10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended June 30, 2012
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from          to

Commission File Number 001-34420

Globe Specialty Metals, Inc.

(Exact name of registrant as specified in its charter)

Delaware	20-2055624
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Penn Plaza

250 West 34th Street, Suite 4125

New York, NY 10119

(Address of principal executive offices, including zip code)

(212) 798-8122

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common stock, $0.0001 par value	The NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  o      No  þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  o      No  þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  þ      No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  þ      No  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  þ      Accelerated filer  o Non-accelerated filer  o Smaller reporting company  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  o      No  þ

As of August 23, 2012, the registrant had 75,051,549 shares of common stock outstanding. As of December 31, 2011 (the last business day of the Registrant's most recently completed second fiscal quarter), the aggregate market value of such shares held by non-affiliates of the Registrant was approximately $861.1 million.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's definitive Proxy Statement relating to the 2012 Annual Meeting of Stockholders, filed with the Securities and Exchange Commission, are incorporated by reference in Part III, Items 10 - 14 of this Annual Report on Form 10-K as indicated herein.

Globe Specialty Metals, Inc.

		Page
		No.
PART I
Special Note Regarding Forward-Looking Statements			1
1	Business		1
1A	Risk Factors		8
1B	Unresolved Staff Comments		13
2	Properties		14
3	Legal Proceedings		14
4	Mine Safety Disclosure		14
PART II
5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		15
6	Selected Financial Data		16
7	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
7A	Quantitative and Qualitative Disclosures About Market Risk		27
8	Financial Statements and Supplementary Data		28
9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		28
9A	Controls and Procedures		28
9B	Other Information		29
PART III
10	Directors, Executive Officers and Corporate Governance		30
11	Executive Compensation		30
12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		30
13	Certain Relationships and Related Transactions and Director Independence		30
14	Principal Accountant Fees and Services		30
PART IV
15	Exhibits and Financial Statement Schedules		31
	Signatures		34

PART I

Special Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. The forward-looking statements are contained principally in the sections entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Forward-looking statements include statements about:

• the anticipated benefits and risks associated with our business strategy;

• our future operating results and the future value of our common stock;

• the anticipated size or trends of the markets in which we compete and the anticipated competition in those markets;

• our ability to attract customers in a cost-efficient manner;

• our ability to attract and retain qualified management personnel;

• our future capital requirements and our ability to satisfy our capital needs;

• the potential for additional issuances of our securities; and

• the possibility of future acquisitions of businesses or assets.

Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties including, but not limited to:

• the historic cyclicality of the metals industry and the attendant swings in market price and demand;

• increases in energy costs and the effect on our cost of production;

• disruptions in the supply of power;

• availability of raw materials or transportation;

• cost of raw material inputs and our ability to pass along those costs to customers;

• the concentration of our sales to a limited number of customers and the potential loss of a portion of sales to those customers;

• changes in laws protecting U.S. companies from unfair foreign competition;

• integration and development of prior and future acquisitions; and

• other risks described from time to time in our filings with the United States Securities and Exchange Commission (SEC), including the risks discussed under the heading “Risk Factors” in this Annual Report.

Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date the statements are made. You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update any forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Item 1.                 Business

Overview

Globe Specialty Metals, Inc. and subsidiary companies (GSM, the Company, we, us, or our) is one of the world’s largest and most efficient producers of silicon metal and silicon-based alloys, with approximately 120,000 metric tons (MT) of silicon metal capacity (excluding Dow Corning Corporation’s portion of the capacity of our Alloy, West Virginia plant and our Becancour, Quebec plant) and 120,000 MT of silicon-based alloys capacity. Silicon metal, our principal product, is used as a primary raw material in making silicone compounds, aluminum and polysilicon. Our silicon-based alloys are used as raw materials in making steel, automotive components and ductile iron. We control the supply of most of our raw materials, and we capture, recycle and sell most of the by-products generated in our production processes.

Our products are currently produced in seven principal operating facilities located in the United States, Canada and Argentina. Additionally, we operate facilities in Poland and China. Our flexible manufacturing capabilities allow us to optimize production and focus on products that enhance profitability. We also benefit from the lowest average operating costs of any large Western World producer of silicon metal, according to CRU International Limited (CRU), a leading metals industry consultant. CRU defines “Western World” as all countries supplying or consuming silicon metal with the exception of China and the former republics of the Soviet Union, including Russia.

1

Fiscal 2012 was a successful and active year for us. We had a record year of sales and profits despite the economic headwinds largely caused by the uncertainty in Europe. Sales and profits grew from the prior year as average selling prices increased and shipments remained stable.  Average prices increased for both silicon metal and silicon-based alloys.  In July 2011 we acquired Alden Resources, North America’s leading miner of specialty metallurgical coal for the silicon and silicon-based alloy industries and in June 2012 we acquired a 51% interest in Quebec Silicon, a 47,000 MT silicon metal plant in Canada and closed on a $300 million holding company revolving credit facility. These transactions, as described below, will serve to broaden our product mix, improve our profitability and position us for significant continued future growth.

·   In July 2011, we closed on the acquisition of Alden Resources, LLC, North America’s leading miner, processor and supplier of specialty metallurgical coal to the silicon and silicon-based alloys industries. Specialty metallurgical coal is a key ingredient in the production of silicon metal. Alden is a major supplier of this type of specialty metallurgical coal to GSM and other silicon producers. By acquiring Alden, we secured a stable, long-term and low-cost supply of this key raw material to support continued growth worldwide while maintaining Alden's position as a leading supplier to other silicon and silicon-based alloy producers. Charcoal, where available, is a more costly alternative to coal and whose cost Globe would have to incur without adequate coal supplies. Alden has approximately 21 million tons of reserves of specialty metallurgical coal used predominately in the silicon and silicon-based alloy industries. Alden is currently operating six mines in Kentucky. Alden also owns and operates a coal preparation plant in eastern Kentucky that washes and prepares the coal. The plant is newly upgraded and capable of processing over 2.5 million tons of coal per year.   Alden is presently supplying the bulk of our coal needs at our plants in the US and Canada and is beginning to sell a meaningful amount of coal to third parties.

·   In June 2012 we closed on the acquisition of the silicon metal assets of Becancour Silicon Inc. including its 51% interest in Quebec Silicon Limited Partnership, collectively known as Quebec Silicon, a 47,000 metric ton silicon metal plant as well as certain working capital assets.  Globe operates the silicon metal plant, consolidates the results, and purchases approximately 51% of its finished goods output at a price approximately equal to the fully loaded cost of production and sells the material to third party customers. Dow Corning Corporation (Dow Corning) has the right to purchase the other 49% of the plant's output at a price approximately equal to the fully loaded cost of production. This arrangement is similar to the Company's existing joint venture with Dow Corning at its Alloy, West Virginia plant. Globe believes that it can achieve meaningful cost reductions and operating efficiencies at the plant, primarily involving raw materials and processes which should benefit Globe and Dow Corning.  We have already made certain improvements and cost reductions at the plant by supplying Alden coal, reducing employee headcount and enhancing operating procedures.

·   In May 2012 we closed on a new $300,000,000 syndicated credit facility. The facility refinanced existing debt and closing costs of $96,550,000 and along with the Company’s cash balances, it can be used to finance acquisitions, growth initiatives, stock buy-backs, working capital and for general corporate purposes.  The facility is a revolving loan and does not require a borrowing base. It has a five-year term and at the current leverage ratio, carries an interest rate of LIBOR plus 1.75%. The loan has certain financial covenants, negative covenants and restrictions.

Average selling prices increased 8% from our prior year, with an 11% increase in silicon metal and a 6% increase in silicon-based alloys.  Volumes remained stable from year to year.  Average selling prices declined beginning in the third fiscal quarter of 2012 as our annual silicon metal contracts renewed at lower prices than the prior calendar year and silicon-based alloy prices declined primarily due to decreases in indices. In addition, a portion of our annual silicon metal contracts are priced based on indexes which caused an additional decline in average selling prices in the fourth quarter.

We are presently running all of our furnaces at full capacity, subject to planned maintenance outages.  Demand for silicon metal is improving based on-end user demand for silicones, which are additives to hundreds of products such as cosmetics, textiles, paints and coatings, and by growing demand for polysilicon, which is used to produce photovoltaic (solar) cells and semiconductors. Major silicone and polysilicon producers are operating at solid capacity with good expectations for future growth and significant new polysilicon capacity is being built in the United States. Demand and pricing for silicon-based alloys is largely driven by end user requirements for our mostly customized product offerings from specialty steel producers and foundries. Major customers are growing to support increased auto production, domestically and overseas, and for other uses of specialty steel and castings.

Business segments

GMI

GMI currently operates six principal production facilities in the United States located in Beverly, Ohio, Alloy, West Virginia, Selma, Alabama, Niagara Falls, New York and Bridgeport, Alabama and one production facility in Canada located in Becancour, Quebec. GMI also operates six coal mines and a coal preparation plant in Kentucky and an open-pit quartzite mine in Alabama.

Globe Metais

Globe Metais is a distributor of silicon metal manufactured in Brazil. This segment includes the historical Brazilian manufacturing operations, comprised of a manufacturing plant in Breu Branco, mining operations and forest reserves, which were sold on November 5, 2009. Subsequent to this divestiture, Globe Metais’ net sales relate only to the fulfillment of certain retained customer contracts, which were completed as of December 31, 2010.

Globe Metales

Globe Metales operates a production facility in Mendoza, Argentina and a cored-wire fabrication facility in San Luis, Argentina. Globe Metales specializes in producing silicon-based alloy products, either in lump form or in cored-wire, a delivery method preferred by some manufacturers of steel, ductile iron, machine and auto parts and industrial pipe.

Solsil

Solsil is continuing to develop its technology to produce upgraded metallurgical grade silicon metal (UMG) manufactured through a proprietary metallurgical process, which is primarily used in silicon-based photovoltaic (solar) cells. Solsil is located in Beverly, Ohio and is currently focused on research and development projects and is not producing material for commercial sale. We own a 97.25% interest in Solsil, Inc. (Solsil).

Corporate

The corporate office, located in New York, New York, includes general expenses, investments, and related investment income.

Other

Ningxia Yonvey Coal Industrial Co., Ltd. (Yonvey).   Yonvey produces carbon electrodes, an important input in our production process, at a production facility in Shizuishan in the Ningxia Hui Autonomous Region of China. We currently consume internally the majority of Yonvey’s output of electrodes. We hold a 70% ownership interest in Yonvey.

Ultracore Polska Sp.z.o.o (UCP).   UCP produces cored-wire silicon-based alloy products. The fabrication facility is located in Police in northern Poland.

See our June 30, 2012 consolidated financial statements for financial information with respect to our segments.

2

Products and Operations

The following chart shows the location of our primary facilities, the products produced at each facility and each facility’s production capacity.

Customers and Markets

The following table details our shipments and average selling price per MT over the last eight quarters through June 30, 2012. See note 21 (Operating Segments) to our June 30, 2012 consolidated financial statements for additional information.

