Canadian Metals to broaden silicon product offerings
On November 18, 2015 Canadian Metals Inc. (CSE:CME) announced that it plans to enhance its strategic options with the introduction of a Hybrid Flex concept for its planned ferrosilicon production plant based on its Langis quartzite deposit in Matapedia Quebec. The novel approach would allow the facility to shift production between ferrosilicon and metallurgical grade silicon depending on market needs. The enhanced plant profile is an analysis in their ongoing and yet to be disclosed Preliminary Economic Assessment (PEA/NI 43-101).
This approach is meant as an arbitrage between two production streams. Ferrosilicon makes up 80% of the silicon trade whereas metallurgical grade silicon makes up 20% of the silicon trade. Production of both types of silicon would take advantage of the low power rates in Quebec as the province offers the best power rates in North America because of the province power surplus (Quebec electricity rates).
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Investors and analysts looking to understand the variance in price points between ferrosilicon and metallurgical grade silicon may wish to consult a comprehensive 411-page review titled Global Silicon and Ferrosilicon Market.
Elemental silicon not alloyed with significant quantities of other elements, and usually > 95%, is called metallurgical silicon. In turn 5–10% of metallurgical grade silicon is purified to higher grades for use in electronics, including for example photovoltaic cells. Metallurgical grade silicon is manufactured by reacting high-purity silica with wood, charcoal, and coal in an electric arc furnace using carbon electrodes. Metallurgical grade silicon “metal” has its primary use in the aluminum casting industry to make aluminum-silicon alloy parts. The remainder (about 45%) is used by the chemical industry.
Ferrosilicon is lower grade is produced by reduction of silica or sand with coke in presence of iron. Ferrosilicons with silicon content up to about 15% are made in blast furnaces lined with acid fire bricks. Ferrosilicons with higher silicon content are made in electric arc furnaces. The market formulations are ferrosilicons with 15%, 45%, 75%, and 90% silicon. Ferrosilicon is used as a source of silicon to reduce metals from their oxides and to deoxidize steel and other ferrous alloys. This prevents the loss of carbon from the molten steel. Ferrosilicon is also used for manufacture of silicon, corrosion-resistant and high-temperature resistant ferrous silicon alloys, and silicon steel for electromotors and transformer cores. In cast iron production, ferrosilicon serves as a graphitization accelerator. In arc welding, ferrosilicon is used as electrode coatings.
To assess the viability of the Hybrid Flex approach we need three datasets which we expect are being reviewed as a part of the PEA work: the added CAPEX associated with establishing two production lines notwithstanding that there are potential savings associated with common processing and handling equipment; the OPEX associated with the production stream of each; and, finally the market pricing of each ferrosilicon and metallurgical grade silicon.
Dr. Luc C. Duchesne is a Speaker and Author with a PhD in Biochemistry. With three decades of scientific and business experience, he has published ... <Read more about Dr. Luc Duchesne>