REC to keep Moses Lake facility open

MOSES LAKE — Despite posting a third-quarter loss, REC Silicon will not close its Moses Lake production facility and will not lay off any more employees, according to company president and CEO Tore Torvund.

“We will not shut Moses Lake down,” Torvund said.

Speaking during a late Tuesday night conference call (early morning Wednesday in Oslo, where the company is headquartered), Torvund said the company has cash on hand to keep production of polysilicon in Moses Lake at 25 percent of capacity through the beginning of 2020.

“We now have less than 400 people working worldwide,” Torvund told investors. “We are a lean organization, and we will make no further reductions.”

The company’s Moses Lake facility produces polysilicon ingots for use in solar panel modules using a patented “fluid bed reactor” process, which is less expensive and more efficient than the other process commonly used to produce polysilicon.

The company, however, is blocked from selling its ingots to Chinese module makers after an Obama-era trade dispute led to Beijing imposing stiff tariffs on U.S. polysilicon. REC has managed to stay afloat by cultivating solar module makers in Taiwan.

For the third quarter of 2018, REC posted a loss of $6.1 million on total company revenues of $43.7 million. REC Silicon also produces silane — silicon gas — at its facility in Butte, Mont., for use in making semiconductors and flat panel displays. Silane sales to China are unaffected by the trade dispute, and the company earned 9.3 million on its silane exports in the third quarter.

Torvund said that while demand for solar panels has been flat this year, he expects a healthy 10-20 percent increase in demand in 2019 as the price of photovoltaic electricity generation reaches parity with natural gas and coal and as the Chinese polysilicon industry adjusts to the end of government subsidies.

“Solar will continue to grow,” he said. “The (photovoltaic) market will double in the next 5-10 years.”

Torvund also said a potential new market is also emerging for the company’s polysilicon and silane gas — as a replacement for graphite anodes in batteries.

Anodes are the chemical substances that channel electrons into a battery, and silicon anodes would allow for faster and more efficient charging.

Torvund said REC has delivered small quantities of both polysilicon and silane to “a lot of battery producers” as part of tests to see how the product would work.

In fact, Torvund said his company has talked with battery manufacturers interested in locating close to REC facilities in Moses Lake or Butte in order to secure a steady supply of silicon. However, there are still technical issues to work out before silicon-anode batteries are commercially viable, he added.

“This is a real hot thing, replacing graphite with silicon,” he said.

Because of this, Torvund remains guardedly optimistic about his company’s future.

“We are really hopeful things will gradually improve for REC Silicon,” he said.

On Wednesday, the company’s stock on the Oslo Bors, Norway’s stock exchange, rose 15 percent to close at 62 øre, or 7 cents. In the last four months, REC Silicon’s stock has lost more than 50 percent of its value.

Charles H. Featherstone can be reached via email at countygvt@columbiabasinherald.com.