			Quarter Ended
			June 30,	March 31,	December 31,	September 30,	June 30,	March 31,	December  31,	September 30,
			2012	2012	2011	2011	2011	2011	2010	2010
			(Unaudited)
Shipments (MT) (a)
	Silicon metal		35,343	30,210	26,647	27,434	31,096	32,266	29,922	29,323
	Silicon-based alloys		31,340	30,618	24,659	26,851	25,484	27,010	29,249	29,125
	Total		66,683	60,828	51,306	54,285	56,580	59,276	59,171	58,448
Average selling price ($/MT) (a)
	Silicon metal	$	2,762	2,901	3,208	3,279	3,198	3,071	2,550	2,481
	Silicon-based alloys	$	2,267	2,287	2,501	2,501	2,452	2,264	2,031	1,839
	Silicon metal and silicon-based alloys	$	2,530	2,592	2,868	2,894	2,862	2,703	2,294	2,161

___________

(a) Shipments and average selling price exclude coal, silica fume, other by-products and electrodes.

During the year ended June 30, 2012, our customers engaged primarily in the manufacture of silicone chemicals and polysilicon (34% of revenue), foundry alloys (19% of revenue), aluminum (17% of revenue) and steel (16% of revenue). Our customer base is geographically diverse, and includes North America, Europe, Asia and South America, which for the year ended June 30, 2012, represented 82%, 8%, 7% and 3% of our revenue, respectively.

For the year ended June 30, 2012, one customer accounted for more than 10% of revenues: Dow Corning, represented approximately 13% of revenues (approximately 88% of which was a result of the manufacturing joint ventures at our Alloy, West Virginia and Becancour, Quebec plants). Our ten largest customers account for approximately 45% of our net sales. These percentages include sales made under our joint venture agreements to Dow Corning.

Silicon Metal

We are among the world’s largest and most efficient producers of silicon metal. Silicon-based products are classified by the approximate percentage of silicon contained in the material and the levels of trace impurities. We produce specialty-grade, high quality silicon metal with silicon content generally greater than 99.25%. We produce the majority of this high-grade silicon metal for three industries: (i) the aluminum industry; (ii) the chemical industry; and (iii) polysilicon producers in the photovoltaic (solar)/semiconductor industry. We also continue to develop our technology to produce UMG for photovoltaic (solar) applications.

3

We market to primary aluminum producers who require silicon metal with certain purity requirements for use as an alloy, as well as to the secondary aluminum industry where specifications are not as stringent. Aluminum is used to manufacture a variety of automobile and truck components, including engine pistons, housings, and cast aluminum wheels and trim, as well as uses in high tension electrical wire, aircraft parts, beverage containers and other products which require optimal aluminum properties. The addition of silicon metal reduces shrinkage and the hot cracking tendencies of cast aluminum and improves the castability, hardness, corrosion resistance, tensile strength, wear resistance and weldability of the end products.

Purity and quality control are important. For instance, the presence of iron in aluminum alloys, in even small quantities, tends to reduce its beneficial mechanical properties as well as reduce its lustrous appearance, an important consideration when producing alloys for aluminum wheels and other automotive trim. We have the ability to produce silicon metal with especially low iron content as a result of our precisely controlled production processes.

We market to all the major silicone chemical producers. Silicone chemicals are used in a broad range of applications, including personal care items, construction-related products, health care products and electronics. In construction and equipment applications, silicones promote adhesion, act as a sealer and have insulating properties. In personal care and health care products, silicones add a smooth texture, protect against ultra violet rays and provide moisturizing and cleansing properties. Silicon metal is an essential component of the manufacture of silicones, accounting for approximately 20% of the cost of production.

We market to producers of silicon wafers and solar cells who utilize silicon metal as the core ingredient of their product. These manufacturers employ processes to further purify the silicon metal and then use the material to grow crystals. These crystals are then cut into wafers, which are capable of converting sun light to electricity. The individual wafers are then soldered together to make solar cells.

We enter into annual contracts for a majority of our silicon metal production.

Silicon-Based Alloy Products

We make ferrosilicon by combining silicon dioxide (quartzite) with iron in the form of scrap steel and iron oxides. To produce our high-grade silicon-based alloys, we combine ferrosilicon with other additions that can include precise measured quantities of other metals and rare earths to create alloys with specific metallurgical characteristics. Our silicon-based alloy products can be divided into four general categories: (i) ferrosilicon, (ii) magnesium-ferrosilicon-based alloys, (iii) ferrosilicon-based alloys and (iv) calcium silicon.

Magnesium-ferrosilicon-based alloys are known as “nodularizers” because, when combined with molten grey iron, they change the graphite flakes in the iron into spheroid particles, or “nodules,” thereby increasing the iron’s strength and resilience. The resulting product is commonly known as ductile iron. Ductile iron is employed in numerous applications, such as the manufacture of automobile crankshafts and camshafts, exhaust manifolds, hydraulic valve bodies and cylinders, couplings, sprockets and machine frames, as well as in commercial water pipes. Ductile iron is lighter than steel and provides better castability (i.e., intricate shapes are more easily produced) than untreated iron.

Ferrosilicon-based alloys (without or with very low concentrations of magnesium) are known as “inoculants” and can contain any of a large number of combinations of metallic elements. Inoculants act to evenly distribute the graphite particles found in both grey and ductile iron and refine other microscopic structures, resulting in a product with greater strength and improved casting and machining properties.

Calcium silicon alloys are widely used to improve the quality, castability and machinability of steel. Calcium is a powerful modifier of oxides and sulfides. It improves the castability of the steel in a continuous casting process by keeping nozzles from clogging. Calcium also improves the machinability of steel, increasing the life of cutting tools.

We believe that we distinguish ourselves from our competitors by providing technical advice and service to our silicon-based alloy customers and by tailoring the chemical composition of our alloys to the specific requirements of each customer’s product line and foundry process. Silicon-based alloy customers are extremely quality conscious. We have intensive quality control measures at each stage of the manufacturing process to ensure that our customers’ specifications are met.

Our silicon-based alloys are sold to a diverse base of customers worldwide. Silicon-based alloys are typically sold on quarterly contracts or on a spot basis. We have evergreen year-to-year contracts with many of our customers for the purchase of our magnesium-ferrosilicon-based products, while foundry ferrosilicon alloys are typically purchased in smaller quantities for delivery within 30 days.

By-Products

We capture, recycle and sell most of the by-products generated in our production processes. The largest volume by-product not recycled into the manufacturing process is silica fume (also known as microsilica). This dust-like material, collected in our air filtration systems, is sold to our 50%-owned affiliate, Norchem Inc., and other companies which process, package and market it for use as a concrete additive, refractory material or oil well conditioner. The other major by-products of our manufacturing processes are “fines,” the fine material resulting from crushing, and dross, which results from the purification process during smelting. The fines and dross that are not recycled into our own production processes are generally sold to customers who utilize these products in other manufacturing processes, including steel production.

Raw Material Supply

We control the supply of most of our raw materials. All of our products require coal or charcoal and woodchips in their manufacture. The acquisition of Alden Resources in July 2011 provides a stable and long-term supply of low ash metallurgical grade coal supplying a substantial portion of our requirements to our operations in the U.S. and Canada. We have reduced our use of charcoal because of the increased coal supply from Alden Resources. We also obtain low ash metallurgical grade coal from other sources in the U.S. We have mining operations located in Billingsley, Alabama. These mines supply our U.S. operations with a substantial portion of our requirements for quartzite, the principal raw material used in the manufacturing of all of our products. We believe that these mines, together with additional leasing opportunities in the vicinity, should cover our needs well into the future. We also obtain quartzite from other sources in the U.S. The gravel is mined, washed and screened to our specifications by our suppliers. We use charcoal from South American suppliers for our Argentine operations. Woodchips are sourced locally by each plant, and we maintain a wood chipping operation at certain plants in the U.S and Canada, which allows us to either buy logs or chips based on market pricing and availability. Carbon electrodes are supplied by Yonvey and are also purchased from several other suppliers on annual contracts and spot purchases. Most of our metal purchases are made on the spot market or from scrap dealers, with the exception of magnesium, which is purchased under a fixed duration contract for our U.S. business. Our principal iron source for producing ferrosilicon-based alloys has been scrap steel. Magnesium and other additives are obtained from a variety of sources producing or dealing in these products. We also obtain raw materials from a variety of other sources. Rail and truck are our principal transportation methods for gravel and coal. We have rail spurs at all of our plants. Other materials arrive primarily by truck. We require our suppliers, whenever feasible, to use statistical process control procedures in their production processes to conform to our own processes.

4

We believe that we have a cost advantage in most of our long-term power supply contracts. Our power supply contracts result in stable, favorably priced, long-term commitments of power at reasonable rates. In West Virginia, we have a contract with Brookfield Energy to provide approximately 45% of our power needs, from a dedicated hydroelectric facility, at a fixed rate through December 2021. The remainder of our power needs in West Virginia, Ohio and Alabama are sourced through contracts that provide tariff rates at historically competitive levels. In connection with the reopening of our Niagara Falls, New York plant, and as an incentive to reopen the plant, we obtained a public-sector package including 40 megawatts of hydropower through 2013, which was subsequently extended to 2020. We have entered into power hedge agreements, ending in June 2013, for approximately 20% of the total power required by our Niagara Falls, New York plant. These hedges cover our expected needs not supplied by the long-term power contract over the term of the hedge agreements.

Sales and Marketing Activities

Our silicon metal is typically sold through annual contracts which serve to lock in volumes and prices. Multi-year contracts have historically represented a meaningful portion of our silicon metal sales; however, substantially all silicon metal multi-year contracts expired at the end of calendar 2010. We have entered into annual calendar 2012 contracts for the bulk of our capacity. These agreements are largely fixed priced - with approximately 30% being priced based on an index - with a mix of firm volume commitments and requirements contracts.

Our marketing strategy is to maximize profitability by varying the balance of our product mix among the various silicon-based alloys and silicon metal. Our products are marketed directly by our own marketing staff located in Buenos Aires, Argentina, Police, Poland, and at various locations in the United States and who work together to optimize the marketing efforts. The marketing staff is supported by our Technical Services Manager, who supports the sales representatives by advising foundry customers on how to improve their processes using our products.

We also employ customer service representatives. Order receiving, entry, shipment coordination and customer service is handled primarily from the Beverly, Ohio facility for our U.S. operations, and in Buenos Aires, Argentina, and Police, Poland for our non U.S. operations. In addition to our direct sales force, we sell through distributors in various U.S. regions, Canada, Southern and Northern Mexico, Australia, South America and Europe.

We maintain credit insurance for the majority of our customer receivables to mitigate collection risk.

Competition

The silicon metal and silicon-based alloy markets are capital intensive and competitive. Our primary competitors are Elkem AS, owned by China National Bluestar Group Co. Ltd., and Grupo Ferroatlantica S.L. In addition, we also face competition from other companies, such as, Rima Industrial SA and Ligas de Alumino SA, as well as producers in China and the former republics of the Soviet Union. We have historically proven to be a highly efficient, low cost producer, with competitive pricing and manufacturing processes that capture most of our production by-products for reuse or resale. We also have the flexibility to adapt to current market demands by switching certain furnaces between silicon-based alloy and silicon metal production with economical switching costs. We face continual threats from existing and new competition. Nonetheless, certain factors can affect the ability of competition to enter or expand. These factors include (i) lead time of three to five years to obtain the necessary governmental approvals and construction completion; (ii) construction costs; (iii) the need to situate a manufacturing facility proximate to raw material sources, and (iv) energy supply for manufacturing purposes.

