This document discusses understanding the basics of greenfield silicon manufacturing projects. It provides an overview of Viridis.iQ, a company that offers engineering and technical support services for projects across the photovoltaics value chain, including silicon and ferroalloy manufacturing. It then examines some of the key factors that new entrants to greenfield silicon projects should consider, such as carbon sourcing, electricity pricing, capital expenditures, and the importance of experienced operations expertise.

1. Greenfield Metallurgical
Silicon Manufacturing
Understanding the basics of greenfield
silicon projects
Dipl. Eng. Lou Parous
Executive Director
Dipl. Eng. Lou Parous
Executive Director
phone +49 7531 698 4628
mobile +49 175 727 3943
lou.parous@viridis-iq.de
Register Office: Freiburg - Commercial
Register No. HRB 708759 Managing Director:
Louis C. Parous III, Dr. Wolfgang Herbst

2. 2Company Overview© Viridis.iQ
Brief Introduction
Corporate Focus
Recycling Technology PV Systems
Silicon and Ferroalloy Manufacturing Solar Manufacturing

3. 3Company Overview© Viridis.iQ
Engineering & technical support
Services
▪ Contract technical services for projects
on all parts of the PV value chain from
metallurgy to PV modules
▪ Technical and engineering knowhow
available to Project Owner
▪ Eye level technical powerhouse with
experience in international projects
▪ Multi discipline and cross industry
technical resource
▪ In house engineers, chemists &
physicists lead projects in all technical
aspects through planning & execution
phase
▪ Operator perspective with focus on
lean manufacturing & value creation
Engineering services
Operations and Knowhow
Independent technology audits
Equipment and materials
Project Management
Process Optimization
Owner and Lender Engineers

4. 4Company Overview© Viridis.iQ
UAE
▪ Engineering
support for
Silicon
Malaysia
▪ Operations
Support for
Silicon
Russia
▪ Solar Cell and
Module
Manufacturing
Canada
▪ PEA/Engineering
for Ferrosilicon
plant
Iceland
▪ Engineering, and
operations support
for Silicon
Oman
▪ Studies and
planning for
Ferrochrome
KSA
▪ Studies and
support for
Silicon and PV
manufacturing
Chile
▪ Engineering
studies for Solar
Systems
Brasil
▪ Engineering
studies for
Silicon and PV
manufacturing
Venezuela
▪ Engineering
studies for PV
manufacturing
Cuba
▪ Engineering
studies for PV
manufacturing
USA
▪ Engineering for
PV systems
installations
Algeria
▪ Engineering
studies for
Silicon and PV
manufacturing
Trindidad
▪ Engineering
studies for
Silicon and PV
manufacturing
Korea
▪ Technical
Support for
Silicon
China
▪ Engineering
audit for
Silicon
Greece
▪ Studies for PV
manufacturing
Experience
Project Experience across ~ 20 countries
Germany
▪ Engineering
support for PV
manufacturing

5. 5Company Overview© Viridis.iQ
Chemicals
▪ Silicones for plastics, paints,medical
applications, cookware, and insulation
▪ Silicon is consumed in the chemical
process and derivitives of silicon are
further processed
▪ Wells established industry that is
expanding in the emerging markets as
consumer goods consumption rises
▪ Approx 2 kgs of silicon are needed for
1 kg of Silicones
Aluminium
▪ Used as an alloying element to
alumium for improved properties
▪ Used in both primary and secondard
alumium industry
▪ Increasing use of alumimum – silicon
alloys is pushing higher demand of
silicon
▪ Typically up to 12% silicon is used in
cast aluminum alloys
.
Electronics and Photovoltaics
▪ Key raw material for production of
polysilicon
▪ Consumed in process
▪ 1.2 to 1.4 kgs are needed for 1 kg
of polysilicon
▪ Large cost componant of
polysilicon production
▪ High consistancy in quality
requirements
Sectors and Drivers
End Markets for mgSilicon
Metallurgical Silicon is used in a diverse number of industries. As an feedstock, its is normally
consumed in the process of making other industrial end products or consumer goods.

