On September 26, Hurricane Helene, along with a previous tropical low storm, brought 20-25 inches of rain to Spruce Pine, North Carolina, causing historic flooding that severely damaged much of the town’s infrastructure. Among the affected sites was the mining district in Spruce Pine, where Belgian-based Sibelco Group and Norway-headquartered The Quartz Corp mine and process the world’s largest supply of high-purity quartz material used in the production of silicon. Both companies have closed temporarily closed their Spruce Pine facilities following damage from the hurricane, and it is unknown when either company is likely to resume operations.
The town of Spruce Pine accounts for an estimated 70-90% of the global supply of commercial high-purity quartz (HPQ) as quartz material from the area has an unusually high degree of purity that is currently unrivaled by other mines globally. The exact HPQ output from Sibelco and The Quartz Corp’s mines is unknown, but the area is reported to have a combined output of around 20,000 tons per year. HPQ is used to manufacture crucibles that allow silicon feedstock to be melted and extracted. The high-quality silicon produced in these crucibles is then used to make ingots and wafers for semiconductors and solar panels.
Hurricane Helene hits Spruce Pine mining and logistics operations
Both the Sibelco Group and The Quartz Corp have been forced to halt all mining and processing activities in Spruce Pine since September 26, with Sibelco declaring force majeure on high-purity quartz deliveries from the area on October 1. Sibelco operates three facilities in the Spruce Pine area that produce HPQ –the Schoolhouse, Quartz, and Crysal sites – all of which are assumed to have closed. Although it is unknown what specific damage has occurred at these facilities, the company confirmed that its operations have been affected by flooding, power outages, communications disruptions, and infrastructure damage. A statement by the company on October 4 indicated that the company’s sites only sustained “minor damage” with no impacts to final stocks stored at the sites. Cleanup and repair activities are ongoing but it is currently unknown when operations are likely to resume.
The Quartz Corp has indicated that damage to the company’s facilities is concentrated around ancillary units, which support mining operations but are not directly involved with extraction or processing activities. The company has also declined to specify when operations are likely to resume. However, the Quartz Corp has confirmed it does not foresee any disruption in high-purity quartz supply in the short-to-medium term, as the company also has purification operations located in Norway with high levels of feedstock.
In addition to direct facility damage, the resumption of HPQ production at Spruce Pine also remains dependent on repairs to local infrastructure that have been severely damaged by Helene. Several major roads around Spruce Pine continue to remain closed as of October 8 including sections of US Routes 19E, 221, 321, as well as parts of I-26 near the Tennessee-North Carolina border. Prolonged roadway closures in the area could further delay production recovery efforts at the Spruce Pine mines as both companies primarily on trucks to move HPQ from their facilities.
Railway lines around Spruce Pine have also been severely damaged with CSX, the freight rail operator in the area, noting that its rail network has sustained significant damage due to flooding and bridge collapses. CSX expects a long-term outage on its Blue Ridge subdivision, including the Spruce Pine rail depot, for an unspecified amount of time.
Moreover, over 100 power lines were downed in the area due to the storm and delays in restoring electricity have been reported due to an ongoing shortage of transformers needed to repair damaged substations. Town officials estimate it may take up to three weeks to fully restore power supplies.
Long term HPQ disruption could impact supplies of chip and solar wafers
Prolonged disruptions to HPQ output at Spruce Pine could lead to shortages of monocrystalline silicon used in the semiconductor sector. While quartz mines all over the world supply key inputs for many products ranging from metal alloys to silicone polymers, HPQ from Spruce Pine is distinct due to its unusually high purity, making the area one of the world’s only sources of quartz that can be used to manufacture crucibles that are used in the production of semiconductor-grade monocrystalline silicon wafers. The Spruce Pine mines likely serve as major sources of HPQ for major silicon wafer producers including Japan-based Shin-Etsu Chemical Co., Ltd. and SUMCO Corporation as well as Taiwan-based GlobalWafers.
The ongoing supply disruption of Spruce Pine HPQ is not expected to lead to a significant shortage in the semiconductor sector within the next 1-2 months as existing stocks of HPQ and silicon from Sibelco, The Quartz Corp, and their customers will likely meet demand from chipmakers over this period. Additionally, semiconductor manufacturers like TSMC that are further down the chip supply chain also have their own chip buffer stocks – further delaying any impact of a HPQ shortage until these chip supplies run out. However, a prolonged stoppage at the Spruce Pine mines lasting longer than 3 months could begin placing stress on existing inventories of both HPQ and by extension the supply of semiconductor wafers.
Additionally, any significant delay in the reopening of Spruce Pine’s HPQ mines could lead to shortages in the renewables sector as HPQ is also required to produce polycrystalline silicon used in solar cells. HPQ from Spruce Pine is regularly purchased by solar photovoltaic manufacturers in China as the country does not have its own source of comparable quartz despite its dominance in the rest of the solar supply chain. For example, Inner Mongolia Ojing Science and Technology Co., Ltd., recently signed a $350 million (€319 million) procurement agreement with Sibelco to purchase HPQ from its Spruce Pine sites in February 2024. A long-term halt in HPQ production at Spruce Pine could therefore cause downstream disruptions to photovoltaic manufacturers in China.
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