Breaking down Silica Valley

By Cameron Perks
Published: Thursday, 15 December 2016

Spruce Pine in the US state of North Carolina is the self-styled “silica valley” on which the more famous Silicon Valley of California relies for high purity quartz. Cameron Perks, IM Correspondent, investigates how the supply concentration of HPQ is causing concern and creating opportunities for other producers.

As the second most common mineral in the Earth’s crust after feldspar, quartz has many well-known uses, from window glass, to sandpaper, to cement.

Chemically, quartz is commonly understood as silica, or silicon dioxide (SiO2), but it rarely exists in this pure form. In nature, quartz contains various impurities, the type and amount of which dictate the quartz’s usefulness. 

The most common kind of quartz, which occurs in rock or sand form, is generally between 50% and 98% pure silica. Quartz with a purity of over 99.995% silica (<50ppm of impurities), is known as high purity quartz (HPQ) and is extremely rare in nature. 

It is this highly pure form of silica that has made technologies such as solar photovoltaic (PV) panels and semiconductors possible. 

There are only two consistent producers of commercial quantities of ultra-HPQ, both of which are based in the US. Unimin Corp. a subsidiary of Belgian industrial materials group, Sibelco, is headquartered in Connecticut and The Quartz Corp, a joint venture between Norwegian Crystallites and French industrial minerals company, Imerys, is based in Spruce Pine, North Carolina.

Both Unimin and The Quartz Corp mine from the same deposit in Spruce Pine, a small town which calls itself "Mineral City" and is widely referred to as "silica valley".

In Russia, Russian Quartz LLC also claims to be a substantial supplier of HPQ. In 2013, Japanese conglomerate Sumitomo Corp. purchased a 28.69% equity stake in Russian Quartz for $50m. 

HPQ1  
HPQ largest growing market is in solar photovoltaic
(PV) panels. 

The uses of quartz

Rock quartz is mined and processed into crushed quartz, which is then either used to produce silicon metal, or further processed into quartz powder and quartz sand. The metal is purified into polysilicon metal, which along with sand is used to create semiconductors and solar crucibles.

Polysilicon is melted in a square crucible before being cooled into ingots that make up multicrystalline ingots.

Monocrystalline silicon is produced using the Czochralski Process (CZ), where a small piece of silicon metal is dipped into molten polysilicon contained in a crucible and withdrawn slowly while rotating. The silicon ingots are then cut into 150-220µm-thick wafers.

The cut wafers then undergo final preparation to make PV solar cells, usually in a fully automated production line in a clean room environment. Wires are placed on the cell by screen printing a silver paste onto the wafer and then firing it in a furnace. 

Different etchings and textures, polishing and coatings are applied to improve the optical and electrical characteristics of the cell. One of the anti-reflective coatings is a silicon nitride deposition, which gives the PV cells a blue colour.

Silicon wafers for semiconductors are also made using the CZ process and are then physically and chemically polished to remove microscopic marks, leaving a surface roughness of less than one millionth of a millimetre. The wafer is then ready for etching with a circuit design.

HPQ2  
The Quartz Corp’s Spruce Pine Mine.  
The Quartz Corp. 

HPQ3  
Substitutional and interstitial impurities are known
as extrinsic point defects, as opposed to intrinsic
point defects.
HPQ Materials 


Quartz supply

While the Spruce Pine deposits in North Carolina provide up to 90% of the world’s solar and semiconductor-grade HPQ, due to the confidential nature of the industry, little is known about the area’s mining operations. 

Reiner Haus, managing director at Germany-based Dorfner Anzaplan, has suggested that, excluding China, the size of the international HPQ sand market now stands at 50-100,000 tpa. In October last year, Russia based Kyshtym Mining estimated that the entire global market stood at 65,000 tpa and that it was growing at a rate of 3-5% per year. 

Speaking to IM, The Quartz Corp said it currently has permits to produce 30,000 tpa of HPQ from its plant in Norway, using Spruce Pine and Norwegian quartz.

IM estimates that production from The Quartz Corp’s two processing plants at Spruce Pine is about 40,000 tpa.