Competitive Strengths

We believe that we possess a number of competitive strengths that position us well to continue as one of the leading global suppliers of silicon metal and silicon-based alloys.

•  Leading Market Positions.   We hold leading market shares in a majority of our products. Our silicon metal capacity of approximately 120,000 MT annually (excluding Dow Corning’s portion of the capacity of our Alloy, West Virginia plant and our Becancour, Quebec plant), represents approximately 12% of the total Western World capacity, including 58% of total capacity and 100% of merchant capacity in North America. We estimate that we have approximately 20% Western World capacity for magnesium ferrosilicon, including 50% capacity in North America and are one of only six suppliers of calcium silicon in the Western World (with estimated 18% capacity).

•  Low Cost Producer.   We have been recognized by CRU as the lowest average operating cost large silicon metal producer in the Western World. Currently, CRU lists our four silicon metal manufacturing facilities as being among CRU’s five most cost efficient silicon metal manufacturing facilities in the Western World, of which three being the lowest cost facilities.

•  Highly Variable Cost Structure.   We operate with a largely variable cost of production and have the ability to rapidly turn furnaces on and off to react to changes in customer demand. During the global economic recession in 2008-2009, we were able to quickly idle certain furnaces as demand declined and then quickly re-start them at minimal cost as demand returned.

•  Long-Term Power Contracts.   We also believe that we have a cost advantage in our long-term power supply contracts, which provide a significant portion of our power needs. These power supply contracts result in stable, favorably priced, long-term commitments of power at reasonable rates.

•  Stable Raw Material Supply Through Captive Mines.   The acquisition of Alden Resources provides a stable and long-term supply of low ash metallurgical grade coal supplying a substantial portion of our requirements to our operations in the U.S. and Canada. We have quartz mining operations, located in Billingsley, Alabama, for which we currently possess long-term lease mining rights. These mines supply our U.S. plants with a majority of our requirements for quartzite, the principal raw material used in the manufacturing of our products. We believe that these mines, taken together with additional leasing opportunities in the vicinity should cover our needs well into the future. We have also obtained a captive supply of electrodes, an important input in our manufacturing process, through our ownership in Yonvey.

•  Efficient and Environmentally Sensitive By-Product Usage.   We utilize or sell most of our manufacturing processes’ by-products, which reduces costs and limits environmental impact.

•  Diverse Products and Markets.   We sell our products to a wide variety of industries and to companies in over 30 countries. We believe that our diverse product and geographic end-market profile provides us with numerous growth opportunities and should help insulate us from economic downturns occurring in any individual industry or geographic region, however global macroeconomic factors will impact the effectiveness of our industrial and geographical diversity strategy. See note 21 (Operating Segments) to our June 30, 2012 consolidated financial statements for additional information.

•  Experienced, Highly Qualified Management Team.   We have assembled a highly qualified management team with over 50 years of combined experience in the metals industry among our top four executives. Alan Kestenbaum, our Executive Chairman, Jeff Bradley, our Chief Executive Officer and Chief Operating Officer, Malcolm Appelbaum, our Chief Financial Officer, and Stephen Lebowitz, our Chief Legal Officer, have over 22, 27, 7 and 9 years of experience, respectively, in metals industries. We believe that our management team has the operational and technical skill to continue to operate our business at world class levels of efficiency and to consistently produce silicon metal and silicon-based alloys.

5

Business Strategy

•  Focus on Core Businesses.   We differentiate ourselves on the basis of our technical expertise and high product quality and use these capabilities to retain existing accounts and cultivate new business. As part of this strategy, we are focusing our production and sales efforts on our silicon metals and silicon-based alloys to end markets where we may achieve the highest profitability. We continue to evaluate our core business strategy and may divest certain non-core and lower margin businesses to improve our financial and operational results.

•  Continue to Rationalize Costs to Meet Current Levels of Demand.   We are focused on operating in a cost effective manner and continue to focus on cost control in order to improve our profitability. Our largely variable cost of production should allow us to remain profitable during periods of reduced demand.

•  Capitalize on Market Conditions.   In fiscal year 2010, we reopened our Niagara Falls, New York and Selma, Alabama plants and are currently running all furnaces at full capacity, other than planned maintenance outages. We remain focused on improving furnace uptime and production output.

•  Maintain Low Cost Position While Controlling Inputs.   We intend to maintain our position as one of the most cost-efficient producers of silicon metal in the world by continuing to control the cost of the process inputs through our captive sources and long-term supply contracts. We continue to focus on reducing our fixed costs in order to reduce costs per MT of silicon metal and silicon-based alloy sold.

•  Continue Pursuing Strategic Acquisition Opportunities.   We continue to pursue complementary acquisitions at appropriate valuations. We are actively reviewing several possible transactions to expand our strategic capabilities and leverage our products and operations. We intend to build on our history of successful acquisitions by continuing to evaluate attractive acquisition opportunities for the purpose of increasing our capacity, increasing our access to raw materials and other inputs and acquiring further refined products for our customers. Our focus is on investing globally in companies, technologies or products that complement and/or diversify our business or product offerings. In particular, we will consider acquisitions or investments that will enable us to leverage our expertise in silicon metal and silicon-based alloy products and to grow in these markets, as well as enable us to enter new markets or sell new products. We believe our overall metallurgical expertise and skills in lean production technologies position us well for future growth.

•  Leverage Flexible Manufacturing and Expand Other Lines of Business.   We will leverage our flexible manufacturing capabilities to optimize the product mix produced while expanding the products we offer. Additionally, we can leverage our broad geographic manufacturing reach to ensure that production of specific metals is in the most appropriate facility/region. Besides our principal silicon metal products, we have the capability to produce silicon-based alloys, such as ferrosilicon and silicomanganese, using the same facilities. Our business philosophy is to allocate our furnace capacity to the products which we expect will improve profitability.

•  Leverage Synergies Among Units.   According to CRU, we currently have the three lowest cost, and four of the five lowest cost silicon metal manufacturing facilities in the Western World. Additionally, according to CRU, the average operating cost of our four silicon metal production facilities is approximately 11.7% lower than the Western World weighted average cost. We seek to leverage each of our facilities’ best practices and apply them across our system.

Employees

As of June 30, 2012, we had 1,493 employees. We have 984 employees in the United States, 204 employees in Canada, 160 employees in Argentina, 29 employees in Poland and 116 employees in China. Our total employees consist of 458 salaried employees and 1,035 hourly employees and include 665 unionized workers. This compares to 1,213 employees at June 30, 2011.

We have not experienced any work stoppages and consider our relations with our employees to be good. Our hourly employees at our Selma, Alabama facility are covered by a collective bargaining agreement with the Industrial Division of the Communications Workers of America, under a contract running through July 31, 2013. Our hourly employees at our Alloy, West Virginia, Niagara Falls, New York and Bridgeport, Alabama facilities are covered by collective bargaining agreements with The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union under contracts running through April 27, 2014, July 29, 2014, and March 31, 2015, respectively. Union employees in Argentina are working under a contract running through April 30, 2013. Union employees in Canada are working under a contract running through April 2013. Our operations in Poland and China are not unionized.

Research and Development

Our primary research and development activities are concentrated in our Solsil business unit. Solsil is continuing to develop its technology to produce upgraded metallurgical grade silicon manufactured through a proprietary metallurgical process and which is primarily used in silicon-based photovoltaic (solar) cells. Solsil conducts research and development activities designed to improve the purity of its silicon. The business performs experiments, including continuous batch modifications with the goal of improving efficiencies, lowering costs and developing new products that we expect will meet the needs of the photovoltaic (solar) industry. These activities are performed at Solsil’s operations, which are currently located within our facility at Beverly, Ohio. Our success in producing UMG for the solar industry is expected to help lower the production cost of photovoltaic (solar) cells and increase the overall affordability of the technology.

Proprietary Rights and Licensing

The majority of our intellectual property relates to process design and proprietary know-how. Our intellectual property strategy is focused on developing and protecting proprietary know-how and trade secrets, which are maintained through employee and third-party confidentiality agreements and physical security measures. Although we have some patented technology, our businesses or profitability does not rely fundamentally upon such technology.

Regulatory Matters

We operate facilities in the U.S. and abroad, which are subject to foreign, federal, national, state, provincial and local environmental, health and safety laws and regulations, including, among others, those governing the discharge of materials into the environment, hazardous substances, land use, reclamation and remediation and the health and safety of our employees. These laws and regulations require us to obtain from governmental authorities permits to conduct certain regulated activities, which permits may be subject to modification or revocation by such authorities.

We are subject to the risk that we have not been or will not be at all times in complete compliance with such laws, regulations and permits. Failure to comply with these laws, regulations and permits may result in the assessment of administrative, civil and criminal penalties or other sanctions by regulators, the imposition of remedial obligations, the issuance of injunctions limiting or preventing our activities and other liabilities. Under these laws, regulations and permits, we could also be held liable for any and all consequences arising out of human exposure to hazardous substances or environmental damage we may cause or that relates to our operations or properties. Environmental, health and safety laws are likely to become more stringent in the future. Our costs of complying with current and future environmental, health and safety laws, and our liabilities arising from past or future releases of, or exposure to, hazardous substances, may adversely affect our business, results of operations and financial condition.

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There are a variety of laws and regulations in place or being considered at the international, federal, regional, state, provincial and local levels of government that restrict or are reasonably likely to restrict the emission of carbon dioxide and other greenhouse gases. These legislative and regulatory developments may cause us to incur material costs to reduce the greenhouse gas emissions from our operations (through additional environmental control equipment or retiring and replacing existing equipment) or to obtain emission allowance credits, or result in the incurrence of material taxes, fees or other governmental impositions on account of such emissions. In addition, such developments may have indirect impacts on our operations, which could be material. For example, they may impose significant additional costs or limitations on electricity generators, which could result in a material increase in our energy costs.

Certain environmental laws assess liability on current or previous owners or operators of real property for the cost of removal or remediation of hazardous substances. In addition to cleanup, cost recovery or compensatory actions brought by foreign, federal, state, provincial and local agencies, neighbors, employees or other third parties could make personal injury, property damage or other private claims relating to the presence or release of hazardous substances. Environmental laws often impose liability even if the owner or operator did not know of, or was not responsible for, the release of hazardous substances. Persons who arrange for the disposal or treatment of hazardous substances also may be responsible for the cost of removal or remediation of these substances. Such persons can be responsible for removal and remediation costs even if they never owned or operated the disposal or treatment facility. In addition, such owners or operators of real property and persons who arrange for the disposal or treatment of hazardous substances can be held responsible for damages to natural resources.

Soil or groundwater contamination resulting from historical, ongoing or nearby activities is present at certain of our current and historical properties, and additional contamination may be discovered at such properties in the future. Based on currently available information, we do not believe that any costs or liabilities relating to such contamination will have a material adverse effect on our financial condition, results of operations or liquidity.

