Musings, politics and environmental issues

Posts tagged ‘Arion Bank’

Difficult silicon market hinders sale of Helguvik smelter

Iceland’s Arion Bank, which has a number of holding companies including Stakksberg, the company entailed with the task of trying to sell the silicon metal smelter in Helguvik originally owned by United Silicon and closed down by the Environment Agency (EA) in September 2017, has sent out a statement saying that they have reduced the value ascribed to Stakksberg from 6.9 billion kronur (USD 52.9 million) at the end of March 2019 to 3.2 billion kronur (USD 25.6 million) nine months later.

Stakksberg has been rectifying some of the problems with the smelter identified by the EA, and has been trying to find a buyer for almost two years. The smelter’s original owner, United Silicon, went bankrupt in January 2018, but in December 2017 they too were searching for buyers.

According to Stakksberg’s homepage, the idea was to have the smelter up and running in the last quarter of 2020.

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Arion Bank says that because of “uncertainty in the market, several manufacturers have reduced their production or closed smelters. Thus unused manufacturing capacity is available that might well have a negative effect on the sale of the silicon metal smelter in Helguvik”.

If they have done their homework, potential buyers – if there are any – would be aware of the problems faced by PCC Bakki Silicon in the north, who asked for more funding last year. PCC have also had unexpected problems with Iceland’s winter weather, and say that the problems they have encountered were not those they were expecting – despite using best available technology, etc. None of this would be of any comfort to prospective buyers of the Helguvik smelter down south.

People involved in ASH, the campaign group against the reopening of the Helguvik silicon smelter, are overjoyed however, as there was a lot of opposition by locals to the smelter during the short time that it was operating.

It’s not just the silicon metal industry that is facing problems. Because of worsening conditions in the aluminium market, which are “very demanding”, Iceland’s oldest aluminium smelter is going to operate at 15% reduced capacity in 2020, with a corresponding decrease in electricity use. The plant is currently Iceland’s second largest user of electricity.

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This smelter, which is situated on the outskirts of the capital city, is currently owned by Rio Tinto Alcan but was searching for a new owner two years ago. Norsk Hydro was going to buy it but the sale fell through seven months later.

Update, 12 February 2019: Rio Tinto has just announced that it will do a strategic review of its Icelandic smelter at Straumsvik, due to high electricity costs – which Icelanders consider are actually very low – and “historically low” aluminium prices. They may even close the smelter. The review is expected to be completed within the next few months.

 

Former United Silicon smelter rears its ugly head again

At a packed residents’ meeting last night over the future of the silicon metal plant in Helguvik formerly owned by United Silicon, Thordur Thordarson from Stakksberg said, in  response to a question about whether the thought had ever occurred to them to simply dismantle the plant, “Too much money has been spent on the silicon metal smelter already. If we abandon the aim of resurrecting the plant, it would be inexcusable handling of money.”

But the local campaigning group ASH say that they don’t want it to reopen.

Stakksberg is the company set up by Arion Bank to deal with the mess left by United Silicon. They intend to sell the plant when the extensive repairs and modifications have been completed. They say that the plant should be operational by 2020.

The meeting was called at two days’ notice. In the intervening period, considerable media attention was directed at the dormant plant, and the other silicon plant designed to be adjacent to the (Stakksberg) plant. The latter plant, which would be operated by Thorsil, had virtually disappeared off the drawing board as nothing had been heard about it for about two years – until someone from the local council said that the two silicon metal smelters would rescue Helguvik harbour.

The meeting, which lasted for almost three hours, consisted of explanations by Thordarson followed by powerpoint presentations by a Verkis engineer and a consultant from Norwegian firm Multiconsult. The first EIA for the Stakksberg/United Silicon plant was ostensibly prepared by Verkis, while Multiconsult were brought in last year to advise on problems – apparently, seven silicon metal smelters operate smoothly in Norway (though, unbeknown to the Multiconsult engineer, there appear to be health problems such as silicosis afflicting the workers).

Thordarson said that the “most able specialists” were advising Stakksberg. Note that United Silicon also said they had experts on hand to deal with any problems, and look what happened there.

Two of us brought up the matter of PCC Bakki, whose silicon smelter has been beset by problems and where start-up has not been easy, to say the least. Thordarson said he was not aware of the situation there, but “must look into it”. Unbelievable!!!

