Make REC Great Again!

Sila has announced the official start of operations at their new silicon anode plant in Moses Lake – press release.

REC Silicon and Sila has a long-term silane supply agreement, communicated to the market in a stock exchange notice on September 19, 2024. REC’s management has so far declined to disclose expected supply volumes, other than confirming that deliveries will come from Butte. Notably, REC has also not informed the market about the milestone that the opening of Sila’s plant represents.

In its press release, Sila states: “Operations will initially support 2–5 GWh of capacity, with the capability to expand up to 250 GWh within five years, becoming the largest anode production facility in the world.”

A capacity of 250 GWh would likely require most, if not all, of REC’s entire silane output from Moses Lake, previously communicated as 24 000 mt per year.

In a video of the opening ceremony, this target is reiterated, though set slightly lower at “more than 200 GWh”.

These capacities are significantly up from previously stated ambitions of a capacity of 150 GWh.

While Sila does not explicitly mention REC in its press releases, the supply agreement is frequently referenced in communications with U.S. government agencies – for example, in this letter to the Bureau of Industry and Security (BIS).

Back in January 2021, Finansavisen reported (behind paywall) that REC could gain a “flagship customer” in the U.S, with reference to Sila. Nearly five years later, that prospect now appears to become reality.

These developments raise further questions about Hanwha’s (attempted) takeover of REC.

• What does Hanwha know that hasn’t been communicated to the market? Are there any agreements between Hanwha and Sila?
• Is Sila’s lofty ambitions the reason an agreement with G14 (and other anode materials producers) has not materialized? In effect, has G14 been shut out, thus being forced to build their own silane plant?
• A sold-out silane capacity at Moses Lake represents an expected EBITDA in the hundreds of millions of USD. Hanwha knows this, yet still tries to lowball other shareholders with an offer of NOK 2,20/share.