Under current federal black lung benefits legislation, each coal mine operator is required to make certain payments of black lung benefits or contributions to:

•  current and former coal miners totally disabled from black lung disease (pneumoconiosis);

•  certain survivors of a miner who dies from black lung disease or pneumoconiosis; and

•  a trust fund for the payment of benefits and medical expenses to claimants whose last mine employment was before January 1, 1970, where no responsible coal mine operator has been identified for claims (where a miner's last coal employment was after December  31, 1969), or where the responsible coal mine operator has defaulted on the payment of such benefits. The trust fund is funded by an excise tax on U.S. production of up to $1.10 per ton for deep mined coal and up to $0.55 per ton for surface-mined coal, neither amount to exceed 4.4% of the gross sales price.

The Patient Protection and Affordable Care Act (PPACA), which was implemented in 2010, made two changes to the Federal

Black Lung Benefits Act. First, it provided changes to the legal criteria used to assess and award claims by creating a legal

presumption that miners are entitled to benefits if they have worked at least 15 years in underground coal mines, or in similar

conditions, and suffer from a totally disabling lung disease. To rebut this presumption, a coal company would have to prove that a miner did not have black lung or that the disease was not caused by the miner's work. Second, it changed the law so black lung benefits will continue to be paid to dependent survivors when the miner passes away, regardless of the cause of the miner's death. In addition to the federal legislation, we are also liable under various state statutes for black lung claims.

Other Information

Globe Specialty Metals, Inc. was incorporated in December 2004 pursuant to the laws of the State of Delaware under the name “International Metal Enterprises, Inc.” for the initial purpose to serve as a vehicle for the acquisition of companies operating in the metals and mining industries. In November 2006, we changed our name to “Globe Specialty Metals, Inc.”

Our internet website address is www.glbsm.com. Copies of the following reports are available free of charge through the internet website, as soon as reasonably practicable after they have been filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended: the Annual Report on Form 10-K; quarterly reports on Form 10-Q; current reports on Form 8-K; any amendments to such reports; and proxy statements. Information on the website does not constitute part of this or any other report filed with or furnished to the SEC.

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Item 1A. Risk Factors

You should consider and read carefully all of the risks and uncertainties described below, together with all of the other information contained in this Annual Report on Form 10-K, including the consolidated financial statements and the related notes to consolidated financial statements. If any of the following events actually occur, our business, business prospects, financial condition, results of operations or cash flows could be materially affected. In any such case, the trading price of our common stock could decline, and you could lose all or part of your investment.

The metals industry, including silicon-based metals, is cyclical and has been subject in the past to swings in market price and demand which could lead to volatility in our revenues.

Our business has historically been subject to fluctuations in the price of our products and market demand for them, caused by general and regional economic cycles, raw material and energy price fluctuations, competition and other factors. Historically, our subsidiary, Globe Metallurgical, Inc., has been particularly affected by recessionary conditions in the end-markets for its products. In April 2003, Globe Metallurgical, Inc. sought protection under Chapter 11 of the United States Bankruptcy Code following its inability to restructure or refinance its indebtedness in light of the confluence of several negative economic and other factors, including an influx of low-priced, dumped imports, which caused it to default on then-outstanding indebtedness. A recurrence of such economic factors could have a material adverse effect on our business prospects, condition (financial or otherwise) and results of operations.

In calendar 2009, the global silicon metal industry suffered from unfavorable market conditions. The weakened economic environment of national and international metals markets that occurred during that time may return; any decline could have a material adverse effect on our business prospects, condition (financial or otherwise), and results of operations. In addition, our business is directly related to the production levels of our customers, whose businesses are dependent on highly cyclical markets, such as the automotive, residential and nonresidential construction, consumer durables, polysilicon, and chemical markets. In response to unfavorable market conditions, customers may request delays in contract shipment dates or other contract modifications. If we grant modifications, these could adversely affect our anticipated revenues and results of operations. Also, many of our products are internationally traded products with prices that are significantly affected by worldwide supply and demand. Consequently, our financial performance will fluctuate with the general economic cycle, which could have a material adverse effect on our business prospects, condition (financial or otherwise) and results of operations.

Our business is particularly sensitive to increases in energy costs, which could materially increase our cost of production.

Electricity is one of our largest production cost components, comprising approximately 23% of cost of goods sold. The level of power consumption of our submerged electric arc furnaces is highly dependent on which products are being produced and typically fall in the following ranges: (i) silicon-based alloys require between 3.5 and 8 megawatt hours to produce one MT of product and (ii) silicon metal requires approximately 11 megawatt hours to produce one MT of product. Accordingly, consistent access to low cost, reliable sources of electricity is essential to our business.

Electrical power to our U.S. and Canada facilities is supplied mostly by AEP, Alabama Power, Brookfield Power, Hydro Quebec, Tennessee Valley Authority and Niagara Mohawk Power Corporation through dedicated lines. Our Alloy, West Virginia facility obtains approximately 45% of its power needs under a 15-year fixed-price contract with a nearby dedicated hydroelectric facility. This facility is over 70 years old and any breakdown could result in the Alloy facility having to pay much higher rates for electric power from third parties. Our energy supply for our facilities located in Argentina is supplied through the Edemsa hydroelectric facilities located in Mendoza, Argentina. Our contract expired in October 2009; we are currently operating under a month-to-month arrangement and are negotiating a new contract. Because energy constitutes such a high percentage of our production costs, we are particularly vulnerable to cost fluctuations in the energy industry. Accordingly, the termination or non-renewal of any of our energy contracts, or an increase in the price of energy could materially adversely affect our future earnings, if any, and may prevent us from effectively competing in our markets.

Losses caused by disruptions in the supply of power would reduce our profitability.

Our operations are heavily dependent upon a reliable supply of electrical power. We may incur losses due to a temporary or prolonged interruption of the supply of electrical power to our facilities, which can be caused by unusually high demand, blackouts, equipment failure, natural disasters or other catastrophic events, including failure of the hydroelectric facilities that currently provide power under contract to our West Virginia, New York, Quebec and Argentina facilities. Large amounts of electricity are used to produce silicon metal and silicon-based alloys, and any interruption or reduction in the supply of electrical power would adversely affect production levels and result in reduced profitability. Our insurance coverage does not cover all events and may not be sufficient to cover any or all losses. Certain of our insurance policies will not cover any losses that may be incurred if our suppliers are unable to provide power during periods of unusually high demand.

Investments in Argentina’s electricity generation and transmission systems have been lower than the increase in demand in recent years. If this trend is not reversed, there could be electricity supply shortages as the result of inadequate generation and transmission capacity. Given the heavy dependence on electricity of our manufacturing operations, any electricity shortages could adversely affect our financial results.

Government regulations of electricity in Argentina give priority access of hydroelectric power to residential users and subject violators of these restrictions to significant penalties. This preference is particularly acute during Argentina’s winter months due to a lack of natural gas. We have previously successfully petitioned the government to exempt us from these restrictions given the demands of our business for continuous supply of electric power. If we are unsuccessful in our petitions or in any action we take to ensure a stable supply of electricity, our production levels may be adversely affected and our profitability reduced.

Any decrease in the availability, or increase in the cost, of raw materials or transportation could materially increase our costs.

Principal components in the production of silicon metal and silicon-based alloys include metallurgical-grade coal, charcoal, carbon electrodes, quartzite, wood chips, steel scrap, and other metals, such as magnesium. We buy some raw materials on a spot basis. We are dependent on certain suppliers of these products, their labor union relationships, mining and lumbering regulations and output and general local economic conditions, in order to obtain raw materials in a cost efficient and timely manner. An increase in costs of raw materials or transportation, or the decrease in their production or deliverability in a timely fashion, or other disruptions in production, could result in increased costs to us and lower productivity levels. We may not be able to obtain adequate supplies of raw materials from alternative sources on terms as favorable as our current arrangements or at all. Any increases in the price or shortfall in the production and delivery of raw materials, could materially adversely affect our business prospects, condition (financial or otherwise) or results of operation.

Cost increases in raw material inputs may not be passed on to our customers, which could negatively impact our profitability.

The availability and prices of raw material inputs may be influenced by supply and demand, changes in world politics, unstable governments in exporting nations and inflation. The market prices of our products and raw material inputs are subject to change. We may not be able to pass a significant amount of increased input costs on to our customers. Additionally, we may not be able to obtain lower prices from our suppliers should our sale prices decrease.

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Compliance with and changes in environmental laws, including proposed climate change laws and regulations, could adversely affect our performance.

The principal environmental risks associated with our operations are emissions into the air and releases into the soil, surface water, or groundwater. Our operations are subject to extensive foreign, federal, state, provincial and local environmental laws and regulations, including those relating to the discharge of materials into the environment, waste management, pollution prevention measures and greenhouse gas emissions. If we violate or fail to comply with these laws and regulations, we could be fined or otherwise sanctioned. Because environmental laws and regulations are becoming more stringent and new environmental laws and regulations are continuously being enacted or proposed, such as those relating to greenhouse gas emissions and climate change, the level of expenditures required for environmental matters could increase in the future. Future legislative action and regulatory initiatives could result in changes to operating permits, additional remedial actions, material changes in operations, increased capital expenditures and operating costs, increased costs of the goods we sell, and decreased demand for our products that cannot be assessed with certainty at this time.

Some of the proposed federal cap-and-trade legislation would require businesses that emit greenhouse gases to buy emission credits from the government, other businesses, or through an auction process. As a result of such a program, we may be required to purchase emission credits for greenhouse gas emissions resulting from our operations. Although it is not possible at this time to predict the final form of a cap-and-trade bill (or whether such a bill will be passed), any new restrictions on greenhouse gas emissions – including a cap-and-trade program – could result in material increased compliance costs, additional operating restrictions for our business, and an increase in the cost of the products we produce, which could have a material adverse effect on our financial position, results of operations, and liquidity.

We make a significant portion of our sales to a limited number of customers, and the loss of a portion of the sales to these customers could have a material adverse effect on our revenues and profits.

In the year ended June 30, 2012, we made approximately 45% of our consolidated net sales to our top ten customers and approximately 22% to our two top customers (10%, excluding sales made under our joint venture agreements with Dow Corning). We expect that we will continue to derive a significant portion of our business from sales to these customers. If we were to experience a significant reduction in the amount of sales we make to some or all of these customers and could not replace these sales with sales to other customers, it could have a material adverse effect on our revenues and profits.

Our U.S.-based businesses benefit from U.S. antidumping duties and laws that protect U.S. companies by taxing imports from foreign companies. If these laws change, foreign companies will be able to compete more effectively with us. Conversely, our foreign operations are adversely affected by these U.S. duties and laws.

Antidumping duties are currently in place covering silicon metal imports from China and Russia. The orders imposing these duties benefit our U.S. operations by constraining supply and increasing U.S. market prices and sales of domestic silicon metal. Rates of duty can change as a result of “administrative reviews” and “new shipper reviews” of antidumping orders. These orders can also be revoked as a result of periodic “sunset reviews,” which determine whether the orders will continue to apply to imports from particular countries. Although a sunset review of the order covering imports from China resulted in that order remaining in place for an additional five years, the current orders may not remain in effect and continue to be enforced from year to year, the goods and countries now covered by antidumping orders may no longer be covered, and duties may not continue to be assessed at the same rates. Changes in any of these factors could adversely affect our business and profitability. Finally, at times, in filing trade actions, we find ourselves acting against the interests of our customers. Some of our customers may not continue to do business with us because of our having filed a trade action. Antidumping rules may, conversely, also adversely impact our foreign operations.

The European Union, like the U.S., maintains an antidumping duty covering silicon metal imports from China. The duty was reduced in May 2010.