Other issues were brought up during question time. If Thorsil gets to operate with four furnaces and Stakksberg with four, how will anyone know which smelter is to blame if pollution levels rise sky high? No one knew the answer.

The Multiconsult person said that routine maintenance would mean that the furnaces would be shut down sometimes. Each time a furnace is restarted, there is the risk of burning odours. Multiply that by four (or eight) and there could be constant problems. One of the additions to the plant will be an emergency smoke stack that will operate during start-up. Some people are not convinced that this will make a difference.

Outside of the meeting, ASH is preparing a group lawsuit to call for a citizen’s referendum to try and stop the plant from becoming operational again.

A scoping document (in Icelandic) for a fresh EIA has been put forward and can be seen here.

 

 

Fire at PCC silicon smelter

The Icelandic media have just reported that a fire broke out last night at the PCC silicon smelter at Bakki, Husavik. The fire was in the furnace building and lasted about three hours. No one was hurt.

PCC have not put any news on their website since 8 June, so I don’t know whether it’s actually been operating as their last news said that they intended to start up the furnace again after midnight, i.e. June 9. I emailed them two weeks or so ago to ask if the reason nothing new was on their website was because nothing newsworthy was happening, but they didn’t reply. They had generally reported when the plant was being started up again but this time they didn’t.

Perhaps now the Environment Agency will start looking more closely into the operation at Bakki.

Today is the deadline for comments on the scoping document for improvements to the United Silicon plant which the company Stakksberg are overseeing. Stakksberg was set up specifically by Arion Bank for the process, as it is intended to sell the plant and get it operating again, though probably this will not happen before 2020. Karen Kjartansdottir, who was in charge of publicity for United Silicon, is now doing the same for Stakksberg.

Fire in silicon smelters is not unheard of, at least not in Iceland, as three fires occurred in the United Silicon plant at Helguvik, southwest Iceland, before the plant was eventually closed by the Environment Agency. Activists from ASH, the group opposed to heavy industry at Helguvik, are not surprised by the fire at Bakki – the best possible technology was supposedly being used at Bakki but STILL a fire can occur.

Problems with the United Silicon plant were partly attributed to the owners using a mismatch of equipment. But it appears that silicon smelters are proving more of a problem than the Icelandic authorities – not to mention the Icelandic government –  originally thought.

Stay tuned – this blog will probably get updated.

Update: PCC Bakki are on Facebook.  They have news (in Icelandic) there, including about the fire. They want to start up the other furnace as soon as possible while the other is getting repaired/checked. They have also now (mid-afternoon Tuesday) updated the news page on their website with information about the fire.

Update 19 July: They have still not started up the smelter again. “It is clear that changes have to be made,” they say.

Update 25 July: They began to start it up again yesterday morning (the process has to be done gradually), but shut it down 8 hours later due to a leak in the cooling system. They warned that villagers might be aware of odour.

Silicon metal plant at Helguvik may start operation in 2020

I didn’t think it was possible, but it looks like it is. Final touches are being made to designs for improvements to the  beleaguered silicon metal plant that was previously owned and operated by United Silicon. After United Silicon went into liquidation, Arion Bank took over and set up a new company, EB0117 ehf, that has the remit of getting the plant into a functional state again. img_0223

Apparently, some of the improvements will be subject to an EIA – I’d thought that the whole development would be subject to an EIA but it looks like this won’t happen.

The bank wants to sell the plant. Some buyers are said to have shown interest, including large companies that already operate silicon metal plants and are supposed to know what they’re doing.

The plan is for the plant to restart in 2020. Costs are expected to be around ISK 3 billion (almost 25 million Euros), but better estimates won’t be known until the autumn.

Meanwhile, PCC Bakki have announced that they intend to double the capacity of their silicon metal plant in the north as they will not necessarily have to invest in a great deal of extra equipment, with the exception of a building to house two extra furnaces. Admittedly, this expansion had been part of the original plan, but I suspect people are surprised that PCC is thinking about the expansion so soon, after experiencing various teething problems.

However, the expansion will need financing, and that process will take at least 1.5 years. Designing the expansion will probably take 4-6 months.

In the meantime, anything might happen.

