First Solar (Nasdaq:FSLR) is by far the leading producer of cadmium telluride (CdTe) solar panels (and the leading producer of thin-film solarpanels, for that matter). The firm is the largest solar company bymarket capitalization at $10.37 billion.
First Solar plans on a capacity expansion to 2.9 gigawatts by 2012. That’s a lot of solar panels, a lot of CdTe photovoltaic materials, and a lot of CdTe constituent materials — cadmium and tellurium.
Tellurium is a byproduct of copper mining and there is an ongoingdebate over whether the global tellurium supply can support the growingneeds of the solar industry. Tellurium is also used to improve themachinability of steel and copper, as a component in CD-RW disks and for other semiconductor applications.
Prices for tellurium surged from under $100 per kilogram in 2007 toover $200 per kilogram in 2008, according to Lita Shon-Roy of marketresearch firm Techcet Group. Tellurium prices rose to $235 to $295 per kilogram early this year according to MetalBulletin. It is estimated that thirty percent of the global tellurium supply goes to First Solar — and that proportion is increasing. Rising telluriumprices might spur companies to consider a more active exploration andmining operation, rather than depending on tellurium as a metallurgicalbyproduct.
So, where is First Solar going to get a predictable source of tellurium?
Answer: From the gold mine in Mexico it appears to own. A 10K SECdocument filed by California Gold Corp (CLGL:OTC BB) says, "MineraTeloro, S.A. de C.V.," which, to our knowledge, is a subsidiary of First Solar.