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Non-Tech : Alternative energy
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To: Eric who wrote (7765)4/7/2010 2:02:24 AM
From: Jacob Snyder  Read Replies (1) of 16955
 
re: REC's $20/kg cash cost for polysilicon from Moses Lake facility:

From the article:
pv-tech.org
$1.7 billion capital investment outlay ongoing at the site (which also includes two new silane plants and other support facilities)...The project has run about 67% over the original budget...14 of the 24 reactors are processing granular poly...slated 10,500MT nameplate annual capacity...FBR is the cornerstone of REC Si’s efforts to whack at least 40% out of poly production costs by 2012 and to push the cash cost per kilo of poly granules below $20 by the end of 2010

Correct me if I'm wrong on this, but "cash cost" is like "running cost" or "operating cost", and does not include the initial capital cost of building the factory. Since that capital cost is 1.7B$, and may be more by the time the ramp-up is done, their total cost of production is going to be a lot more than $20/kg. Also, that $20/kg cost is a prediction for the future (end-2010), not something they are actually doing today.

From REC's 4Q09 results:
hugin.info
75% of REC's assets were in ramp-up during 2009, and 50% will be in ramp-up during 2010...Given the current outlook for REC's operational earnings, and the profile of the company's capital expenditures, it is likely that certain financial ratios will fall outside the currently agreed limits under the company's existing syndicated credit facilities.

(translation: They bit off more than they can chew, and now their bankers are really worried.)
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