There is no production of solar and semiconductor-grade HPQ sand outside the big three producers of Unimin, Quartz Corp (both from Spruce Pine) and Kyshtym Mining (or Russian Quartz). Kyshtym claims to produce around 10,000 tpa from its deposit in the Urals, Russia. 

While little is known about China’s HPQ supply, market sources indicate that the country does not have quartz deposits of the right quality to produce high-end solar and semiconductor-grade HPQ sand reliably and economically. It therefore imports 100% of its requirements from one of the three international producers. 

Jiangsu Pacific Quartz Co. Ltd., located in Donghai, China, claims to produce large quantities of HPQ products suitable for the solar, semiconductor and lighting sectors, all of it manufactured using predominantly imported Unimin HPQ sand. 

According to The Quartz Corp, Donghai is the centre of China’s glass tube manufacturing industry, with 90-95% of the country’s output originating there. It estimates that the production hub requires around 36,500 tpa quartz, including an unspecified amount of HPQ for use in high end applications as well as in high-intensity discharge (HID) lighting. 

The murkiness of the quartz industry has not put off would-be new suppliers, however, with some assuming that behind the secrecy lie significant opportunities.

Chris Karamountzos, CEO of Australia-based Creswick Quartz Ltd states that "while there may be debate as to the size of the market, what is clear is that HPQ is a scarce and strategic mineral that is in ever increasing demand." 

"Customers have encouraged our entry into the HPQ market with the carrot of reasonable volume [orders] and pricing," he added. "They tell us that there is a growing disconnect between the capabilities of established suppliers and the pace of growth in the semiconductor and renewable energy markets."

Ascertaining market prices for HPQ is a difficult task. Part of the problem is the definition of HPQ differs depending on end use specifications. HPQ sand for solar PV-grade CZ crucible manufacture contains less than 30ppm impurities and semiconductor-grade material requires a maximum of 10ppm impurities. Elemental impurities also need to be within certain tolerances.

IM’s sources indicate that while many common forms of quartz sell for anywhere in the $25-250/tonne range, fully beneficiated HPQ (<30ppm impurities) sells for $6,000-25,000/tonne, depending on the application and economic conditions. Solar-grade quartz currently fetches $6,500-$7,000/tonne. 

Sources familiar with the semiconductor market in China have suggested to IM that prices for semiconductor grade quartz can range anywhere from $6,000/tonne to $12,000 /tonne, depending on the contract, buyer, specifications and circumstances.

HPQ4  
Alaskite, on the right, is the Spruce Pine quartz
mined by Unimin to supply 90% of the world’s HPQ
market. On the left is a seemingly purer type of quartz,
from Sugarbag Hill, which HPQ Materials hopes will
have a processing cost advantage.
HPQ Materials 

Producing HPQ

The nature and type of impurities in quartz are critical to the success of processing. They also complicate prospecting for HPQ resources, since visibly clear and seemingly pure quartz can turn out to be useless for high purity applications. 

Natural quartz always has defects. The defects most often scrutinised in HPQ production are structural or substitutional impurities and interstitial impurities. Substitutional impurities occur where a silicon atom has been replaced in the silica molecule itself, whereas interstitial impurities exist between silica molecules and are generally easier to remove. While impurities present the single largest problem for HPQ end-users, novel processing methods are continually being explored to remove them more effectively.

Spruce Pine quartz is naturally extremely low in lattice bound elements, due to the nature of the quartz’s formation. The Quartz Corp is able to purify Spruce Pine quartz to extremely high levels (<20ppm impurities, or 99.998% SiO2) at their purification plant in Drag, Norway.  

Dec2016magazine_Quartz_v2 
 Note: Maximum chemical content values used for each product

Source rock requirements

The factory at Drag has a number of proprietary processes to produce high purity quartz. The first cleaning step is hand sorting. The quartz then undergoes 10-12 mechanised treatment processes, including both wet and dry cleaning.

The purity and grades of quartz vary between deposits, with a range of grades found in different parts of the world (see Table 1).

Jason May, chief technology officer at Australia-based High Purity Quartz Pty Ltd (HPQ Materials), notes that good processing goes a long way towards compensating for imperfect source material. "Interestingly the US source rock – Spruce Pine Alaskite – is the most impure [of the grades shown in Table 1], but can be processed to the highest purities through multiple and floatation processes". May points out that such intensive processing is costly, and that starting with a purer quartz rock can yield significant cost advantages.