We may be unable to successfully integrate and develop our prior and future acquisitions.

We acquired six private companies between November 2006 and June 2011, and entered into a business combination in May 2008 and joint venture agreements in November 2009 and June 2012. We expect to acquire additional companies in the future. Integration of our prior and future acquisitions with our existing business is a complex, time-consuming and costly process requiring the employment of additional personnel, including key management and accounting personnel. Additionally, the integration of these acquisitions with our existing business may require significant financial resources that would otherwise be available for the ongoing development or expansion of existing operations. Unanticipated problems, delays, costs or liabilities may also be encountered in the development of these acquisitions. Failure to successfully and fully integrate and develop these businesses and operations may have a material adverse effect on our business, financial condition, results of operations and cash flows. The difficulties of combining the acquired operations include, among other things:

•  operating a significantly larger combined organization;

•  coordinating geographically disparate organizations, systems and facilities;

•   consolidating corporate technological and administrative functions;

•  integrating internal controls and other corporate governance matters;

•  the diversion of management’s attention from other business concerns;

•  unexpected customer or key employee loss from the acquired businesses;

•  hiring additional management and other critical personnel;

•  negotiating with labor unions;

•  a significant increase in our indebtedness; and

•  potential environmental or regulatory liabilities and title problems.

In addition, we may not realize all of the anticipated benefits from any prior and future acquisitions, such as increased earnings, cost savings and revenue enhancements, for various reasons, including difficulties integrating operations and personnel, higher and unexpected acquisition and operating costs, unknown liabilities, inaccurate reserve estimates and fluctuations in markets. If these benefits do not meet the expectations of financial or industry analysts, the market price of our shares may decline.

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We are subject to the risk of union disputes and work stoppages at our facilities, which could have a material adverse effect on our business.

Hourly workers at our Selma, Alabama facility are covered by a collective bargaining agreement with the Industrial Division of the Communications Workers of America, under a contract running through July 31, 2013. Hourly employees at our Alloy, West Virginia, Niagara Falls, New York and Bridgeport, Alabama facilities are covered by collective bargaining agreements with The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union under contracts running through April 27, 2014, July 29, 2014, and March 31, 2015, respectively. Our union employees in Argentina are working under a contract running through April 30, 2013. Our union employees in Canada are working under a contract running through April 2013. New labor contracts will have to be negotiated to replace expiring contracts from time to time. If we are unable to satisfactorily renegotiate those labor contracts on terms acceptable to us or without a strike or work stoppage, the effects on our business could be materially adverse. Any strike or work stoppage could disrupt production schedules and delivery times, adversely affecting sales. In addition, existing labor contracts may not prevent a strike or work stoppage, and any such work stoppage could have a material adverse effect on our business.

We are dependent on key personnel.

Our operations depend to a significant degree on the continued employment of our core senior management team. In particular, we are dependent on the skills, knowledge and experience of Alan Kestenbaum, our Executive Chairman, Jeff Bradley, our Chief Executive Officer and Chief Operating Officer, Malcolm Appelbaum, our Chief Financial Officer, and Stephen Lebowitz, our Chief Legal Officer. If these employees are unable to continue in their respective roles, or if we are unable to attract and retain other skilled employees, our results of operations and financial condition could be adversely affected. We currently have employment agreements with Alan Kestenbaum, Jeff Bradley, Malcolm Appelbaum and Stephen Lebowitz, each of which contains non-compete provisions. Such provisions may not be enforceable by us. Additionally, we are substantially dependent upon key personnel in our financial and information technology staff who enable us to meet our regulatory and contractual financial reporting obligations, including reporting requirements under our credit facilities.

Metals manufacturing is an inherently dangerous activity.

Metals manufacturing generally, and smelting, in particular, is inherently dangerous and subject to fire, explosion and sudden major equipment failure. This can and has resulted in accidents resulting in the serious injury or death of production personnel and prolonged production shutdowns. We have experienced fatal accidents and equipment malfunctions in our manufacturing facilities in recent years, including a fire at our Bridgeport, Alabama facility in November 2011, and may experience fatal accidents or equipment malfunctions again, which could materially affect our business and operations.

Our mining operations are subject to risks that are beyond our control, which could result in materially increased expenses and decreased production levels.

We mine coal and quartzite at underground and surface mining operations. Certain factors beyond our control could disrupt our mining operations, adversely affect production and shipments and increase our operating costs, such as: a major incident at the mine site that causes all or part of the operations of the mine to cease for some period of time; mining, processing and plant equipment failures and unexpected maintenance problems; changes in reclamation costs; and, adverse weather and natural disasters, such as heavy rains or snow, flooding and other natural events affecting operations, transportation or customers.  Federal or state regulatory agencies have the authority under certain circumstances following significant health and safety incidents, such as fatalities, to order a mine to be temporarily or permanently closed. If this occurred, we may be required to incur capital expenditures to re-open the mine. Environmental regulations could impose costs on our mining operations, and future regulations could increase those costs or add new costs or limit our ability to produce and sell coal. Our failure to obtain and renew permits necessary for our mining operations could negatively affect our business.

Unexpected equipment failures may lead to production curtailments or shutdowns.

Many of our business activities are characterized by substantial investments in complex production facilities and manufacturing equipment. Because of the complex nature of our production facilities, any interruption in manufacturing resulting from fire, explosion, industrial accidents, natural disaster, equipment failures or otherwise could cause significant losses in operational capacity and could materially and adversely affect our business and operations.

We depend on proprietary manufacturing processes and software. These processes may not yield the cost savings that we anticipate and our proprietary technology may be challenged.

We rely on proprietary technologies and technical capabilities in order to compete effectively and produce high quality silicon metals and silicon-based alloys. Some of these proprietary technologies that we rely on are:

•  computerized technology that monitors and controls production furnaces;

•  production software that monitors the introduction of additives to alloys, allowing the precise formulation of the chemical composition of products; and

•  flowcaster equipment, which maintains certain characteristics of silicon-based alloys as they are cast.

We are subject to a risk that:

•  we may not have sufficient funds to develop new technology and to implement effectively our technologies as competitors improve their processes;

•  if implemented, our technologies may not work as planned; and

•  our proprietary technologies may be challenged and we may not be able to protect our rights to these technologies.

Patent or other intellectual property infringement claims may be asserted against us by a competitor or others. Our intellectual property may not be enforceable, and it may not prevent others from developing and marketing competitive products or methods. An infringement action against us may require the diversion of substantial funds from our operations and may require management to expend efforts that might otherwise be devoted to operations. A successful challenge to the validity of any of our proprietary intellectual property may subject us to a significant award of damages, or we may be enjoined from using our proprietary intellectual property, which could have a material adverse effect on our operations.

We also rely on trade secrets, know-how and continuing technological advancement to maintain our competitive position. We may not be able to effectively protect our rights to unpatented trade secrets and know-how.

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We are subject to environmental, health and safety regulations, including laws that impose substantial costs and the risk of material liabilities.

We are subject to extensive foreign, federal, national, state, provincial and local environmental, health and safety laws and regulations governing, among other things, the generation, discharge, emission, storage, handling, transportation, use, treatment and disposal of hazardous substances; land use, reclamation and remediation; and the health and safety of our employees. We are also required to obtain permits from governmental authorities for certain operations. We may not have been and may not be at all times in complete compliance with such laws, regulations and permits. If we violate or fail to comply with these laws, regulations or permits, we could be subject to penalties, fines, restrictions on operations or other sanctions. Under these laws, regulations and permits, we could also be held liable for any and all consequences arising out of human exposure to hazardous substances or environmental damage we may cause or that relates to our operations or properties.

Under certain environmental laws, we could be required to remediate or be held responsible for all of the costs relating to any contamination at our or our predecessors’ past or present facilities and at third party waste disposal sites. We could also be held liable under these environmental laws for sending or arranging for hazardous substances to be sent to third party disposal or treatment facilities if such facilities are found to be contaminated. Under these laws we could be held liable even if we did not know of, or were not responsible for, such contamination, or even if we never owned or operated the contaminated disposal or treatment facility.

There are a variety of laws and regulations in place or being considered at the international, federal, regional, state and local levels of government that restrict or are reasonably likely to restrict the emission of carbon dioxide and other greenhouse gases. These legislative and regulatory developments may cause us to incur material costs if we are required to reduce or offset greenhouse gas emissions and may result in a material increase in our energy costs due to additional regulation of power generators.

Environmental laws are complex, change frequently and are likely to become more stringent in the future. Therefore, our costs of complying with current and future environmental laws, and our liabilities arising from past or future releases of, or exposure to, hazardous substances may adversely affect our business, results of operations and financial condition.

We operate in a highly competitive industry.

The silicon-based alloy and silicon metal markets are capital intensive and competitive. Our primary competitors are Elkem AS, owned by China National Bluestar Group Co. Ltd., Grupo Ferroatlantica S.L. and various producers in China. Our competitors may have greater financial resources, as well as other strategic advantages to maintain, improve and possibly expand their facilities; and as a result, they may be better positioned to adapt to changes in the industry or the global economy. The advantages that our competitors have over us could have a material adverse effect on our business. In addition, new entrants may increase competition in our industry, which could materially adversely affect our business. An increase in the use of substitutes for certain of our products also could have a material adverse effect on our financial condition and operations.

We have historically operated at near the maximum capacity of our operating facilities. Because the cost of increasing capacity may be prohibitively expensive, we may have difficulty increasing our production and profits.

Our facilities are able to manufacture, collectively, approximately 120,000 MT of silicon metal (excluding Dow Corning’s portion of the capacity of our Alloy, West Virginia plant and our Becancour, Quebec plant) and 120,000 MT of silicon-based alloys on an annual basis. Our ability to increase production and revenues will depend on expanding existing facilities or opening new ones. Increasing capacity is difficult because:

• adding new production capacity to an existing silicon plant to produce approximately 30,000 MT of metallurgical grade silicon would cost approximately $120,000,000 and take at least 12 to 18 months to complete once permits are obtained, which could take more than a year;

• a greenfield development project would take at least three to five years to complete and would require significant capital expenditure and environmental compliance costs; and

• obtaining sufficient and dependable power at competitive rates near areas with the required natural resources is difficult to accomplish.

We may not have sufficient funds to expand existing facilities or open new ones and may be required to incur significant debt to do so, which could have a material adverse effect on our business.

We are subject to restrictive covenants under credit facilities. These covenants could significantly affect the way in which we conduct our business. Our failure to comply with these covenants could lead to an acceleration of our debt.

We entered into credit facilities that contain covenants that, among other things, restrict our ability to sell assets; incur, repay or refinance indebtedness; create liens; make investments; engage in mergers or acquisitions; pay dividends, including to us; repurchase stock; or make capital expenditures. These credit facilities also require compliance with specified financial covenants, including minimum interest coverage and maximum leverage ratios. We cannot borrow under their credit facilities if the additional borrowings would cause them to breach the financial covenants. Further, a significant portion of our assets are pledged to secure indebtedness.

