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Globe Specialty Metals to build 40,000 MT silicon metal plant in Iceland

Last updated: 10:38 17 Feb 2011 EST, First published: 11:38 17 Feb 2011 EST

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Globe Specialty Metals (NASDAQ:GSM), a producer of silicon metal, said Thursday it will build a 40,000 megatonne silicon metal plant in Iceland to meet increased silicon demand. 


The plant, Globe said, is expected to be the lowest cost silicon metal plant in Europe.


Globe will own 85% of the plant and operate it while Tomahawk Development Company, its minority partner, will own the remaining 15%.


The plant, which will cost about €115 million, will be financed with €78 million of limited-recourse financing from two banks, about €34 million from Globe, and €2 million from Tomahawk. 


All of the operating and environmental permits required to build and operate the plant have already been obtained, Globe said.  The two companies have also secured for the plant 66 MW of fixed cost power for 18 years. 


Construction of the plant is expected to begin sometime this summer.  The plant is scheduled to be operational by the middle of 2013. 


As of 11:25 am EST, Globe’s shares are up 7% to trade at $22.23.

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