Globe Specialty Metals To Build World Class, Low Cost Silicon Metal Plant In Iceland

NEW YORK, Feb. 17, 2011 (GLOBE NEWSWIRE) -- Globe Specialty Metals, Inc. (Nasdaq:GSM) (the "Company" or "Globe") today announces that it has entered into several agreements to build a world class, low cost silicon metal plant in Iceland. Key points are as follows:

• Globe will own approximately 85% of Icelandic Silicon Corporation ("We"), which will own the plant, and Tomahawk Development Company ("Tomahawk"), our minority partner, will own approximately 15%. Globe will operate the plant and market its output primarily to European customers.  
• We expect this facility to be one of the lowest cost silicon metal plants in the Western world, as well as the lowest cost plant in Europe, including Scandinavia.   
• We executed a contract for 66 megawatts of competitively priced, fixed cost power for 18 years. Power in Iceland is generated from renewable energy sources only.  
• The plant, which will be operational in the middle of calendar 2013, will produce approximately 40,000 MT of silicon metal annually from its two 30 megawatt furnaces. Total construction costs are expected to be approximately €115 million.  
• Substantially all of the operating and environmental permits required to build and operate the facility have already been obtained. The site and permits were acquired by Tomahawk, our minority partner, who has worked diligently and productively over the last four years with the Republic of Iceland.   
• The plant will be financed with limited-recourse project financing and with Globe and Tomahawk investments. We will receive a total of €78 million of limited-recourse project financing from two commercial banks. Globe's total cash outlay is expected to be approximately €34 million and Tomahawk will invest an additional €2 million.  
• We have a few remaining steps to finalize our plans prior to commencing construction including final board approval and additional engineering work. We expect to begin construction this summer.

"Globe currently owns and operates four of the five lowest cost silicon metal plants in the Western world, and we expect our new Icelandic plant to be one of our lowest cost facilities," said Globe Executive Chairman, Alan Kestenbaum. "Our decision to build this plant was driven by current and expected increased demand for silicon metal in all parts of the world caused by growth in silicones, significant growth in polysilicon, driven by the solar industry, and increased consumption of silicon metal in the aluminium industry."