Wednesday, February 02, 2011 4:23:00 PM
Tellurium is a Rare Earth Element in CdTe.
According to the U.S. Geological Survey, Mineral Commodity Summaries, January 2011, p.164 (google: mcs2011.pdf) Half the production is from China and China has cut exports of REE to the West.Tellurium’s yearly production is allocated among many industries –
Tellurium’s yearly production is a by-product of a specific copper- mining process for high-yield copper ore. As low-grade copper ore becomes prevalent it is un-economical to use the preferred method, and less Tellurium will be mined.
The economic driver for Telllurium production, namely a specific copper mining process is disappearing.
Even high prices for Tellurium cannot make the copper miners use
an uneconomical process because Tellurium is only a minor by-product of copper mining. Tellurium production will decrease. Other more important military and business uses for Tellurium will conscript additional amounts of this REE. Availability of this REE will be a major problem for CdTe PV solar manufacturers.
First Solar is planning increasing production as follows-
2009 – 1.22GW
2010 – 1.43GW
2011 – 2.14GW
2012 – 2.74GW
Each 1GW of FSLR solar panels is believed to use between 60 to 100 Metric Tons of Tellurium. Total production of Tellurium worldwide is believed to be between 500 to 1000 Metric Tons and is allocated. Increased production by FSLR will have to come from new sources at increased mining and production cost at a time that both are declining.
A similar problem exists for CIGS solar manufacturers because
of their REE use in their panels.
FSLR's most pressing problem is obtaining Tellurium.
Without it they do not have a product. FSLR is lowering their panel prices to maintain competitiveness at a time when all government subsidies and Feed-In Tariffs are declining. Compounding the problem is Tellurium's increasing cost, lower sales price and the lower profit margins, and the drying up of government subsidies and feed-in tariffs. As commodity prices increase this problem will become more apparent and shorting FSLR will be the play.
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