HPQ Materials is developing the Sugarbag Hill quartz project in northern Queensland, Australia. The company believes that the natural purity of Sugarbag quartz provides an opportunity for it to enter the HPQ market on a competitive footing.

"Although right now pricing is a secondary consideration to supply security, it’s an added bonus that, once our project is in production, it is likely to be the lowest cost source globally of solar PV and semiconductor-grade HPQ sand, in our estimations," Stuart Jones, HPQ Materials’ CEO, told IM.

End product specifications for HPQ are strict, with at least 99.995% purity required by most entry level, lower grade quartz applications. A silica content of at least 99.997% (<30ppm impurities) is required for high-end applications like CZ crucibles and quartzware machine parts for the solar industry, while the semiconductor industry requires purity of 99.999% (<10ppm impurities). Solar grade HPQ must contain less than 30ppm impurities after processing. If quartz cannot be economically processed to these levels, it cannot be used for high value applications and is only suitable for entry level uses, such as halogen lighting and liquid crystal display (LCD) TV substrates.  

In addition to low impurity levels, semiconductor-grade HPQ must also be low in uranium and thorium content, something that Lita Shon Roy, CEO of US-based electronic materials consultancy Techcet, says is often overlooked. Even the small amount of alpha radiation emitted by these elements in minute concentrations is enough to cause errors in memory devices. 

Dorfner Anzaplan’s Haus suggests that uranium and thorium should be less than 2 parts per billion (ppb) in concentration and below 0.5 ppb in low alpha applications.

Additionally, the chemical make-up of impurities is important and must adhere to strict ppm restrictions on aluminium (Al), iron (Fe), lithium (Li), sodium (Na) and potassium (K).

The size of a quartz deposit and its capacity to produce reliably are also considered by HPQ consumers when choosing a supplier. Chinese, Indian, Madagascan and Brazilian quartz suppliers often struggle to produce consistent volumes and purities of quartz. One reason for their unreliable nature is that these suppliers usually produce quartz from a number of small deposits at a rate of no more than 2,000 tpa. 

To achieve a consistent quality end product, a large volume operation is usually needed to justify the up-front costs, which need to amortise over a relatively long mine life. Quartz from different sources cannot be blended, so using a combination of resources with different chemical signatures requiring different processing tends to be prohibitively expensive.

HPQ6  
Blasting at Spruce Pine.  
The Quartz Corp 

Opportunities and hurdles

Both raw and processed HPQ already command high prices and according to industry sources, the material’s value is increasing as suppliers struggle to keep up with rising demand from high-tech and green energy sectors. 

Techcet’s Shon-Roy told IM that the semiconductor industry is risk averse and often not willing to change suppliers, due to the need to meet stringent specifications.

Few quartz mines globally come up to scratch when it comes to producing semiconductor-grade HPQ – a fact which partly explains why Unimin has been able to effectively corner this market.

But the Spruce Pine deposits, which Unimin has been mining for over 50 years, cannot last forever and it is unclear how much longer these mines have left to run. "While Spruce Pine may have remaining deposits, there is no transparency on how much [they contain], or whether the residual quantities can be processed at the same operating cost," points out HPQ Materials’ May. If Spruce Pine’s ore is declining in quality, May suggests that Unimin may have to increase quartz prices to protect margins.

HPQ Materials’ Jones suggests that information published by HPQ buyers offers a clearer picture of the supply situation.  US-based Momentive Performance Materials, which according to US Securities and Exchange Commission (SEC) filings is a large buyer of Unimin’s HPQ sand, has repeatedly said in its annual 10K forms that Unimin "exercises significant control over quartz sand prices". As a buyer, Momentive said that it faces annual price increases of 3-5% for Unimin quartz.

In its 10K form for the financial year ended 31 December 2015, Momentive said that it procures quartz from other suppliers in addition to Unimin, but warned that "should any of our key suppliers fail to deliver these or other raw materials or intermediate products to us, or no longer supply us, we may be unable to purchase these materials in necessary quantities, which could adversely affect our volumes, or may not be able to purchase them at prices that would allow us to remain competitive." 

