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Posts tagged ‘PCC Bakki’

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.

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 Icdelandic giving more information. I will write another blog soon about it.

Winter weather causes problems once again for PCC in Iceland

Every year has four seasons: spring, summer, autumn and winter. And houses, machines, equipment and the like should be designed to withstand/operate in all conditions.

This doesn’t seem to be the case for PCC Bakki Silicon, who run the silicon metal smelter at Bakki in the north of Iceland. Last winter – during their first year of operation – they said that the wintry weather was causing them problems, and now it’s happening again.

Earlier this week, Iceland suffered severe storms, the severity varying depending on location. Electricity was cut off in many parts of the north, including at the silicon smelter at Bakki. Initially the electricity supply was disrupted for about eight hours before being reconnected. However, other than news of the supply problem (which appears to have come from the electricity transmission company rather than PCC) there was no news of how the lack of electricity was affecting the smelter.

But it must have had an effect of some sort.

Then yesterday the electricity was disrupted again, allegedly because of “load” on the system. On their Facebook page, PCC said (in a translation from Icelandic):

Due to a breakdown in the Landsnet electricity substation, there is no power to the furnaces at the moment. The emergency chimneys are open, the furnaces are cooling down and thus people could become aware of odours. This breakdown is a result of the stormy weather that went over the country earlier in the week. Great emphasis is put on repairing the damage and we expect them to finish as soon as possible. We will look at the events of the last few days in more detail and report on them next week.

Is it not probable that the same thing happened on Tuesday, i.e. that the furnaces started to cool down and emit odours?

Note that the smelter also suffered problems in late November, when both furnaces were out of action for a while. Did odours occur then too? Quite probably.

This blog will be updated.

Iceland’s PCC silicon smelter in search of extra funds

The PCC silicon smelter at Bakki, North Iceland, is asking its owners and other investors, such as pension funds, for up to 5 billion kronur (almost $US 40 million) to provide a firmer base for its operations. The majority of the money is expected to come from the holding company of the PCC Group, PCC SE, which has an 86.5% share in the Bakki smelter. Pension funds currently have a 13.5% share in the silicon smelter. PCC SE already provided extra funds last year in the form of a shareholder loan, totalling $US 34 million.

Although PCC SE proudly states: “In the north of Iceland we have constructed one of the world’s most advanced and most environmentally compatible facilities for silicon metal production which was commissioned in 2018”, it has in fact suffered innumerable problems and has frequently, if not usually, operated at reduced capacity due to various problems.

Just this week, the first furnace had to be switched off due to a leak in the cooling system, which led to melting of part of the electrode (þrýstiklemma in Icelandic).  A new part has to be ordered. Note that the PCC website gives very little information about the plant’s problems.

Besides operating problems, the market price of silicon metal has been decreasing recently.

News of PCC’s financial problems must surely make it harder for Stakksberg to sell the former United Silicon plant in Helguvik, Southwest Iceland.

Update 22 September: They say that they have been running at much lower capacity for the last few weeks, and are only producing about 35 tonnes a day instead of 90. It also turns out that there was a second accident involving a “gun” last month, though this was not reported at the time.

 

 

Iceland’s silicon metal industry still having problems

PCC Bakki Silicon mentioned on their Facebook page recently that although their first furnace was operating smoothly for considerable time (which I doubt is the case), furnace no. 2 was still causing them problems. “Now”, they say, the cooling system is leaking water and they have to open the emergency chimney again. The plant is causing endless problems, like the first silicon plant at Helguvik that was eventually closed down after nine months of operation.

In response to the leak, one person – obviously a member of ASH, the group opposed to the silicon smelter in Helguvik  – commented: “Helguvik all over again.”

The Bakki smelter is supposedly using BAT,  Best Available Technology, or Best Available Techniques, which sounds reassuring but is just a bluff that doesn’t mean anything.

Engineering-related problems are not their only worries. There was another small fire this morning at the plant, in the same place as the first fire.

They are also about to get their third CEO since the plant started operation about a year ago. Ostensibly, CEO no. 2 wants to move down south again for personal reasons.

In response to a question I asked  at a public meeting last year, organized by the company Stakksberg that is currently seeing to the “refurbishment” of the Helguvik plant, the Stakksberg director, Thordur Olafur Thordarson,  admitted that he did not know about the problems that PCC was having.

Stakksberg is a daughter company of Arion Bank, set up specifically to see to the Helguvik smelter, and has been trying to sell the former United Silicon plant for many months. Originally, Arion Bank said that they had a number of prospective buyers, but they obviously haven’t succeeded yet – and with all the countless problems that PCC is having, I can’t see any company wanting to take it on.