Our ability to comply with applicable covenants may be affected by events beyond our control. The breach of any of the covenants contained in the credit facility, unless waived, would be a default under the facility. This would permit the lenders to terminate their commitments to extend credit under, and accelerate the maturity of, the facility. The acceleration of debt could have a material adverse effect on our financial condition and liquidity. If we were unable to repay our debt to the lenders and holders or otherwise obtain a waiver from the lenders and holders, the lenders and holders could proceed against the collateral securing the credit facility and exercise all other rights available to them. We may not have sufficient funds to make these accelerated payments and may not be able to obtain any such waiver on acceptable terms or at all.

We have limitations on our ability to pay dividends.

Our revolving multi-currency credit facility limits dividends to shareholders in an amount not to exceed in any fiscal year 50% of net income during the immediately preceding fiscal year.

Our insurance costs may increase, and we may experience additional exclusions and limitations on coverage in the future.

We have maintained various forms of insurance, including insurance covering claims related to our properties and risks associated with our operations. Our existing property and liability insurance coverage contain exclusions and limitations on coverage. From time-to-time, in connection with renewals of insurance, we have experienced additional exclusions and limitations on coverage, larger self-insured retentions and deductibles and significantly higher premiums. As a result, in the future, our insurance coverage may not cover claims to the extent that it has in the past and the costs that we incur to procure insurance may increase significantly, either of which could have an adverse effect on our results of operations.

11

Solsil may never operate profitably or generate substantial revenues.

Solsil is currently focused on research and development projects and is not producing material for commercial sale. Although we expect to expand its operations through the construction of new facilities, its financial prospects are uncertain. Solsil’s anticipated growth, including the construction of new facilities, will require a commitment of significant financial resources that we may determine are not available given the expansion of other existing operations and continuing research and development efforts. In addition, Solsil’s anticipated growth will require a commitment of personnel, including key positions in management, that may not be available to us when needed. Unanticipated problems, construction delays, cost overruns, raw material shortages, environmental and/or governmental regulation, limited power availability or unexpected liabilities may also be encountered. Furthermore, Solsil’s expected future profitability is dependent on its ability to produce UMG at significantly larger scales than it currently can produce today and with commercially viable costs. Some of the other challenges we may encounter include:

•  technical challenges, including further improving Solsil’s proprietary metallurgical process;

•  increasing the size and scale of our operations on a cost-effective basis;

•  capitalizing on market demands and potentially rapid market supply and demand fluctuations;

•  continued acceptance by the market of our current and future products, including the use of UMG in the photovoltaic (solar) market;

•  a rapidly growing competitive environment with more new players entering the photovoltaic (solar) market;

•  alternative competing technologies; and

•  responding to rapid technological changes.

Failure to successfully address these and other challenges may hinder or prevent our ability to achieve our objectives in a timely manner, and may result in the impairment of assets currently used in Solsil’s production processes.

We have operations and assets in the U.S., Argentina, Canada, China and Poland, and may have operations and assets in other countries in the future. Our international operations and assets may be subject to various economic, social and governmental risks.

Our international operations and sales will expose us to risks that could negatively impact our future sales or profitability. Our operations may not develop in the same way or at the same rate as might be expected in a country with an economy similar to the United States. The additional risks that we may be exposed to in these cases include, but are not limited to:

•  tariffs and trade barriers;

•  currency fluctuations, which could decrease our revenues or increase our costs in U.S. dollars;

•  regulations related to customs and import/export matters;

•  tax issues, such as tax law changes and variations in tax laws;

•  limited access to qualified staff;

•  inadequate infrastructure;

•  cultural and language differences;

•  inadequate banking systems;

•  different and/or more stringent environmental laws and regulations;

•  restrictions on the repatriation of profits or payment of dividends;

•  crime, strikes, riots, civil disturbances, terrorist attacks or wars;

•  nationalization or expropriation of property;

•  law enforcement authorities and courts that are weak or inexperienced in commercial matters; and

•  deterioration of political relations among countries.

Our competitive strength as a low-cost silicon metal producer is partly tied to the value of the U.S. dollar compared to other currencies. The U.S. dollar has fluctuated significantly in value in comparison to major currencies in recent years. Should the value of the U.S. dollar rise in comparison to other currencies, we may lose this competitive strength.

Exchange controls and restrictions on transfers abroad and capital inflow restrictions have limited, and can be expected to continue to limit, the availability of international credit. In 2001 and 2002, Argentina imposed exchange controls and transfer restrictions substantially limiting the ability of companies to retain foreign currency or make payments abroad. These restrictions have been eased, although certain new controls were implemented in 2012. Argentina may re-impose more significant exchange control or transfer restrictions in the future, among other things, in response to capital flight or a significant depreciation of the Argentine peso. In addition, the government adopted various rules and regulations in June 2005 that established new controls on capital inflows, requiring, among other things, that 30% of all capital inflows (subject to certain exceptions) be deposited for one year in a non-assignable, noninterest bearing account in Argentina. Additional controls could have a negative effect on the economy and our Argentine business if imposed in an economic environment where access to local capital is substantially constrained. Moreover, in such event, restrictions on the transfers of funds abroad may impede our ability to receive dividend payments from our Argentine subsidiaries.

12

Our stock price may be volatile, and purchasers of our common stock could incur substantial losses.

Our stock price may be volatile. The stock market in general has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your common stock at or above the price at which you purchase the shares. The market price for our common stock may be influenced by many factors, including:

•  the success of competitive products or technologies;

•  regulatory developments in the United States and foreign countries;

•  developments or disputes concerning patents or other proprietary rights;

•  the recruitment or departure of key personnel;

•  quarterly or annual variations in our financial results or those of companies that are perceived to be similar to us;

•  market conditions in the industries in which we compete and issuance of new or changed securities analysts’ reports or recommendations;

•  the failure of securities analysts to cover our common stock or changes in financial estimates by analysts;

•  the inability to meet the financial estimates of analysts who follow our common stock;

•  investor perception of our company and of the industry in which we compete; and

•  general economic, political and market conditions.

The concentration of our capital stock ownership among our largest stockholders, and their affiliates, may limit your ability to influence corporate matters.

To the best of our knowledge, our four largest stockholders, including our Executive Chairman, together beneficially own approximately 37% of our outstanding common stock. Consequently, these stockholders have significant influence over all matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions. This concentration of ownership may limit your ability to influence corporate matters, and as a result, actions may be taken that you may not view as beneficial.

The issuance of dividends may or may not occur in the foreseeable future.

In August 2012, our Board of Directors approved an annual dividend of $0.25 per common share, payable quarterly in September 2012, December 2012, March 2013 and June 2013. The decision to pay dividends is at the discretion of our Board of Directors and depends on our financial condition, results of operations, capital requirements, financial covenants and other factors that our Board of Directors deems relevant. In the future, we intend to continue to consider declaring dividends on an annual basis, subject to reviewing our earnings and then current circumstances, but there is no guaranty that we will continue to issue dividends.

Provisions of our certificate of incorporation and by-laws could discourage potential acquisition proposals and could deter or prevent a change in control.

Some provisions in our certificate of incorporation and by-laws, as well as Delaware statutes, may have the effect of delaying, deferring or preventing a change in control. These provisions, including those providing for the possible issuance of shares of our preferred stock and the right of our Board of Directors to amend the bylaws, may make it more difficult for other persons, without the approval of the Board of Directors, to make a tender offer or otherwise acquire a substantial number of shares of our common stock or to launch other takeover attempts that a stockholder might consider to be in his or her best interest. These provisions could limit the price that some investors might be willing to pay in the future for shares of our common stock.

Our acquisition of exploration mining licenses in Nigeria involves a number of risks and uncertainties and may not be profitable.

During the fiscal year ended June 30, 2011, we made advances totaling approximately $17,000,000 to acquire exploration mining licenses in Nigeria to mine for manganese ore, a raw material used in the production of certain silicon and manganese based alloys. We intend to conduct geological and geophysical studies to ascertain the quality and quantity of manganese reserves on these sites. Until such evaluations are completed, the potential reserves associated with the mining licenses, as well as the capital and operating costs associated with the related extractive activities, are subject to considerable uncertainty.

We have no history of mining operations in Nigeria. Our future operations in Nigeria may be affected by changing economic, regulatory and political environments, which may impact our financial returns from projects in that country. The advancement of this project will require the operation of mines and the development of related infrastructure. In addition, if the price of manganese ore declines, if production costs increase, or recovery rates are lower than expected, or if applicable laws and regulations are adversely changed, we may never successfully establish mining operations, or any operations established may not achieve profitability.

Item 1B.                       Unresolved Staff Comments

None.

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Item 2. Properties

We believe our facilities are suitable and adequate for our business and current production requirements. The following tables describe our primary office space, manufacturing facilities and mining properties:

		Square		Number of					Business
Location of Facility	Purpose	Footage		Furnaces			Own/Lease		Segment Served
New York, New York	Office		13,958		—			Lease		Corporate
Beverly, Ohio	Manufacturing and other		273,377		5	*		Own		GMI
Selma, Alabama	Manufacturing and other		126,207		2			Own		GMI
Alloy, West Virginia	Manufacturing and other		1,063,032		5			Own		GMI
Niagara Falls, New York	Manufacturing and other		227,732		2			Own		GMI
Bridgeport, Alabama	Manufacturing and other		155,100		1			Own		GMI
Nevisdale, Kentucky	Manufacturing and other		723,096		—			Lease		GMI
Becancour, Canada	Manufacturing and other		2,619,000		3			Own		GMI
Mendoza, Argentina	Manufacturing and other		138,500		2			Own		Globe Metales
San Luis, Argentina	Manufacturing and other		59,200		—			Own		Globe Metales
Police, Poland	Manufacturing and other		43,951		—			Own		Other
Shizuishan, China	Manufacturing and other		227,192		—			**		Other

___________________________

*  Excludes Solsil’s seven smaller furnaces used to produce UMG for solar cell applications.

** We own the long-term land use rights for the land on which this facility is located. We own the building and equipment forming part of this facility.

			Business
Location of Mines	Product	Own/Lease	Segment Served
Alabama	Quartzite	Lease	GMI
Kentucky	Coal	Lease	GMI

Item 3. Legal Proceedings

In the ordinary course of our business, we are subject to periodic lawsuits, investigations, claims and proceedings, including, but not limited to, contractual disputes, employment, environmental, health and safety matters, as well as claims associated with our historical acquisitions and divestitures. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations, claims and proceedings asserted against us, we do not believe any currently pending legal proceeding to which we are a party will have a material adverse effect on our business, prospects, financial condition, cash flows, results of operations or liquidity.

Item 4. Mine Safety Disclosure

This information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulations S-K (17 CFR 229.104) is included in exhibit 95 to this report.

14

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Shares of our common stock are traded on the NASDAQ Global Select Market under the symbol “GSM.”

Price Range of Common Stock

Our shares began trading on the NASDAQ Global Select Market on July 30, 2009. The price range per share of common stock presented below represents the highest and lowest sales prices for our common stock on the NASDAQ Global Select Market during each quarter of the last two fiscal years.

	Fourth Quarter	Third Quarter	Second Quarter	First Quarter
Fiscal year 2012 price range per common share	11.41 – 15.15	12.25 – 16.66	12.44 – 18.40	13.66 – 25.67
Fiscal year 2011 price range per common share	20.25 – 24.38	16.85 – 23.64	14.20 – 17.92	9.80 – 14.18

Holders

As of August 21, 2012, there were approximately 22 holders of record of our common stock. The number of record holders does not include holders of shares in “street names” or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depositories.