The company further highlighted that, in the past, some of its suppliers have experienced force majeure events, which meant they could not fulfill deliveries of contracted-for raw materials. "On these occasions, we were forced to purchase replacement raw materials in the open market at significantly higher costs or place our customers on an allocation of our products." 

"In addition, we cannot predict whether new regulations or restrictions may be imposed in the future," it added.

Jones argues that the risks of HPQ supply concentration are increasingly relevant to the solar PV and semiconductor industries, which invest billions of dollars to expand capacity on the assumption of being able to secure the raw materials they need. 

The Quartz Corp however paints a different picture of the supply situation. The company told IM that it has "enough capacity to produce more than the demands of our customers and our internal demand in Norway".

"Global production capacity for HPQ sand is more than twice the foreseeable market demand," The Quartz Corp added, pointing to recent plant expansions and modernisations by the main producers.

HPQ7  
Quartz Corp.’s drag mineral separation process in
action.  
Quartz Corp. 


Demand drivers

Solar

The solar industry has played a big part in HPQ demand in the last decade and its role is set to grow as new large and innovative solar investments are announced. US electric vehicle maker, Tesla Motors Inc., this year announced its intention to acquire Californian solar energy producer, SolarCity Corp., for $2.6bn. Tesla said the buyout would allow it to achieve lower hardware and marketing costs and boost manufacturing efficiency, creating the "world’s only vertically integrated sustainable energy company".

The cost of installing solar is also going down. Anglo-Australian mining giant, BHP Billiton Ltd, recently stated that, "on average, wind and solar energy are expected to reach cost-parity with incumbent technologies on a new-build, unsubsidised basis in about a decade".

In some areas, such as Mexico, solar is already at cost parity with conventional energy generation. In a recent online article, The Quartz Corp stated that lower solar PV module prices will impact the cost of energy and potentially lead to increased investment in solar installations, both large and small. 

The company added that lower prices of installation could benefit suppliers of monocrystalline panels, which require slightly higher purity quartz than poly- or multicrystalline panels. "Countries where balance of system costs [all costs except the PV panels] are higher, such as Japan and Australia, are more likely to use high efficiency monocrystalline modules, as fewer units are required to generate the same number of kilowatt hours (kWh) [than for [polycrystalline technologies]," the company said. 

Speaking to IM, The Quartz Corp. said that the solar market is shifting towards higher efficiency products, which is broadly good news for HPQ demand. "However, manufacturing improvements mean that the amount of quartz used per panel is dramatically reducing," it added.

Semiconductors

According to a report by Zack’s Equity Research earlier this year, the biggest driver of semiconductor growth today is the increased use of cloud computing, which relies on dense, energy efficient data centres. 

The Semiconductor Industry Association (SIA) however expects semiconductor sales to decline 2.4% this year, following a flat 2015.

According to The Quartz Corp., the semiconductor market is "cyclical". "Currently, the market is following global GDP trends, and is likely to continue to do so in the future. Growth in the Chinese semiconductor market will help drive demand for new production facilities, creating new opportunities for HPQ applications," the company told IM.

Addressing concerns over the potential replacement of silicon by other materials in semiconductors, The Quartz Corp in a recent blog post said that "silicon is forecast to remain the main material used in semiconductors, due in no small part to the cheaper cost and mature manufacturing technology."

"While new, smaller architectures may require non-Si products, it is very unlikely that the market will replace silicon use in the near to midterm future," it added.

HPQ8
Poly/multicrystalline versus monocrystalline solar panels. Both types of panel
serve the same function in the overall solar PV system. Mono panels are
typically more expensive, but are more efficient than poly panels.
EnergySage.com 

Emerging quartz producers

Thanks to the lowering of costs in technologies such as solar PV and renewed interest in high-tech and green energy applications generally, budding HPQ producers may have an easier time finding funding and customers for their projects.

Due to their proximity to growing Asian markets, Australian and New Zealand quartz deposits are particularly well placed for development.

