Silicon, a component in a range of common consumer products, was identified earlier this year by Canada and last week by the US as a material critical to supply chain security for clean energy transition technologies.  

The US’ newly amended Critical Mineral Consistency Act modifies the Energy Act of 2020 to expand the definition of critical minerals to include critical materials designated by the Department of Energy, and now includes copper, electrical steel, silicon and silicon carbide.

This summer, silicon was named by the Biden administration in an initiative to provide up to $400 million to usher in a new era of semiconductor manufacturing, and on Wednesday, the administration finalized Chips Act incentives, awarding chipmaker GlobalFoundries $1.5 billion in grants to support US factories as part of a broader semiconductor push.

Silicon metal is critical in semiconductors and photovoltaic cells, and there is electric battery technology emerging with silicon as an anode component.  

Could silicon replace graphite in battery anodes?

Silicon can hold 10 times as many lithium ions by weight as graphite, but developing the battery technology to scale sustainably has met its share of challenges. 

As with many other metals critical to clean energy technologies, there is a projected near short term boost in demand for silicon– from 3.27 million tons in 2024 to 4.25 million tons in 2029 – a 5.4% CAGR increase.   

Ferroglobe (NASDAQ: GSM) produces silicon products for new technologies with operations in eight states and plans to expand its production capacity.

The company’s US operations. Source: Ferroglobe

Ferroglobe’s vice president of US corporate affairs, Bill Hightower, is concerned about the US’ ability to meet impending production demand increases, while having to rely on China, which controls over 70%  of the world’s production. 

Hightower, a former Alabama senator and congressional candidate, points out the advantage to the US implementing  industrial policy on silicon metal. 

China notoriously overproduces metals, subsequently flooding emerging markets with cheaper products.  In an investigation on Silicon Metal from China, last year, the US International Trade Commission determined the “revocation of the antidumping duty order on silicon metal from China would be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time.” 

Tax policy  

“If these countries are naming critical materials like silicon metal, then we can develop policy around it,” Hightower told MINING.com in an interview.  

“If [China] makes 70% of the world’s [supply], all they’ve got to do is dump it in another region, and it has an ultimate effect upon America and other markets. If China sneezes, the whole world feels it when it comes to silicon metal and other products. Graphite was the big scare last year.” 

The former politician turned resource company executive recently authored an Op-ed on the critical role of silicon metal production in the US energy sector. 

“All throughout my career, I’ve been very aware of what’s going on in Washington D.C…I’ve been through the cycle…where there was tremendous offshoring,” Hightower said. “We were looking for the lowest cost producer. It was a global economy. But things are changing.”

Now, there’s an emphasis on reshoring or nearshoring. And we have to get on with it because the current suppliers of the product, if they decided to cut us off, we’d be in a lot of trouble.”

Coreshell development partnership 

Ferroglobe has forged a partnership with Coreshell, a company Hightower said has “broken the code” on displacing graphite in batteries, which could substantially reduce the cost.

The company acknowledges that metallurgical silicon anodes tend to swell and degrade quickly, but says its technology solves this problem. On its website, Coreshell states its technology acts both as an artificial SEI (solid electrolyte interphase) and as an encapsulant – reinforcing metallurgical silicon anodes during charge and discharge – while preventing surface degradation. 

“Coreshell has a number of tests underway. They’ve determined how they can now displace 100% of the graphite, [and] introduce silicon. And as a result, the battery charges 30% faster. It goes 20%  longer,” Hightower said.

Hightower said the process lessens the incident of fire in the battery and new technologies will reduce the cost of electric vehicle ownership.

“Our theory is that the market for electric vehicles is kind of a high-priced market, and it’s been fully penetrated. The only way to expand and sell more is to drop the price. A battery is a third of the car’s cost. We have a development agreement and we’re working with auto manufacturers to define the next technology in batteries.”

“With the battery technology, with photovoltaic, with chips all being reshored, demand for silicon metal is going to really ratchet up at the end of the decade. And if we don’t build that capacity now, we’re going to find ourselves even more reliant upon imports.”

Hightower said Ferroglobe has permitting underway for additional capacity in the US and West Virginia Representative Carol Miller has introduced a task force to look at tax policy along the supply chains. 

“Certainly, the federal government has a role to play in incentivizing the building of capacity. If we’re not going to have enough capacity in silicon metal,  the US can incentivize companies to start that. They can do it by managing the tariffs. They can also do it by offering tax credits and incentives, as they’ve done with the IRA or the bipartisan infrastructure law.”

A new Trump presidency

President- elect Trump has indicated his support for US domestic manufacturing, and Hightower believes silicon production in the US will benefit from this policy.  

“Silicon metals are used in such a broad range of products, any policy which encourages US-based production products in the automotive, medical, electronics, and energy sectors will be a positive for silicon production in the USA,” he said. 

Hightower notes President Elect Trump will take actions to reduce the cost of energy in the US by investing in lower cost traditional energy sources like oil and natural gas, reopening federal lands for oil and gas, expediting new pipeline and infrastructure projects, incentives for development of clean coal and nuclear power, and EPA action to support fossil/liquid-based fuel producers.  

“As silicon production requires an enormous amount of energy, any actions to reduce the cost of US domestic energy costs will benefit the industry and the consumer,” Hightower said. 

“President Elect Trump has indicated that he will use tariffs and trade policy to strategically achieve US domestic goals, and protect the US from countries who compete unfairly.  To the degree these actions deal with un-competitive behavior such as dumping in the US, it will help the industry.”

Source: MINING.COM – Read More