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Silicon Manufacturing in Oman
Exploring the future of Silica mining
Dipl. Eng. Lou Parous
Executive Director
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© Viridis.iQ
Brief Introduction
Corporate Focus
Silicon Recycling Technology PV Systems
Silicon and Ferroalloy Manufacturing Solar Manufacturing
Taadeen Oman – Muscat, Dec 1-3rd, 2015

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Engineering & technical support
Services
 Contract technical services for projects
on all parts of the PV value chain from
silicon 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

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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

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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 a key feedstock, it is consumed in
the process of making other industrial end products or consumer goods.

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Lump: 10 x 100 mm
$ 2.5/kg
Powder: 45µm- 425µm
$3.0/kg
Aluminum Sector PV Sector Chemical Sector
Waste Powder: <45µm
$0.50 - 1.3/kg**
Refractory Sector
Process description
Silicon smelting
** Quality of waste impacts price. Western markets have higher waste silicon prices than China due to trade barriers
Milling
Quartz Wood Coal
 ~ Global production: 2.5 million tons/yr
 Aluminum: 1200 kt/a
 Polysilicon (Solar): 500 kts/a
 Chemicals (Silicones): 800 kts/a
 ~ Global demand: 2.5 million tons/yr
 ~ Annual growth in supply/demand: 5%
 Technology is well proven and low risk
 Main drivers for competitive advantage
 Electricity price
 Long term power contract
 Low cost capital
 Middle east has a growing demand based on
Aluminum and Solar manufacturing
 No middle east silicon manufacturer (yet)
Submerged Arc
Electric Furnace

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Silica and the downstream
The potential of Oman
Silica Coal Wood Silica
Lime-
stone
Iron
Ore
Silicon
Metal
FeSil
Dolomite
Magnesium
Solar Silicones Refractories Aluminium Concrete Steel Iron

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Silica for Silicon and Silica for Glass
The potential of Oman
Silica for Silicon Silica for Glass

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 ~ 4.5M tons of quartz has been recorded in
the Saih Hatat region approx 40 kms from
Muscat
 Millions more tons distriubted around Oman
 Reserves are undeveloped and have been
determined to be unsuitable for glass
production
 Top level view shows that quartz might be
suitable for mgSilicon production
 Physical characteristics need to be verified
(thermal stability and crepitation)
 Warrants further investigation as no show
stoppers are foreseen
Source: Maadin Enterprises LLC, googlemaps
Saih
Hatat
Analysis ROM Beneficiated Standard for mgSi
Fe2O3 0.11% <0.005% <0.06%
CaO 0.21% 0.1% <0.08%
Al2O3 0.31% 0.04% <0.20%
TiO2 0.02% <0.06% <0.02%
K2O 0.12% 0.1% <0.08%
MgO 0.02% <0.02%
Quartz in Oman
Quartz is available

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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
SIMAUnited Silicon
“China”

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“Carbon management and security is fundamental due to the impact this raw
material has on the cost and quality of the project. Limited suppliers 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

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Source: Alloy Consult, Viridis.iQ
mgSilicon price levels
Money to be made with silicon?

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Source: Alloy Consult, CRU, Viridis.iQ
mgSilicon western production costs
Margins are attractive

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Source: Alloy Consult, CRU, Viridis.iQ
mgSilicon price levels vs OPEX
Money to be made with silicon
 Western and Chinese producers
have capitalized on silicon
margins
 OPEX bandwidths are well
below ASPs
 Recent Chinese crisis has
pushed China prices lower than
costs ---- but this cannot last for
long
 USA, Canada and EU markets
command high premiums due to
anti dumping trade restrictions
on Chinese silicon

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Production Costs
What are the drivers
 Electricity, depreciation (capex) and raw materials make up the bulk of cost (~80%)
 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 periods. Long term
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

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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 is
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

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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

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CAPEX
High capital costs – Impact on early project life
 Chinese versus Western equipment
 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

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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 - $0.08/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

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Current Trend
Parallel tracks
Existing producers New entrants
 Tier 1 and 2 producers who cannot
expand at their current sites
 Seek new locations with attractive
fundamentals AND
 More importantly… in attractive markets
(USA)
 Have little need for local project sponsor
 Control own supply chain, distribution
channels
 Has knowhow but may not be able to
transfer
 Normally not cash rich
 New players who seek industrial
investment opportunity
 Need to find intrinsic advantage
 Local project sponsor is highly
important if local stakeholders are
needed
 Local offtakes and suppliers can be
developed early on – creates
advantage
 Seek new locations with attractive
 Has no knowhow, but can buy it
 Financing can be tricky

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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…”
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

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Can Oman enter mgSilicon market
What are showstoppers
 Long term electricity prices?
 Low cost capital?
 Access to regional markets?
 Available raw materials?
 Industrial infrastructure?
 National incentives?
 Domestic demand?
“Upgrading mineral quartz deposits in Oman to metallurgical Silicon
can compliment existing manufacturing projects in the region and
increase Oman’s industrial footprint in the Middle East.”

Thank you
Contact details:
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

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Tadeen oman mining oman 2015

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