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REC Silicon to reopen Moses Lake plant

by CHARLES H. FEATHERSTONE
Staff Writer | May 27, 2022 4:44 PM

MOSES LAKE — REC Silicon is going to resume production of solar-grade polysilicon at its facility in Moses Lake, company CEO James May said during a conference call late Thursday to review the company’s first-quarter 2022 financial results.

“We are going to restart in Moses Lake,” May said.

During the conference call, May said the company expects to begin producing solar-grade polysilicon in Moses Lake in late 2023 and hopes to be producing at 100% of the facility’s capacity by the end of 2024. Previous restart plans, which saw the company resume production in 2023, only envisioned output reaching 50% of total capacity, May said.

The plant has been shuttered since 2019 as the result of a protracted trade dispute with China over tariffs on Chinese-made solar panels. China imposed steep tariffs on REC’s polysilicon, used to make the wafers and modules that comprise solar panels. Those tariffs effectively prevent REC from selling its product to Chinese solar panel makers. China controls between 80% and 90% of global solar production.

May said the plant restart is a direct result of a deal with South Korean solar panel maker Hanwha Solutions, which purchased around 21% of REC Silicon in a series of deals in late 2021 and early 2022. In the U.S., Hanwha makes Q Cell solar panels in a factory in Dalton, Georgia, while Norway-based REC Silicon produces electronic-grade silicon and silane gas used in making silicon chips and flat-panel displays at a facility in Butte, Montana, as well as the solar facility in Moses Lake.

In fact, May said REC is currently negotiating contracts to supply Hanwha with both silicon gas and solar-grade polysilicon, and when the Moses Lake facility is up and running again, will focus on providing its output to Hanwha.

“We are talking with other customers, but Hanwha is the priority,” May said.

May said over the last several years, REC has talked with advanced battery-makers Sila Nanotechnologies and Group14 Technologies — both startups are locating production facilities in Grant County, and California-based Sila purchased the large, empty building across Road N from REC. Neither company consulted with REC when they decided to locate in Moses Lake, he said.

REC is the primary source of the silane — silicon gas — both companies will need to create their products, May said.

“We welcome both companies to Moses Lake,” he said.

May said REC is currently in a good financial position — with $204 million in cash on hand. Further, REC currently has more money in the bank than it owes in debt, according to Chief Financial Officer Douglas Moore.

The company will likely need more cash in order to completely resume production in Moses Lake. May, however, would not say how much, or whether, the company would issue more shares or borrow to raise those funds or give any details on what it will cost to restart production in Moses Lake.

“As we go forward and complete the project, there will be plenty of time to react,” May said.

For the first three months of 2022, REC posted earnings of $3.6 million on revenues of $34.6 million derived from sales of 764 metric tons of silicon gas and 267 metric tons of polysilicon in the first quarter of 2022. The value of shares in REC Silicon traded on the Oslobors, Norway’s stock exchange, ended trading at 18.83 Norwegian kroner ($1.99) per share, down nearly 4% from the previous close.

Charles H. Featherstone can be reached at cfeatherstone@columbiabasinherald.com.