PCC SE has invested approx. 265 million euros in the plant.

PCC BakkiSilicon

Construction of silicon metal production plant in Iceland

PCC SE has invested approx. 265 million euros in the plant.

The location of Húsavík (»cove with houses«) with its 2,200 inhabitants may only be known to some Iceland insiders in Germany. Yet now, one of the most modern and environmentally‑friendly silicon metal production plants in the world has been built at this picturesque fishing town, with legal support from Leinemann Partner. The plant which will be important for the supply of raw materials to Germany entered into service at the end of April 2018.

The holding PCC SE with headquarters in Duisburg has invested approximately 265 million euros in the plant. The production plant was built by the group subsidiary PCC BakkiSilicon hf, Húsavík, the operator of the plant. Silicon metal is used as a raw material for photovoltaic modules and also in the chemicals and aluminium industry, for example as a high-strength aluminium alloy used in the automotive industry. The requirement in Germany alone is estimated to be 300,000 tonnes per year. The biggest producer of silicon metal by a long way is China. The 32,000 tonnes from the silicon melt in Iceland will mainly be destined for companies in Germany.

Why choose a production location on an island way out in the Atlantic ocean? The answer to this question lies in Poland where to the south of Warsaw PCC extracts quartzite in its own quarry. Silicon is then produced from the quartzite in Iceland. In Poland the rock is transported by freight train to the port at Stettin and then taken by ship directly to the ice-free port of Húsavík, a sea route of more than 3,000 kilometres. Then why not have a silicon melt directly on site in Poland? The main reason for this is the low-cost and environmental‑friendly supply of energy in Iceland. Almost all of the power requirements in Iceland are covered by renewable energy sources such as geothermal or hydroelectric power, and it was even possible to build a power station in the locality of the plant. As the production of silicon requires a particularly high amount of power, this proved to be a decisive advantage.

»But the whole package was just right«, says Dr. Peter Wenzel, chairman of the supervisory board of PCC BakkiSilicon hf. The local population, the administration of the city of Húsavík and the Icelandic government supported the project right from the beginning. This helped to realise 125 new jobs in the north of the island which welcomes the economic development. The arrangement of the plant in the form of a terrace and a special colour scheme helps to create a harmonious overall image in the countryside.

The decision of who PCC should take for legal support was not too difficult. Leinemann Partner has long-standing expertise in the field of German and international plant construction, with FIDIC/EPC turnkey contracts and the associated, typical arbitration mechanisms. The legal support was provided exclusively in English, including successful arbitration proceedings. As Dr. Peter Wenzel put it: «The enormous experience of the lawyers Andreas Jacob and Prof. Dr. Ralf Leinemann at the Berlin office was a great help in enabling a smooth realisation of the project.«