REC enters major silicon powder contract with unnamed Asian company

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In a supply deal worth approximately US$500 million (NOK 2.9 billion), REC will supply an Asia-based PV company with approximately 1,500MT per annum of silicon powder for a timeframe of seven years. Silicon powder, traditionally a low-value material, is a form of fine particulate silicon from the FBR process. The take-or-pay agreement is a result of REC’s development of technologies to develop this material and address commercial opportunities.

Under the terms of the agreement, prices and volumes of the silicon powder are predetermined for the seven-year period. Annual delivery volumes are expected to reach 1,500MT following lower volume deliveries earlier in the contract. REC will receive a prepayment fee of $65 million (~NOK 380 million) by the end of 2008.

“This will enable us to increase the revenue and consequently the financial return on our latest polysilicon expansions, through the marketing of a product that REC presently does not intend to utilize internally,” says Erik Thorsen, President and CEO of REC.

By Síle Mc Mahon

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