They came to see the breakthrough.
That is, after all, what the company called it: a “breakthrough.”
What did it look like? How did it work, exactly? Did it even really exist?
They hoped the answers would be found in Bécancour, Quebec, a weary industrial town–home to Quebec’s only nuclear-power reactor–that sits kitty-corner across the St. Lawrence from Trois-Rivières.
It was here, they were told, that the breakthrough had been made. There were about 50 of them on the bus. Nobody talked much. Some had come from Toronto, others from New York, Boston, Connecticut–institutional investors mostly, along with a few analysts and a good sprinkling of hedge-fund types.
It was May, 2008. No one knew how much the world was about to change. Lehman Brothers was still a major player on Wall Street.
What mattered most, for those on the bus that day, was the price of polysilicon. The photovoltaic industry was booming. European countries like Germany and Spain were plowing hundreds of millions of euros into building solar power infrastructure. Buoyed by these and other government subsidies, the solar industry was scrambling to keep up with demand. Polysilicon–a key ingredient used to make solar cells–was fetching about $400 (U.S.) per kilogram. There was a global shortage of the stuff and solar cell manufacturers were desperate for it.
As the coach pulled up outside an unexceptional-looking industrial building, anticipation mounted. This was the place where Timminco Ltd., until recently a little-known producer of low-grade industrial metals, said it had solved the solar industry’s supply problem. Here, in Bécancour, it had developed a proprietary process to produce solar-grade silicon much more cheaply than anyone else. That promise had propelled Timminco shares from less than 30 cents to more than $22 by the end of 2007, earning it plaudits as the top-performing stock on the Toronto Stock Exchange that year. The company’s market value would soon surpass $3.5-billion.
The passengers peered out the bus window in intent anticipation of what was bound to be the highlight of the company-run tour.
Rupert Merer, an analyst at National Bank Financial, recalls what happened next.
“They opened up some of the [plant] doors while we were sitting in the vehicle, so we could see the equipment through the doors. They did have one of the furnaces working, so you could see the glow of the flames inside the furnace. But that was as close as we got,” he says.
So the bus doors never opened?
“That’s right. We weren’t allowed off the bus.”
The story of Timminco–which concluded early this year with the bankruptcy of the company and the delisting of its stock on the TSX–has, since its beginning, inspired doubters and believers. The company never delivered on its promise to produce cheap solar-grade silicon on a commercial scale. The believers maintain Timminco never got the chance to prove itself because the solar industry collapsed and demand for high-purity silicon dried up almost overnight. The doubters insist the company could never have made the breakthrough.
Even during the solar frenzy of 2007 and early 2008, Timminco had detractors–short sellers betting the stock would fall as the breakthrough claims unravelled. But the skeptics were facing off against one of Canada’s most high-profile money managers: Bay Street stock-picking guru Eric Sprott and his small army of portfolio managers had bought 17 per cent of the company. Not to mention that the largest mutual fund company in the world, Fidelity Investments, had aggressively built up a stake that would eventually reach 15 per cent. And though many investors probably didn’t know it, Timminco even had a distinguished lineage in Canadian corporate history.
Yet Thomas Timmins would prefer not to talk about recent events at the company that bears his family’s name. During a brief telephone interview from his home near Chicago, Timmins apologized for his reticence regarding the fate of the company he joined as a director in 1957. “Timminco is way behind me now,” he said. “I’ve moved forward. I’m not even thinking about it.”
Prior to its solar phase, the Toronto-based company had been around in various forms since the 1930s and, under Timmins’s leadership, it gained a listing on the Toronto Stock Exchange in 1974. The Timmins clan had plenty of stock market experience: Thomas Timmins is the grandson of mining legend Noah Timmins, who developed the Hollinger gold mines and for whom the city of Timmins, Ontario, is named. (Not all the Timminses ended up in metals or mining. Great-grandchildren of Noah’s constitute three-quarters of the drowsy alt-country band Cowboy Junkies.)