6. 6Company Overview© Viridis.iQ
mgSilicon Greenfield Growth
Do all these projects have strong fundamentals?
New Silicon Plants (planned or being studied)
PCC Islandic Silicon
FerroAtlantica
Mississippi
Silicon
Saudi Silicon
“Oman”
SIMA
“Trinidad”
ThorSil United Silicon
“China”

7. 7Company Overview© Viridis.iQ
“Carbon management and security is fundamental to due to the impact this raw
material has on the cost and quality of the project. Limited supplier of low ash
coal and the volatility of this commodity can introduce significant risk to the
project.”
Carbon
Critical Impacts
Examples of key factors for new entrants
“Over-engineering, over-buying and excessive focus on turnkey offers can
impede financial performance of the project for many years. Equally, purchasing
substandard equipment can result in permanent operational problems for the life
of the project and reduce overall project value as well as operational margins.
CAPEX
“A team of operations experts is needed in all project phases to foresee risks,
support engineering and planning, prepare mitigation strategies, design processes
and transfer knowhow to project owner operators. Lack of experienced operations
personnel is largest risk to new projects.”
Operations
“Long term power contracts designed for silicon operations are required.
Understanding the operations boundary conditions of a particular site or country
is crucial to design the correct contractual conditions that will not impede future
operations or affect costs”
Power

8. 8Company Overview© Viridis.iQ
Production Costs
What are the drivers
▪ Electricity, depreciation (capex) and raw materials make up the bulk of cost (~50%)
▪ Coal is largest raw material cost and
represents a strategic risk which can be
mitigated by vertical integration to coal
mining or charcoal production
▪ Electricity prices have to be advantageous
for long term. Long term or incentivized
power structure is needed to offset
depreciation and provide long term fixed
cost
▪ Smart design and informed procurement can avoid over engineering while minimizing
project and capital risks. Turn key offers are not always the best option and can bring
legacy costs.
▪ Experienced start up operations teams reduce learning curves and assist in factory
planning, engineering and process design to mitigate over design and higher than
needed CAPEX; as well reduce electricity demand by improving KWh/ton ratios and
electrode and reductant consumption
Hypothetical Silicon Smelter – early years, all in costs

9. 9Company Overview© Viridis.iQ
Carbon Source
A strategic issue
▪ Aside from electricity, Carbon is the 2nd
highest cost factor for mgSi producers
but as same impact on financials as
Quartz
▪ Most greenfield plants depend on less
than 5 carbon suppliers
▪ Carbon source is not the same as
carbon suppliers as coal for Silicon has
to be washed ---------- limited facilities
for washed coal
▪ Experienced mgSi producers have
developed their own carbon sources and
sell to their competitors, effectively
influencing the competition cost structure

10. 10Company Overview© Viridis.iQ
source: viridis.iq, Kevin Fowkes (Alloy Consult)
Carbon Impact
How carbon prices affect ASPs for Silicon

11. 11Company Overview© Viridis.iQ
Electricity prices
Energy is not the make or break it used to be – but still critical
▪ Power costs can heavily influence
profitability
Many new projects underestimate the
complexity of power costs on their
operations
▪ Long term (10-15 years) power prices are
crucial to new projects
Long term fixed power prices are
required. Serious projects commit to
power contracts early in project
development
▪ Local power environment must be considered in power contracts
Interruptions, flex tariffs, peak hours, etc. need to be understood from the
operations perspective
▪ Power is not always the only driving force on OPEX (see graph)
Some high power regions have lower OPEX – mitigating factors off set OPEX

12. 12Company Overview© Viridis.iQ
CAPEX
High capital costs – Impact on early project life
▪ Chinese versus Western equipment
▪ Some good Chinese equipment
providers.
▪ Turn Key versus Project Integration
▪ Warning – “Over” engineering” can
cost you in operational cost as much
as “Under” engineering”
▪ Don’t assume highest cost means
highest quality – proper design is the
critical issue
▪ Equipment suppliers tend to
promote financing as a way to lure
customers…then the trap occurs
with upgrades and other tactics
▪ Guarantees - a double edged sword
that limits the input of the project
owner