Indeed, even though Stakksberg never intended to run the Helguvik plant themselves, their website now says:

Stakksberg owns a plant in Helguvik, which produces 99% pure silicon (Si) and has a production capacity of 23,000 tonnes per year. The silicon is used, among other things, to manufacture solar cells and computer circuits. Some 70 persons will be employed at Stakksberg’s plant in Helguvik when the plant starts its operation.

Note the use of the present tense (produces, is used) and the use of the words “Stakksberg’s plant”. The website makes no mention of trying to sell the plant. Stakksberg say they hope to start the Helguvik plant up in the last quarter of 2020.

That won’t be popular.

 

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.

 

 

PCC silicon smelter at Bakki no better than United Silicon’s smelter at Helguvik

The Icelandic media have gradually woken up to the fact that the silicon smelter  operated by PCC at Bakki in North Iceland is little better than Iceland’s first silicon smelter at Helguvik, owned by United Silicon, which was closed down by the Environment Agency on September 1 last year after about nine months of operation. Initially, the lack of media attention indicated that everything was going to plan, when in fact this was not the case at all.

Besides having to switch the first furnace at Bakki on and off a number of times, with accompanying odour problems, when it was finally brought into operation after a delay of over four months, there was a fire at Bakki in July and ongoing problems with the start-up of the second furnace. Bogi, which apparently still hasn’t become fully functional (United Silicon were never allowed to start up a second furnace because of the problems with the first one).

Then last month there was an accident to one of the workers, when he was using a “gun” to open part of the furnace and the bullet rebound to hit him on his arm.

The trade union for the plant’s workers, Framsýn, say that staff turnover has been rapid and that many of the new workers come from Estonia. Workers are discontented and relations between management and ordinary workers are strained – probably not helped by the accident.

In mid-September the smelter’s first managing director, Hafsteinn Viktorsson, was replaced by Jokull Gunnarsson, who had previously been in charge of the plant’s production process. The media have complained that it is nigh impossible to contact Gunnarsson.

The company make light of all their problems, glossing over them with words such as “There are many things to think about when starting up a furnace…” “and “Such events can occur…”.

Just as I thought that the ongoing problems at Bakki must make it unlikely that a buyer would be found for the Helguvik smelter, it was reported that many investors had shown interest in buying the Helguvik plant. PCC still don’t have any news in English on their website or their Facebook page, so I don’t know how much the prospective buyers of the Helguvik plant know about the problems encountered by PCC with its “best available technology”.

One item of interest concerning the Helguvik plant is that Stakksberg – the company set up by Arion Bank to sell the smelter – has been working with the local Reykjanesbaer council to change the district land-use plans because two of the smelter’s buildings are too high. One would have expected that the smelter’s buildings would have been adapted to the plans….

Update, 23 October: They STILL haven’t managed to get the second furnace to work.

Update, 10 November: They seem to have got Boga working again.

Second silicon furnace begins operation at PCC Bakki

PCC Bakki Silicon started up their second furnace last night, 1 September (ironically exactly a year from when Iceland’s Environment Agency closed down United Silicon’s  silicon smelter in Helguvik, southwest Iceland). They’ve called it Boga.

PCC’s first furnace was called Birta, and suffered a number of setbacks, most of which I’ve probably blogged about, including a fire. One setback I haven’t yet mentioned happened on August 22, when a computer problem caused the emergency smokestack to open for 15 minutes or so. A lot of smoke was released, and residents of the local town complained of a burning odour that residents near the Helguvik plant would recognise at once. This is not by any means the first time this has happened, as less than a month after Birta was started, it was reported that the emergency smokestack had to be opened four or five times due to various problems, although the problems they encountered were not the ones they expected.

PCC are very keen to gloss over their technical problems and have always tried to maintain a glowing image of the factory.

That said, PCC management have said that local residents might experience a burning odour while the second furnace is being brought into use. It will be interesting to see how many problems are experienced with the second furnace.

Update: They reported on their Facebook page on Saturday that the start-up of Boga was proving more complex than expected. had been problems with the feeding system that had shorted not just the second furnace but also the first one. This had happened about a week earlier. They got the latter (Birta) going soon afterwards but decided that Boga needed more attention, not just with the material feeding system but also with the electrodes, which had broken and cracked too much. They were intending to start up Boga again later that day – with potential odours. Ho hum.

Update: They haven’t got Boga going again. On 21 September they said they realised there were a number of problems with it that needed attention and they’d report again when these were done – which hasn’t happened yet (25 September). Bogi has never reached full capacity.

Update: October 23: They STILL haven’t got Boga to work and they haven’t managed to identify the root of the problem.

Update: November 10: They seem to have got Boga working.

 

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.