Dividends and Dividend Policy

In August 2012, our Board of Directors approved an annual dividend of $0.25 per common share, payable quarterly in September 2012, December 2012, March 2013 and June 2013. The decision to pay dividends is at the discretion of our Board of Directors and depends on our financial condition, results of operations, capital requirements, financial covenants and other factors that our Board of Directors deems relevant. In the future, we intend to continue to consider declaring dividends on an annual basis, subject to reviewing our earnings and then current circumstances.

Sales of Unregistered Securities

The following is a summary of our transactions during the last three fiscal years, involving sales of our securities that were not registered under the Securities Act of 1933, as amended:

Between September 6, 2009 and October 2, 2009, we issued 1,574,529 shares of common stock in connection with the exercise of UPOs and 201,404 shares in connection with the exercise of outstanding warrants. These exercises resulted in proceeds of $1,497,000. The sales and issuances of shares to US persons pursuant to the exercise of UPOs and pursuant to the exercise of warrants were deemed to be exempt from registration under the Securities Act by virtue of Section 4(2) of the Securities Act as transactions by an issuer not involving any public offering. The sales and issuances of shares to non-US persons pursuant to the exercise of warrants were deemed to be exempt from registration under the Securities Act pursuant to Regulation S governing offers and sales made outside the United States.

Use of Proceeds

In August 2009, we closed on an initial public offering of 16,100,000 shares of our common stock at $7.00 per share. Of the shares offered, 5,600,000 shares were offered by us and 10,500,000 shares were offered by selling stockholders (which included 2,100,000 shares sold by the selling stockholders pursuant to the exercise of the underwriters’ over-allotment option). Total proceeds of the offering were $112,700,000, of which the selling stockholders received $68,355,000, net of underwriting discounts and commissions totaling $5,145,000, and we received $36,456,000, net of underwriting discounts and commissions totaling $2,744,000. In addition, we also recognized offering costs of $1,688,000. Net proceeds were utilized for the acquisition of Core Metals; the remaining proceeds were added to working capital.

Purchases of Equity Securities by the Issuer and Affiliated Purchaser

We did not repurchase any of our outstanding equity securities during the most recent quarter covered by this report.

Securities Authorized for Issuance Under Equity Compensation Plans

Plan Category	Number of securities to be issued upon exercise of outstanding options (a)	Weighted-average exercise price of outstanding options (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	4,365,397	$8.10	497,633
Equity compensation plans not approved by security holders	-	-	-
Total	4,365,397	$8.10	497,633

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Item 6. Selected Financial Data

The following tables summarize certain selected consolidated financial data, which should be read in conjunction with our consolidated financial statements and the notes thereto and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K. The selected consolidated financial data presented below for the fiscal years ended June 30, 2012, 2011, 2010, 2009 and 2008 are derived from our audited consolidated financial statements.

		Year Ended June 30,
		2012	2011	2010	2009	2008
		(Dollars in thousands, except per share data)
Statement of operations data:
Net sales	$	705,544	641,863	472,658	426,291	452,639
Cost of goods sold		552,873	488,018	390,093	330,036	351,918
Selling, general and administrative expenses		61,623	54,739	47,875	56,322	42,857
Research and development		127	87	200	1,394	901
Business interruption insurance recovery		(450)	-	-	-	-
Restructuring charges		-	-	(81)	1,711	-
(Gain) loss on sale of business		(54)	4,249	(19,715)	-	-
Goodwill and intangible asset impairment		-	-	-	69,704	-
Operating income (loss)		91,425	94,770	54,286	(32,876)	56,963
Interest and other (expense) income		(4,789)	(2,056)	521	(899)	(5,285)
Income (loss) before income taxes		86,636	92,714	54,807	(33,775)	51,678
Provision for (benefit from) income taxes		28,760	35,988	20,539	11,609	15,936
Net income (loss)		57,876	56,726	34,268	(45,384)	35,742
(Income) losses attributable to noncontrolling interest, net of tax		(3,306)	(3,918)	(167)	3,403	721
Net income (loss) attributable to Globe Specialty Metals, Inc.	$	54,570	52,808	34,101	(41,981)	36,463
Earnings (loss) per common share - basic	$	0.73	0.70	0.46	(0.65)	0.62
Earnings (loss) per common share - diluted	$	0.71	0.69	0.46	(0.65)	0.50
Cash dividends declared per common share	$	0.20	0.15	-	-	-

		June 30,	June 30,	June 30,	June 30,	June 30,
		2012	2011	2010	2009	2008
		(Dollars in thousands)
Balance sheet data:
Cash and cash equivalents	$	178,010	166,208	157,029	61,876	73,994
Total assets		936,747	678,269	607,145	473,280	548,174
Total debt, including current portion		140,703	48,083	41,079	59,613	89,205
Total stockholders' equity		603,799	515,276	458,829	311,352	346,237

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis together with “Selected Financial Data” and our consolidated financial statements and the notes to those statements included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based on our current expectations, assumptions, estimates and projections about us and our industry. These forward-looking statements involve assumptions, risks and uncertainties. Our actual results could differ materially from those indicated in these forward-looking statements as a result of certain factors, as more fully described in the “Risk Factors” section and elsewhere in this Annual Report on Form 10-K. We undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

Introduction

Globe Specialty Metals, Inc., together with its subsidiaries (collectively, GSM, we, or our) is one of the leading manufacturers of silicon metal and silicon-based alloys. As of June 30, 2012, we owned and operated seven principal manufacturing facilities, in two primary operating segments: GMI, our North American operations and, Globe Metales, our Argentine operations.

Business Segments

We operate in six reportable segments:

• GMI — a manufacturer of silicon metal and silicon-based alloys located in North America with plants in Beverly, Ohio, Alloy, West Virginia, Niagara Falls, New York, Selma, Alabama, Bridgeport, Alabama and Bécancour, Quebec and a provider of specialty metallurgical coal for the silicon metal and silicon-based alloys industries located in Corbin, Kentucky;

• Globe Metais — a distributor of silicon metal manufactured in Brazil. This segment includes the historical Brazilian manufacturing operations, comprised of a manufacturing plant in Breu Branco and mining operations and forest reserves, which were all sold on November 5, 2009. Subsequent to this divestiture, Globe Metais’ net sales relate only to the fulfillment of certain retained customer contracts, which were completed as of December 31, 2010;

• Globe Metales — a manufacturer of silicon-based alloys located in Argentina with a silicon-based alloys plant in Mendoza and a cored-wire fabrication facility in San Luis;

• Solsil — a developer and manufacturer of upgraded metallurgical grade silicon metal located in the United States with operations in Beverly, Ohio;

• Corporate — a corporate office including general expenses, investments, and related investment income; and

• Other — includes an electrode production operation in China (Yonvey) and a cored-wire production facility located in Poland. These operations do not fit into the above reportable segments, and are immaterial for purposes of separate disclosure.

Overview and Recent Developments

Customer demand remains strong for silicon metal and silicon-based alloys as our major end markets, which include chemicals, aluminum, automotive, steel and solar are showing improvement.  Spot pricing for silicon metal and silicon-based alloys remains good but declined modestly in the fiscal fourth quarter as European demand remains sluggish and competitors lowered prices.  The modest decline in silicon metal spot pricing served to reduce our average selling price due to the fact that approximately 30% of our annual contracts are priced based on indices and adjust quarterly.  The modest decline in silicon-based alloy pricing also affected our realized pricing as these products are priced on a quarterly basis. We continue to operate at full capacity and our end markets have excellent prospects for continued improvement. In our chemicals end market, which represents producers of silicones, the single largest application for silicon metal, the large manufacturers are performing well. Polysilicon production and solar cell demand is also continuing to grow, with new domestic production capacity coming on line, specifically two new plants being built in Tennessee, despite decreased pricing and a reduction in subsidies. Steel capacity utilization and auto production, two significant end markets, are both expected to grow, and auto-related aluminum production which uses the most silicon metal is also expected to increase. We are presently running all of the furnaces at our six primary plants at full capacity, subject to normal maintenance outages.

We closed on the acquisition of the silicon metal assets of Becancour Silicon Metal Inc. on June 13, 2012, including its 51% interest in Quebec Silicon Limited Partnership, a 47,000 metric ton silicon metal plant as well as certain other working capital assets.  Globe operates the silicon metal plant, consolidates the results, and purchases approximately 51% of the finished goods output at a price approximately equal to the fully loaded cost of production and sells the material to third party customers. Dow Corning Corporation (Dow Corning) has the right to purchase the other 49% of the plant's output at a price approximately equal to the fully loaded cost of production. This arrangement is similar to the Company's existing joint venture with Dow Corning at its Alloy, West Virginia plant. Globe believes that it can achieve meaningful cost reductions and operating efficiencies at the plant, primarily involving raw materials and should benefit Globe and Dow Corning.  We have already made certain improvements and cost reductions at the plant by providing Alden coal, reducing employee headcount and enhancing operating procedures.

Earlier in May we closed on a new $300,000,000 syndicated credit facility. The facility refinanced existing debt and closing costs of $96,550,000 and along with the Company’s cash balances, it can be used to finance acquisitions, growth initiatives, stock buy-backs, working capital and for general corporate purposes.  The facility is a revolving loan and does not require a borrowing base. It has a five-year term and at the current leverage ratio, carries an interest rate of LIBOR plus 1.75%. The loan has certain financial covenants, negative covenants and restrictions.

During our fiscal fourth quarter, we shipped approximately 10% more material than in the immediately preceding quarter.  Approximately half of this increase was related to the acquisition of Quebec Silicon in mid-June and half to the timing of existing customer shipments. Net sales for the fourth quarter increased $18,261,000 or 11%, from the preceding quarter as a result of the 10% increase in tons shipped partially offset by a 2% decrease in average selling prices. The average selling price decreased in the quarter due to a modest decline in silicon metal and silicon-based alloy spot pricing.  Other sales also increased in the quarter by $7,273,000 primarily due to the sale, at cost, of certain raw materials that were no longer required in production.

During the fourth quarter we incurred $3,765,000 of transaction-related and due diligence expenses, including $1,300,000 for the write-off of the Iceland prepaid expenses.  We had intended to build a silicon metal plant in Iceland but have instead written off the costs due to the current economic conditions in Europe and the lack of available financing.  We also wrote-off $1,600,000 of deferred financing expenses related to the refinancing of our prior debt by our new holding company $300,000,000 revolving credit facility. During the fourth quarter we lowered our per ton production costs by approximately 3%, for a saving of approximately $4,500,000, which effectively offset the modestly lower average selling prices in the quarter.

Income before provision for income taxes totaled $15,158,000 in the fourth quarter, which included the $3,765,000 of transaction expenses and $1,600,000 of deferred financing costs write-off. This compares to income before provision for income taxes in the third quarter of $18,238,000, which included $1,047,000 of transaction expenses.

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Outlook

We continue to see improving demand for our products as our end markets expand and we continue to operate at full capacity, subject to scheduled maintenance outages and unplanned downtime. As demand in Europe remains sluggish, prices for our products have declined modestly. However, in the fourth quarter we were able to successfully lower production costs which more than offset the effect of the lower pricing. We expect our average selling price of silicon metal and silicon-based alloys to remain relatively flat for the remainder of calendar 2012. Our silicon metal average selling price is based on our annual fixed price contracts, our annual index-based contracts which adjust each quarter based on spot pricing and our spot sales.  Silicon-based alloy pricing resets each quarter, and pricing is a function of overall supply and demand. Demand is largely derived from steel capacity utilization and auto production.

