PCC Bakki silicon metal smelter to close

 

On Thursday last week, PCC Bakki sent out a press release saying that they would be shutting down the smelter at the end of July. The closure is supposed to be temporary, as they hope to restart after 6-9 months. But whether it will restart is another question.

PCC blame COVID-19 and lack of demand due to it. The Icelandic press, however, have been quick to point out that PCC has suffered economic and technical problems for a long time and have intimated that COVID may just be a pretext. Note that no news of this has appeared on PCC’s international site, nor their Icelandic site, nor their Icelandic Facebook page. Nor has it appeared on any of the English-language news sites in Iceland that I have checked.

Around 80 of 130 workers will be laid off, with more leaving after some modifications have been made to the plant. PCC’s idea is to rehire its current employees when it restarts again. The local council says that efforts will be made to find alternative work for those with families, who have become settled in the nearest town to the plant, Húsavík, but that people living in accommodation on site are likely to be more mobile and will move elsewhere to look for work. An unnamed shop steward said that PCC employees had sensed for some time that the plant would close.

Personally, I can’t see any of the workers deciding to stay in the area on the basis that it might/will reopen at some stage.

Rún­ar Sig­urpáls­son, CEO of PCC Bakki, is realistic and told an Icelandic newspaper that “he hoped he would be able to reclaim his staff. It’s no more complex than that … Whether it will be 6 months or 12 months I can’t say”. But he says that the global demand for silicon metal is low at the moment and the price is low. And the COVID-19 pandemic is by no means over, and it’s impossible to predict when it will end. He then said that for the company to restart, the price for silicon metal would have to rise significantly.

PCC have to keep paying Landsvirkun, their energy provider, as they have a take-or-pay energy agreement. Generally, the buyer has to keep paying energy costs, or at least 80% of the negotiated energy. When no income is being generated, this will be yet another setback that the company will have to face.

One of the arguments put forth for constructing smelters in Iceland has been that it will provide employment, meaning employment for the local community. But this doesn’t happen. Building is usually done by foreign workers as locals don’t want to do it, and it turns out that 30 of the 40 families that have been affected by PCC’s imminent closure are foreign, as are the 40 workers living in purpose-built site accommodation.

Meanwhile, comments on the new EIA for the former silicon metal plant in Helguvík have just closed. Stakksberg, a company set up by Arion bank to see to the sale of the plant that was shut down in September 2017 by the Environment Agency, has been trying to sell the plant for the last three years and I suspect that they hope that if a new EIA is approved, it will help the sale. The locals are against it re-opening, and the local council was also very critical of the EIA, especially in hindsight of its earlier experience with the Helguvík smelter. In my comment to the Planning Agency about the EIA for the Helguvík smelter, I asked whether notice had been taken of the problems suffered by the PCC smelter – and that was a few days before PCC announced they were closing.

I suspect that neither smelter will be operating a year from now.

Update, 2 July: PCC have another glitch to face. About 25% of the silicon metal produced by PCC goes to the USA and is used by the car industry. Not only is the car industry now selling far few cars because of lockdown, travel  restrictions and the like, but American silicon metal manufacturers Ferroglobe and Missisippi Silicon are now pressurizing the American government to impose a tax on silicon metal from Iceland, Bosnia, Malaysia and Kazakhstan because these countries hamper normal pricing and healthy competition.

Iceland’s CarbFix CCS scheme hopes to reduce carbon emissions from large-scale industry

I’ve just had an article published in BBC Future about how the CarbFix version of CCS (carbon capture and storage) can potentially be used to reduce CO2 emissions from large-scale industry, which in Iceland’s case consists of three aluminium smelters, a silicon metal smelter and a ferro-silicon plant.

The CarbFix method is adapted for Iceland’s porous, permeable basalt rock. Instead of taking thousands of years for mineralization to take place underground, with CarbFix it only takes 1-2 years. The procedure has been used to capture both CO2 and hydrogen sulphide from the Hellisheidi geothermal power plant, where CarbFix is in operation, but potentially it could be used for other gases. Read the article to find out more!

A great deal of emphasis in CCS has been put on Direct Air Capture, which is also discussed in the article. Part of the reason for the expense is the need to capture and fix small concentrations of target gases, which is more challenging. A small DAC system is now in operation at Hellisheidi.

Using funds from the EU’s Horizon 2020 programme, the four-year Geothermal Emission Control (GECO) project is investigating the use of CarbFix in Germany, Italy and Turkey near geothermal fields as well as Iceland. As the bedrock in these countries is not basalt, the initial groundwork involves carrying out background studies of potential injection sites, such as the potential of different rock types to mineralize CO2 and permeability. Injection is due to start in 2021.