13. 13Company Overview© Viridis.iQ
Malaysia
• Import duty, sales, and excise tax exemptions
• Pioneer Status
• 5 year tax holiday
• Losses can be carried forward past holiday period
• Investment Tax Allowance
• 60% of qualifying capital expenses counted as an
allowance to reduce taxable income
• 5 year period
• Favorable land rates
• Favorable energy rates (~$0.40/kwH)
Saudi Arabia
• Low cost energy (~$0.020/kwH)
• Free land
• No income tax
• 51% Saudi ownership required
• Interest free SIDF loans for up to 50% of the fixed assets, pre-
operating expenses and start-up working capital.
• Loans are provided for a maximum term of 15 years with the
repayment schedule designed to match the projected cash
flow of the borrowing projects.
• 25% minimum equity for project owner
Iceland
• Duty free imports for materials
• VAT deferral
• Partial depreciation allowed
• Direct Cash grants allowed in some cases
• Favorable land leases – below market prices
• Fixed ceiling on the rate of income tax for 10 years (i.e.2%
reduction)
• Security clauses in terms of new taxation
• Stamp duties and municipal property tax reduced
• 50% reduction on general social security charges
• Training budget from state
UAE
• Industrial free zone (no import taxes or duties)
• Industrial port
• No income tax
• Discounted energy price (~$0.040/kwH)
• Discounted water price (~$0.003/gallon)
• Provision of high-quality infrastructure and services including
power, water and sewage, gas, waste disposal and
telecommunications.
CAPEX Reduction
Enticements and Incentives

14. 14Company Overview© Viridis.iQ
Operations Experience
Critical risks to new projects
❑ Current trends for greenfield expansion in Silicon
❑ Tier 1 or Tier 2 producers which have in house expertise and manpower
❑ New entrants which depend on technology providers and one-man consultants
❑ Technology providers do not operate silicon factories!
Result is that new silicon projects will not all be on the same footing in regards to
quality, consistency, project timing, profitability, flexibility and technical acuity
LevelofTechnicalandOperations
ExperienceintheProjectTeam
Tier 1,2
projects
New
entrants
• New entrant Greenfield projects need
specialized teams of silicon operations
experts to support project owners
• ….to provide a counterbalance to
technology provider, and
• ….to ensure smooth project start up and
product quality targets,
• ….as well as increase the flexibility of the
factory to meet new market demands for the
PV, Aluminum and Chemical sectors
Level of Project Risk

15. 15Company Overview© Viridis.iQ
What is important?
Where most projects go wrong
Typical Myths of project sponsors
▪ Myth: “…we can do it with a small team and a couple of “one man
show” consultants…”
▪ Fact: No, you cant. You must have a project management team in the
early stages that has direct experience in both equipment and operations.
This can normally only be done with significant outside help.
▪ Myth:…we don’t need any help until after we sign the EPC and
Equipment contract…”
▪ Fact: These contracts can have long lasting implications on the profitability
of the project many years after the equipment supplier has left the site. If
you wait to get operations experience until after these contracts are
signed, you have made a mistake before you even start
▪ Myth: “...we are buying a turn key package so we don’t have to worry
because we have guarantees”
▪ Fact: The guarantees are related to specific performance metrics that can
be measured and evaluated over a short time. These have nothing to do
with the long term viability of the factory.
Others Myths:
▪ “… we can sell this project to a Tier 1 operator…”
▪ “…the equipment supplier knows best…”
▪ “…we can worry about operations later…”
▪ “…we have the best raw materials…”
▪ “…our off takers want more than we can produce…”
Strong
Project
Sponsor
Location &
Access to
Market
Incentivized
Power Costs
Solid Off
Takers
Reliable
Equipment
Experienced
Operations &
Knowhow
Transfer
Long Term
Finance
Dependable
and Trainable
Labor force
Focused PM
Integration
team
Experienced
LOCAL EPC
NeededCriticalImportant
Ranking of critical project aspects
Strong regional
market
Raw Materials

16. Thank you
Contact details:
Dipl. Eng. Lou Parous
Executive Director
phone +49 7531 698 4628
mobile +49 175 727 3943
lou.parous@viridis-iq.de
Register Office: Freiburg - Commercial
Register No. HRB 708759 Managing Director:
Louis C. Parous III, Dr. Wolfgang Herbst