Wacker may add silicon metal capacity in Norway

HOLLA, Norway—Wacker Chemie A.G. will begin the push to expand silicon metal refinement in Norway. Whether or not that expansion takes shape is yet to be seen as the feasibility study for a new silicon melting furnace at the Holla production facility is ongoing.

"The expansion we are eyeing is a building block in our long-term growth strategy," Christof Bachmair, senior manager of media relations and information for Wacker, told Rubber News. "As we want to grow volumes of silicones and polysilicon until 2030, our demand for metallurgical-grade silicon will rise accordingly.

"These plans are not the outcome of any short-term geopolitical, pricing or availability considerations."

A final investment decision depends on necessary approvals by local authorities and the outcome of the feasibility study, Bachmair said.

Assuming all approvals ultimately are issued, the new refinery in Holla could be completed by 2025 and increase production at the facility by 50 percent.

A quantified capacity output for the plant with the addition was not known.

"Importantly, we have just started a feasibility study, so no final decisions on actually tackling this project have been made at this point in time," Bachmair said. "This is also the reason why we can't talk any detailed numbers as far as capital expenditures or capacities go."

Holla is the only Wacker facility that produces highly-refined silicon metal, a key building block for silicone rubber, aluminum alloys and photovoltaic applications.

But Wacker has no plans to sell the refined metal on the market. The material produced in Holla is shipped to Wacker's European manufacturing sites and is not shipped to the U.S or Asia.

"Our silicon metal production in Holla is for captive use only," Bachmair said. "It caters exclusively to our internal demand and we don't sell any silicon metal on the market."

Currently, the silicon metal refined in Holla covers about one-third of demand at Wacker's sites in Germany. The refined silicon metal that the company needs outside Germany "is procured on the market," Bachmair said.

Industry experts have noted that adding a refinery to an already operational site can cost between $150 million and $200 million.

Edmonton, Alberta-based Sinova Global, a high-purity quartz and silicon metal products supplier, said in December 2021 that it will spend $150 million to open a new silicon metal refining plant in Tiptonville, Tenn.

"The planned expansion measures in Holla are an important pre-requisite for accelerating our growth as planned," Wacker CEO Christian Hartel said May 25.

The growth of the silicone market is evident, as Munich-based Wacker eyes sales of more than $10.7 billion by 2030, with an EBITDA margin of over 20 percent.

"In order to meet the high customer demand for our silicone specialties and our high-quality polysilicon, we need to ensure that we have sufficient amounts of silicon metal available at all times," Hartel said. "By expanding our captive production, we will become more independent of price fluctuations on raw-material markets and enhance our supply security, both during times of peak demand and if problems arise in relation to restrictions in global supply chains."

Silicon dioxide is a common material, coming from quartz rock or sand, so it is not nearly as finite in its mining capacity as other elements used in alloys and chemical production processes.

When combined with a small percentage of carbon under an extreme amount of electricity-driven heat, SiO2 loses most of its oxygen to the carbon, leaving 99.99-percent pure silicon metal.

But converting silicon dioxide requires massive amounts of energy, and since many refineries achieve the required high temperatures from coal, the atmosphere can suffer.

"The production of silicon metal is very energy-intensive," said Robert Gnann, head of Wacker Silicones. "In order to significantly reduce greenhouse gas emissions in such production, the plants must be state-of-the-art. That is exactly what we are aiming for with the capacity expansion and planned infrastructure measures in Holla."

Obtaining cost-efficient sources of energy also are crucial for companies building silicon metal refineries.

In Holla, Wacker said it will look to the "electrification of production processes and the use of electricity from renewable resources."

To this end, Wacker signed a supply agreement with Norwegian electricity producer Statkraft in January for green electricity from hydropower.

Through December 2027, the company will supply Wacker with 2.35 terawatt hours of "certified green electricity" from hydroelectric power.

That represents about 40 percent of the site's annual demand, Wacker said.

"The expansion project is a logical step in our growth strategy and an important building block for halving our greenhouse gas emissions by 2030," Hartel said.

Wacker added it also will look to replace coal as the main reduction agent (for about 60 percent of the energy needs in its current processes) with renewable materials such as charcoal or pellets.

The company believes up to 430,000 metric tons of CO2 per year can be prevented from entering the atmosphere—and stored either for elimination or to be recycled, perhaps as a raw material for chemical products—in Holla.

At its Burghausen, Germany, site, Wacker is planning a 20-megawatt expansion known as Rhyme Bavaria, with a focus on production of renewable methanol (another essential chemical for silicone production) from existing production processes using green hydrogen and CO2.

The goal is net-zero CO2 production for the company by 2045.

To get the Burghausen project off the ground, the company is seeking funding in the "double-digit" millions of dollars range from the European Union, specifically from the European Commission's EU Innovation Fund.

After failing to qualify for money from the EU fund in 2020, Wacker reapplied March 7 for funding for the Burghausen site.

Overall, Wacker expects the investment there to be about $110.2 million for the expansion.

An electricity price of about 4 cents per kilowatt-hour is required (for the renewable methanol process) so that the project does not require further state funding to be profitable.

However, electricity costs in Germany are far higher than that—higher than what competitors pay in other parts of the world—hence the EU fund applications.