First Solar’s Buried Opportunity: By Looking Down, Things May Be Looking Up

First Solar may be gaining ground in the mining sector in the near future.

Feb 6, 2014 at 9:38AM

Many mining companies are spending less time focusing on the ground and a little more time looking up, believing that solar solutions may be the best way to address rising energy prices. And, it seems that First Solar (NASDAQ:FSLR) is one of the first American solar companies looking to take advantage.


Source: First Solar

The beginning of a beautiful friendship 
Last week at the World Future Energy Summit, First Solar revealed plans to pursue opportunities with mining operations. In an interview with Mining Weekly, John Eccles, fuel replacement solutions director for First Solar, said that the company was in advanced discussions with multinational mining groups, specifically in Australia and Africa.

Why make the switch? Eccles claims that the business of custom-designed solar facilities is "a new field globally and is being driven by the fact that, over the past five years, PV solar power prices have halved, while diesel fuel costs have generally increased. Over the past 12 months changes to those critical parameters have made hybrids viable."

First Solar is already picking up market share in Australia. It recently began construction on what will be the largest solar power facility, 102 MW, in the country. Providing over 1.3 million thin-film PV panels for the project, First Solar expects the facility located in Nyngan, New South Wales to be operational by mid-2015 .

Following the yellow brick road           
One mining company that is paving the way toward adopting solar is Sibanye Gold (NYSE:SBGL), which claims to be the largest producer of gold in South Africa and one of the largest in the world. Last October, the company's CEO, Neal Froneman, in an interview with Bloomberg, revealed that Sibanye Gold is considering the construction of a 10 MW solar power plant to combat rising electricity costs. How significant is the increasing cost of electricity? The company's electricity costs have risen 60% since 2007, despite the company's 16% reduction in electricity consumption. "We're just at the point where the cost of photovoltaic cells now starts crossing over with the cost of electricity from Eskom," Froneman said.

Around the globe                     
Mining companies in South Africa aren't the only ones looking for solar solutions. SunEdison (NYSE:SUNE) expects to complete its Amanecer Solar CAP project during Q1 2014. The 100 MW photovoltaic, or PV, project is the largest PV project to reach this stage of completion in Latin America. Comprised of more than 300,000 SunEdison PV modules, the facility will provide electricity to Chilean mining company CAP SA.

Also in Chile, Energía Llaima and Sunmark A/S have commenced construction on a solar thermal plant, which will provide power for a northern Chile copper mine operation. According to the Chilean Ministry of Mines, the solar facility will produce enough power to replace 85% of the diesel that is currently used in the mine's operations.

There are obstacles to overcome when combing solar projects and mining operations, like market prices for that which is being mined. One such example is Atacama Minerals, a mining company owned by Canadian company Sirroco, which had been planning to begin operations at Agua Blancas, an 8.8 MW solar farm, by July of this year. However, construction had to be delayed due to the fact that the company had to suspend operations due to falling iodine prices.

Foolish final thoughts              
Although First Solar is up nearly 70% over the past year, shares are trading roughly 18% lower than its 52-week high. For investors who have been considering opening a position in the company, does this provide an opportunity for entry? I'd say possibly. The company's Q4 earnings report, set to be released in a few weeks, will certainly provide a clearer picture on how the company is operating. I am impressed, though, with the company's interest in exploring new opportunities, like the mining sector. As always, investors must dig deeper to see if First Solar is right for their portfolios.

Invest where the growth is
Opportunities to get wealthy from a single investment don't come around often, but they do exist, and our chief technology officer believes he's found one. In this free report, Jeremy Phillips shares the single company that he believes could transform not only your portfolio, but your entire life. To learn the identity of this stock for free and see why Jeremy is putting more than $100,000 of his own money into it, all you have to do is click here now.


Scott Levine has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information