Hoku Materials signs solar silicon metal supply deal with Polymet

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Hoku Materials has signed a silicon metal supply agreement with Polymet Alloys. The wholly owned subsidiary of Hoku Scientific said it plans to use the metallurgical-grade silicon for the production of trichlorosilane, a critical raw material in the manufacture of solar-grade polysilicon.

Polymet, a privately held metals industry supply company located in Birmingham, AL, will source the silicon metal exclusively from Rima Industrial, a major Brazilian ferro- and nonferrous alloy producer.

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The agreement states that Polymet will supply Hoku with guaranteed amounts of metallurgical-grade silicon for three years, beginning in 2009. The guaranteed annual amount of silicon metal should be enough to support the start-up and initial ramp of Hoku’s Pocatello, ID, chemical plant in 2009, and can be expanded at both parties’ option in the second and third years, according to Hoku.

The companies did not disclose the financial terms of the agreement or the amount of metallurgical-grade silicon to be supplied over the course of the deal.

Hoku said it expects to sign at least one additional silicon metal supply agreements to diversify its supply chain and to secure additional quantities of material to support its expected annual full plant production level of up to 4000 metric tons of solar-grade polysilicon.

The company said during its most recent quarterly financial call that it remains on track to support an initial delivery of polysilicon in the first half of 2009, then plans to ramp up manufacturing throughout 2009 and into 2010, when it expects to reach full production capability. This planned ramp fully supports product deliveries in accordance with customer supply contracts, according to Hoku.

“Silicon metal is a key raw material for Siemens-based production of polysilicon and another important way for Hoku to manage our production costs,” said Dustin Shindo, chairman/CEO of Hoku Scientific. “The fixed rates negotiated under this agreement are fair and fit well within our projected financial models for our operations.”

“Rima prides itself on being the major producer of green silicon metal in the world using clean hydropower and sustainably managed timber from its own eucalyptus plantations,” said Braulio Lage, VP of Polymet. “We feel there is a natural alignment between Polymet/Rima and Hoku’s focus on renewable energy technology and are very pleased to have established a relationship with a key emerging player in the industry.”

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