Timminco Limited (“Timminco”) (TSX:TIM) announced today that its wholly-owned subsidiary, Bécancour Silicon Inc. (“Bécancour Silicon”), has signed a new, long-term silicon metal supply contract with one of its long-standing silicon metal customers. This new contract, which replaces all previous commitments with this customer for the years 2011 to 2014, provides for revised pricing retroactive to January 1, 2011 and extends the supply commitments through to the end of 2015.
“The contract amendment with this long-standing customer will provide additional liquidity to Bécancour Silicon in the near term through higher pricing,” said Mr. John Fenger, President and Chief Operating Officer of Timminco.
The base quantity of silicon metal to be delivered under the new contract is 17,500 metric tons (mt) per year from 2011 through 2015, plus an additional quantity of approximately 8,000 mt to be delivered by the end of 2013, for a total volume of 95,500 mt over the five-year term. The previous contract had a total volume of 94,500 over its five-year term from 2010 to 2014. The volumes under the new contract, together with Bécancour Silicon’s commitments to other silicon metal customers, represent substantially all of Bécancour Silicon’s anticipated allocation of up to 51% of the silicon metal output from the Québec Silicon production partnership between Bécancour Silicon and Dow Corning for at least the next three years, based on Québec Silicon’s existing production capacity and commitments under its output and supply contract with Bécancour Silicon and Dow Corning.
The prices under the new contract are fixed for 2011 and are subject to negotiation within a defined price range for each of the remaining four years, as was the case under the previous supply commitments. However, under the new contract, the fixed prices for 2011 have increased and, in exchange, the upper limits of the defined price range for negotiations for the years 2012 through 2014 have been reduced, relative to the previous commitments. The price range for negotiations in respect of 2015 will be based on a percentage spread above and below the actual pricing for silicon metal deliveries in 2014. All pricing under the new contract is in Euros, and is subject to the currency adjustment clause from the previous contract.
Read the full news release here.