Update: Recent council elections have led to a new majority in Reykjanesbaer, which includes Helguvik, which says it rejects the development of polluting industry at Helguvik and is opposed to the reopening of the silicon metal plant there. This might also mean that Thorsil will give up on its plan to set up a silicon metal smelter opposite the one previously owned by United Silicon.

Watch this space.

Update: It appears that the company known as EB0117 is now called Stakksberg and comments have been requested for a draft evaluation strategy (in Icelandic) (scoping document) for improvements to the plant. The deadline for comments is July 10.

Arion Bank now in control of United Silicon

Arion Bank has now taken over virtually all of United Silicon’s (USi) assets. When the company went into liquidation, Arion took over a total debt of around ISK 10 billion (nearly $US 100 million) incurred by Usi over preceding months. The bank has already written off almost ISK 5 billion.

The bank intends to make the necessary improvements to make the plant operational again and then to sell the plant to a buyer. Alternatively, the buyer will make the necessary improvements, which are expected to take 18 months to two years and will also involve a new environmental impact assessment.

A new company, Eignabjarg, will be set up around the operation. Prospective buyers of Eignabjarg should contact Arion Bank. Apparently there has been some interest, but personally I doubt the plant is sellable.

On a related note, the new PCC silicon metal plant in North Iceland is about to start up. It will be interesting to see how things turn out for them, given the experience of USi. PCC have no qualms (ostensibly) about how their plant will fare – but the start has been delayed since December and like the USi smelter, it is located very close to residential areas, and they say that residents should expect odours during the start-up period. Prospective buyers of Eignabjarg will no doubt follow news of PCC’s operation closely….

Nothing has been heard from Thorsil recently. They intend (or maybe it’s now intended – who knows?) to build a silicon metal plant directly opposite that of USi in Helguvik. They are also probably waiting to see what will happen at the PCC plant in the north.

 

 

End of United Silicon

The end has come for United Silicon. They have requested bankruptcy. The moratorium they were given ends today, and last night the Icelandic press reported on latest developments.

This is what has happened over the last few days. United Silicon had written a letter to the Environment Agency (EA) dated 16 January, detailing what they were planning to do, and said they hoped that some of the required rectifications could be carried out after the plant was in operation. Three days later, the EA replied (Norconsult’s report in English follows on from the EA’s Icelandic text). They had enlisted the help of Norwegian consultants Norconsult (United Silicon had been using the Norwegian engineering firm Multiconsult) and said that virtually all of the items in the company’s improvement plan must be carried out before another start-up could be considered, including erection of a smoke stack/ chimney to reduce the odour problems experienced by local residents (the company had hoped to do this once the plant was in operation).

Erection of the chimney, not to mention the other modifications needed, could take up to two years and would be expensive, plus a new operating licence and environmental impact assessment would be needed. After receiving the letter from the EA on Friday, the company realised that future operation would not be feasible, and that the probability of a company buying the plant was almost non-existent, and requested bankruptcy.

This morning, Iceland’s National Audit office announced that they are following up on a request by parliamentarian Hanna Katrin Fridriksson into how the Icelandic State has been involved in the United Silicon affair, from investments, environmental impact assessment, issuing of the operating licence and assessment of the plant on the health of local residents. They intend to produce the report by the end of March.

Since the plant’s operation was stopped on September 1, Arion Bank has been paying salary costs of 55 employees and also for the cost of necessary research.

 

Are United Silicon about to give up?

Today was supposed to be D-Day for United Silicon in Iceland, the day when they were supposed to have paid off all their dues. But no, this was not to be the case, as they asked for another moratorium on payments and were given an extension of 6 weeks, till 22 January. In theory they could have got a 3-month extension, but they said that 6 weeks would suffice.

Karen Kjartansdottir, spokesperson for United Silicon, says that while the smelter has not been operating they have been going over what needs to be done and carrying out some of the necessary improvements. These are costly, and may take another 6 months to complete. Who pays? Arion bank, who have already written off a sizeable proportion of United Silicon’s debts.

But she also said that they were looking at debt pooling, and intimated that they had also been using the time to find out if there were any prospective buyers for the plant. Apparently some large companies in the same business had shown interest, though no one has come up with an offer.

In one way it’s good that they have been given the extra time, because by that time the new PCC silicon smelter in North Iceland will probably have started to operate – and PCC have warned local inhabitants that odour and minor health problems may be experienced during the first few weeks, while the plant is being brought up to full capacity. Sound familiar?