Creswick Quartz’s Karamountzos told IM that, after years navigating the Chinese market, Creswick is now the country’s only exporter of HPQ for semiconductor manufacturing. 

The company’s quartz deposits in the Australian state of Victoria contain underground resources totalling "billions of tonnes", according to Crewick, as well around 3m tonnes above ground from old mine tailings left over from previous operations at the sites.

"Our quartz has been proven by an extensive investigation, conducted both locally with Australia’s Commonwealth Scientific and Industrial Research Organization (CSIRO), with our customers and with prospective end-users," Karamountzos told IM.

"We have taken a markedly different approach to established suppliers in that we send our quartz to our customers in China for refining, thereby taking advantage of refining expertise and of course lower production costs". 

Creswick claims that, once processed, its quartz has a purity equivalent to, or higher than, Unimin’s Iota-6 material. This makes it suitable for the most stringently quality-controlled HPQ applications, including monocrystalline silicon.  

"Our quartz has already entered the HPQ market," Karamountzos told IM. "We expect this will become the most exciting part of our business for as long as the world has computers."

Meanwhile, HPQ Materials, which is also based in Victoria, is in the latter stages of investment, with plans to start producing HPQ sand in 2017. 

The company is already accepting pre-sales orders for its high purity and solar-grade sand, with its first three years of production already booked – setting it apart from some of its Australian rivals, which have achieved low grade, low-priced sales to Chinese producers, according to May.

HPQ Materials aims to become the first Australian company to manufacture solar PV and semiconductor-grade HPQ sand within Australia and is also exploring opportunities to manufacture CZ crucibles for export. 

With five tenements covering 771 square kilometres around Mt Isa in Queensland, Australia, Nova Strategic Minerals also hopes to begin supplying quartz to the Asia Pacific high purity quartz market.

Nova’s Director Mark Struthers spoke with IM, confirming that they are targeting strong growth prospects particularly in the Asia Pacific, driven primarily by the semiconductor market.

The tenements, which could contain around two million tonnes of quartz, have been sampled and analysed. Raw samples, drill core samples, as well as rock chip samples have returned a "consistant" >99.95% SiO2 minimum result (<500ppm other elements (<0.05%)).

The company has also successfully upgraded some of its 99.98%SiO2 quartz to 99.99%SiO2 in an effort to understand whether or not their quartz is suitable for processing. The company added that both boron and phosphorous were below 1ppm during the trials.

With encouraging results, as well as a potentially large resource, the company hopes to find a suitably qualified partner who can add strategic and financial value to the project. 

ASX-listed Rum Jungle Resources Ltd likewise claims that its Dingo Hole silica project in the Northern Territory could be a potential contender in the HPQ supply market, although an announcement to the ASX in October last year stated that chemical analyses of selected chip samples were inconclusive in determining whether Dingo Hole ore is suitable for HPQ applications. 

In New Zealand, silica deposits in the Hokonui Hills in South Island’s Southland region have sparked interest following research undertaken by the Norwegian Foundation for Scientific and Industrial Research. 

The results of the foundation’s investigations in this area indicate that Southland silica may be suitable for electronic and solar-grade applications. One company looking to develop the resources is Nomad Mining Ltd, which is currently at an early stage of exploration but aims to ultimately develop a silica refinery and subsequent quartz export business in New Zealand.

Silica and silicon

Silica should not be confused with silicon metal (Si), made from lower grade silica ore. 

Silicon metal is also used in the PV solar industry, as polysilicon metal to make PV cells.

To make polysilicon metal (>99.99999% purity), silica is first turned into 98-99.99% silicon metal by removing oxygen in a furnace.

Unimin’s Iota quartz

Unimin’s Iota quartz is the industry benchmark and product of choice for semiconductor production as it exhibits properties that make it ideal for the manufacture of fused quartz crucibles used in the CZ process. 

Unimin’s purest grade, Iota-8, is 99.9992% SiO2, containing only 80ppb of impurities


Editor's note: Please note that Table 2 & 3 in this article was updated on 4 January to include The Quartz Corp's NC1-CG product (instead of Norwegian Crystallites NC-1CG product). 

The %SIO2 figure for the USA in Table 1 was also corrected to 96.877%.