Emissions from Iceland’s power plants are minimal compared to those in other countries. Nevertheless, Landsvirkjun, Iceland’s national power company that operates three geothermal power stations, is going to build a gas capture plant at one of its geothermal plants, Krafla, using CarbFix to capture the CO2 that is emitted, and in so doing intends to work towards becoming carbon neutral by 2025.

Because BBC attracts a global audience, my editor wanted me to include information on the processes involved in  conventional CCS as well, which I did. Currently, there are 2 large-scale power plants with CCS in operation, but the number of large-scale CCS facilities globally number 21: 2 of these are in power, while the remaining 19 are in industrial applications. I was originally given misleading information on the number of large-scale CCS plants operating, but after the article was published I was told the correct figures (see above), with which my editor says she’ll amend the article (she hasn’t done so yet).

 

 

Silicon metal smelters in Iceland – past, present and future

PCC Bakki are rather secretive about how well their silicon metal smelter in North Iceland is performing. They have not published any news on their website since December last year and their Facebook page gives limited information. Both are only in Icelandic.

However, the German site of the holding company has more recent news, dated April 30: “Our silicon metal production facility in Iceland currently operates with only one furnace. We shut down the second one due to a technical malfunction and it will remain out of operation until the plant constructor has carried out the projected modification of the roof. However, due to travel restrictions because of the coronavirus pandemic, this modification is likely to be postponed to the summer of this year“.

The holding company has an 87% share in PCC Bakki, the remainder being in the hands of Íslandsbanki bank and pension funds.

The PCC Quarterly Report 1/2020 is equally illuminating. Talking about the PCC company as a whole, it says: “The performance of PCC BakkiSilicon hf., Húsavík (Iceland), was adversely affected by the severe winter which lasted into April this year and led to several production interruptions during the quarter. The production output of PCC BakkiSilicon hf. was therefore significantly lower than planned, with corresponding effects on volume and sales. … The earnings for the first quarter of 2020 were likewise below our expectations and down on the previous year. The gross profit ratio declined compared to preceding quarters. The main reasons for this development … were the losses incurred by PCC BakkiSilicon hf.”

Towards the end of the report, more information is revealed. After repeating that Iceland’s severe winter weather had been detrimental to the smelter’s performance, the report goes on to say: “Moreover, PCC BakkiSilicon hf. remained unable to fully benefit from the slightly rising price level for silicon metal as a number of old contracts still had to be serviced at low prices during the first quarter. Meanwhile, one of the two arc furnaces has had to be entirely shut down due to the effects of Covid-19 and will probably not be put back into operation until completion by the plant construction contractor of the rehabilitation work on the roof of the facility’s filter house. Due to coronavirus restrictions, this rebuild planned for May will probably be delayed until summer 2020. The second furnace is presently operating stably. Our team on site is also currently working flat out on the implementation of various measures to increase efficiency and thus reduce costs in order to sustainably improve the earnings situation over the long term.”

However, it seems, from their Facebook page, that they have indeed being trying to start up the problematic arc furnace in May – unless their “stable” furnace has also been having problems. There are posts dated May 5, May 8, May 14, May 15 and May 28, which detail “cleaning” of one of the furnaces (twice), a broken electrode, unspecified repair work and maintenance work. In each case they warn that white or light-coloured smoke could be expected to emanate from the plant, and sometimes odour is mentioned.

Despite all the problems the PCC plant has been encountering with its “best available technology”, on the other side of Iceland Stakksberg (owned by Arion bank) is still trying to sell the silicon smelter that was owned and operated by United Silicon until it was closed down. Stakksberg have produced an environmental impact assessment for the Helguvik smelter that is composed of a number of separate files, probably in the hope that if the EIA gets approved the smelter will be easier to sell. The EIA is initially aimed at operating one furnace, but this will be stepped up to four furnaces in due course.

One of the files is from the Norwegian Institute for Air Research, NILU. Considering that  odour and respiratory problems were frequent complaints from local residents when the Helguvik smelter was operating, it is somewhat pathetic that NILU cannot provide better information that “While there have been several measurement studies around Norwegian metallurgic industries, no studies especially link emissions to odor and/or health impacts on the nearest neighbours. Nevertheless, we have included summary of three older studies, which we believe are relevant even if the source of emissions is not silicon industries.”

I haven’t read the whole EIA, but it would be interesting to know if those responsible for it have probed into the problems at PCC’s smelter at Bakki in the north of Iceland and taken account of the problems encountered there – including such basics as “severe winter weather”. I doubt they have.

Update: PCC have announced that they will be closing their silicon smelter at Bakki, supposedly on a temporary basis. They blame COVID-19 – there has been less demand and prices are lower. There is (as yet) nothing on their website, or the international PCC website, or PCC Bakki Facebook page, but here is a report in Icelandic giving more information. I will write another blog soon about it.