth and limiting manufacturing cost reductions as prices of materials such as rare earth metals go through the roof. Speculation can become rife, especially when there is a lack of easily available data on supply and real demand. In the last few years, as CdTe leader First Solar ramped to volume production, tellurium rapidly increased in price, sparking speculation that the material supply was fundamentally limited. We also saw concern at the supply of silane gas for a-Si thin-film production, and now with the expected significant ramp of CIGS solar cells, are concerns over indium and gallium supply justified?

Only very recently we have seen significant activity from CIGS PV producers regarding volume production start-up and capacity increases. In early September, we saw Solyndra announce that its DOE part-funded Fab 2 would have an annual capacity of approximately 500MW, while two days later we had Nanosolar announce the completion of its 640MW factory near Berlin.

Throw in others such as Q-Cells’ subsidiary Solibro completing its 90MW CIGS plant, GroupSat’s plans for 100MW ramp – and all this happening in September!

In July during Intersolar North America, Greentech Media noted that in that region alone, CIGS production would increase from 32MW in 2007 to 1.3GW in 2012.

It should come as no surprise then that there is emerging a serious demand for thin-film materials in the near future.

However, Shyam Mehta, senior analyst of solar markets at Greentech Media, responded to a question I raised at their press conference during Intersolar concerning possible supply constraints on indium and the like. Mehta said they had undertaken a review of these materials and didn’t feel there was a concern for shortages, nor was there a danger of supply limiting capacity expansions.

Obviously, a press conference Q&A was not the time and place to conduct a serious review of the supply side for these materials. A few days later, it was with great interest that I received Indium Corp.’s review of the supply side of these materials. Recently written by Claire Mikolajczak, director, metals and chemicals at Indium, the paper delves into these materials’ actual and theoretical availability.

Below are some key data points and perspectives on supply from the study:

1. Indium production increased from 70 to 500MT per year over the last 20 years to meet demand. This has been made possible due to improvements in the extraction technology combined with the economics of higher prices. Indium is now recovered as a by-product of a wider range of base metals with concentrations of as little as 100 ppm of indium per ton material.

2.  Indium reserves (proven and probable, measured and indicated, and inferred) in identified base metal mines in the ‘Western’ world amount to 26,000MT of indium. Those located in the rest of the world, i.e. China and the CIS (former Soviet Union), amount to about 23,000MT of indium, bringing the total world reserve to close to 50,000MT of indium

3. Existing mines of indium-containing ores are dispensed around the globe in terms of geography, political policies, and influences. This broad geographic and political dispersion adds to the stability of the indium supply.

4. Currently, only about 30% of the 1,500MTof indium mined worldwide every year is transformed into refined indium metal for the following reasons:

a) 30% of indium-containing base metal concentrates still do not reach “indium-capable” smelters and this indium continues to be lost.

b) 70% of the indium-containing concentrates that do reach indium-capable smelters are only extracted at a final average rate of about 50%

However, the remaining 50% that is not immediately transformed into indium metal and remains associated with other elements and impurities in a residue form is accumulated and is available for further treatment and recovery later as outlined in 2.3 below.

5. Planar targets of indium-tin oxide (ITO) are commonly sputtered onto glass panels, but less than 30% of the material from the target is deposited onto the glass. The remaining ~70% is left in “used” ITO targets, grinding sludge, or on the shields of the sputtering chambers. Factoring in recovery yields, it is estimated that over 70% of the indium from the starting ITO targets is recovered via reclaim processing. The amount of indium coming back from the reclaiming is activity is now getting close to 1000MT indium per year or two times the amount of virgin indium consumed.

We therefore conclude that based on mining reserves (100 years at a rate of 500MT of virgin indium per year), plus residue reserves (30 years at a rate of 500MT per year), combined with continued improvements in recoveries of virgin and reclaimed materials, and ongoing exploration, the world will not run out of indium. These reserves quantities do not factor in recovery yields but are significant enough to reassure the CIGS industry.

As for gallium, Indium noted that gallium-containing bauxite is plentiful in the earth’s crust and is widely distributed both geographically and politically but output is limited only by facilities investment and capacities. This would result in ‘intermittent volatility’ to supply and prices but isn’t seen as a problem.

It would seem from Indium’s study that supply of both materials is not expected to impact CIGS thin-film manufacturing expansion plans now or in the future. After scares circulated a few years ago about tellurium at a time when First Solar was starting to ramp production of its CdTe modules in earnest, its good to know we shouldn’t expect concerns to surface and gain much credibility in relation to CIGS ramping. If they do, I am sure a quick search will bring them to this blog and the key data points from the Indium Corp. study.

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