We expect an increase in tons sold in the first quarter of fiscal 2013 as a result of the first full quarter of Quebec Silicon results.  This should result in an increase in sales with a modest increase in gross margin.  However, this increase in gross margin could be more than offset by an expected $3,000,0000 shortfall caused by storm related power outages. In mid-June our Bridgeport, Alabama plant suffered an unplanned power outage related to storms and in early July our Alloy, West Virginia plant suffered two unplanned power outages related to storms.  Although the storms were very severe the plants did not suffer significant direct damage.  However, the plants ceased operations for several days and then took a few weeks to resume full production.  This caused a shortfall in expected production as well as higher costs.

Our Alden coal business continues to meet expectations as it supplies the majority of the coal needs for our plants and is expanding sales to third parties.  We expect Alden’s volumes to continue to grow and its cost per ton of production to decline.

We continue to pursue the business interruption insurance claim for the Bridgeport fire. We expect the final claim to be paid by the second quarter of fiscal 2013.

We are optimistic about our results for fiscal 2013 as we see shipments increasing, selling prices remaining stable and possibly increasing based on improving demand and cost of production declining.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from the estimates used under different assumptions or conditions.

Business Combinations

We have completed a number of significant business acquisitions. Our business strategy contemplates that we may pursue additional acquisitions in the future. When we acquire a business, the purchase price is allocated based on the fair value of tangible assets and identifiable intangible assets acquired, and liabilities assumed. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Goodwill as of the acquisition date is measured as the residual of the excess of the consideration transferred, plus the fair value of any noncontrolling interest in the acquiree at the acquisition date, over the fair value of the identifiable net assets acquired. We generally engage independent third-party appraisal firms to assist in determining the fair value of assets acquired and liabilities assumed. Such a valuation requires management to make significant estimates, especially with respect to intangible assets. These estimates are based on historical experience and information obtained from the management of the acquired companies. These estimates are inherently uncertain and may impact reported depreciation and amortization in future periods, as well as any related impairment of goodwill or other long lived assets.

Goodwill

At June 30, 2012, we had goodwill totaling $56,740,000. We annually review, in the third quarter of our fiscal year, goodwill for impairment. A review is also performed whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds the implied fair value of goodwill of the reporting unit. Fair value is measured based on a discounted cash flow method, using a discount rate determined by us to be commensurate with the risk inherent in our current business model, or a valuation technique based on multiples of earnings consistent with the objective of measuring fair value. The estimates of cash flows, future earnings, and discount rate are subject to change due to the economic environment and business trends, including such factors as raw material and product pricing, interest rates, expected market returns and volatility of markets served, as well as our future manufacturing capabilities, government regulation and technological change. We believe that the estimates of future cash flows, future earnings, and fair value are reasonable; however, changes in estimates, circumstances or conditions could have a significant impact on our fair valuation determination, which could then result in a material impairment charge in our results of operations.

During the third quarter of fiscal 2012, we performed the annual impairment testing. As of that date, all reporting units had fair values that exceeded carrying values and no impairment charge was required. In our year-end assessment, our forecasts for the Yonvey business unit included a reduction in production levels, testing of new raw materials and cost rationalization initiatives for the next fiscal year. Our Yonvey business unit had a calculated fair value that exceeded its carrying value by less than an amount we deem substantial. We are closely monitoring the operating plans of our Yonvey unit. If we do not meet our operating plans, we could incur a goodwill impairment charge of up to the carrying amount of $7,700,000.

Long-Lived Assets

At June 30, 2012, we had property, plant, and equipment, net of accumulated depreciation, depletion and amortization, totaling $432,761,000, including $18,935,000 associated with our Solsil business unit. Solsil is currently focused on research and development projects and is not producing material for commercial sale. We review the recoverability of our long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset or asset group from the expected future undiscounted pretax cash flows of the related operations.

We assess the recoverability of the carrying value of long-lived assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If these undiscounted cash flows are less than the carrying value of such asset or asset group, an impairment loss is measured based on the difference between estimated fair value and carrying value. Assets to be disposed are written down to the lower of carrying amount or fair value less costs to sell, and depreciation ceases. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. We believe that the estimates of future cash flows, future earnings, and fair value are reasonable; however, changes in estimates, circumstances or conditions, including the results of Solsil’s research and development activities, could have a significant impact on our fair valuation determination, which could then result in a material impairment charge in our results of operations.

18

Inventories

At June 30, 2012, we had inventories totaling $119,441,000. Inventories are valued at the lower of cost or market value, which does not exceed net realizable value. Cost of inventories is determined either by the first-in, first-out method or by the average cost method. When circumstances indicate a potential valuation issue, tests are performed to assess net realizable value, and as necessary, an inventory write-down is recorded for obsolete, slow moving or defective inventory. We estimate market and net realizable value based on current and future selling prices for our inventories, as well as the expected utilization of parts and supplies in our manufacturing process. We believe that these estimates are reasonable; however, changes in estimates or future price decreases caused by changing economic conditions, including customer demand, could result in future inventory adjustments, resulting in decreased operating profits and lower asset levels.

Share-Based Compensation

During the year ended June 30, 2012, we recorded share-based compensation expense of $2,482,000. Share-based payments (to the extent they are compensatory) are recognized in our consolidated statement of income based on their fair values. We have applied the provisions of the SEC’s Staff Accounting Bulletin No. 107 (SAB 107) in our accounting for share-based compensation. We are required to estimate the stock awards that we ultimately expect to vest and to reduce share-based compensation expense for the effects of estimated forfeitures of awards over the expense recognition period. Given our share-based compensation was granted under a new plan and that there is limited historical data, we have estimated a forfeiture rate of zero. Actual forfeitures in the future may differ from this estimate, which would favorably impact our future results from operations.

We estimate the fair value of employee stock options using a Black-Scholes valuation model. Our common stock is currently traded on the NASDAQ Global Select Market (effective July 29, 2009). Accordingly, for stock awards granted subsequent to July 29, 2009, we value our common stock based upon the closing price of our common stock on the NASDAQ Global Select Market on the date immediately preceding the date of grant. Prior to July 29, 2009, our common stock was traded on the AIM market of the London Stock Exchange, and we valued our common stock based upon the closing price of our common stock on the AIM market on the date immediately preceding the date of grant. The fair value of an award is affected by our closing stock price as well as other assumptions, including the estimated volatility over the term of the awards and the estimated period of time that we expect employees to hold their stock options, which is calculated using the simplified method allowed by SAB 107. As there is limited trading data related to our common stock, the expected volatility over the expected vesting term of our share-based compensation is based upon the historical volatilities of similar companies. The risk-free interest rate assumption we use is based upon United States Treasury interest rates appropriate for the expected life of the award. Our expected dividend rate for grants prior to June 30, 2010 was zero as we did not pay cash dividends on our common stock and did not anticipate doing so. Actual results could differ from these estimates, which would impact our results from operations.

Income Taxes

We recorded a provision for income taxes of $28,760,000 during the year ended June 30, 2012. As part of the process of preparing consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we conduct business. This process involves estimating actual current tax expense and temporary differences between tax and financial reporting. Temporary differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheet. We must assess the likelihood that deferred tax assets will be realized. A valuation allowance is recognized to reduce deferred tax assets if, and to the extent that, it is more likely than not that all or some portion of the deferred tax assets will not be realized. The determination of the need for a valuation allowance is based on an on-going evaluation of current information including, among other things, estimates of future earnings in different tax jurisdictions and the expected timing of deferred income tax asset and liability reversals. We believe that the determination to record a valuation allowance to reduce deferred income tax assets is a critical accounting estimate because it is based, in part, on an estimate of future taxable income in the various tax jurisdictions in which we do business, which is susceptible to change and may or may not occur, as well as the estimated timing of the reversal of temporary differences, which give rise to our deferred income tax assets, and because the impact of adjusting a valuation allowance may be material. In the event that actual results differ from estimates in future periods, and depending on the tax strategies that we may be able to implement, changes to the valuation allowance could impact our financial position and results of operations.

As part of our accounting for business combinations, some of the purchase price is allocated to goodwill and intangible assets. Amortization expense associated with acquired intangible assets is generally not tax deductible; however, deferred taxes have been recorded for non-deductible amortization expense as a part of the purchase price allocation process. We have taken into account the allocation of these identified intangibles among different taxing jurisdictions in establishing the related deferred tax liabilities. Income tax contingencies existing as of the acquisition dates of the acquired companies are evaluated quarterly and any adjustments are recorded as adjustments to income tax expense. Prior to our adoption of Accounting Standards Codification Subtopic 805-10, Business Combinations, on July 1, 2009, such adjustments were recorded to (a) reduce to zero any goodwill related to the acquisition, (b) reduce to zero other noncurrent intangible assets related to the acquisition, and (c) reduce income tax expense.

We recognize an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the relevant taxing authority that has full knowledge of all relevant information, based on the technical merits of the position. The income tax position is measured at the largest amount of benefit that is more than 50% likely of being realized upon settlement with a taxing authority. The determination of an uncertain tax position and the likelihood of it being realized requires critical judgment and estimates. We carefully assess each of the uncertain tax positions in order to determine the tax benefit that can be recognized in the consolidated financial statements. We record and/or disclose such potential tax liabilities, as appropriate, and reasonably estimate our income tax liabilities and recoverable tax assets. If new information becomes available, adjustments will be charged against income at that time. We do not anticipate that such adjustments would have a material adverse effect on our consolidated financial position or liquidity; however, it is possible that the final outcomes could have a material impact on our reported results of operations.

Results of Operations

Our results of operations are affected by our recent acquisitions of Alden Resources on July 28, 2011 and Quebec Silicon on June 13, 2012. Accordingly, our results for the year ended June 30, 2012 include approximately eleven months of results from Alden Resources and seventeen days of results from Quebec Silicon. Additionally, we sold the manufacturing operations of Globe Metais in November 2010, but continued to sell a portion of the silicon metal produced by Globe Metais to fulfill commitments to customers of Globe Metais that we retained until December 31, 2010.

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GSM Fiscal Year Ended June 30, 2012 vs. 2011

Consolidated Operations:

			Years Ended
			June 30,		Increase	Percentage
			2012	2011	(Decrease)	Change
			(Dollars in thousands)
Results of Operations
Net sales		$	705,544	641,863	63,681	9.9%
Cost of goods sold			552,873	488,018	64,855	13.3%
Selling, general and administrative expenses			61,623	54,739	6,884	12.6%
Research and development			127	87	40	46.0%
Business interruption insurance recovery			(450)	-	(450)	NA
(Gain) loss on sale of business			(54)	4,249	(4,303)	NA
	Operating income		91,425	94,770	(3,345)	(3.5%)
Interest expense, net			(7,367)	(2,984)	(4,383)	146.9%
Other income			2,578	928	1,650	177.8%
	Income before provision for income taxes		86,636	92,714	(6,078)	(6.6%)
Provision for income taxes			28,760	35,988	(7,228)	(20.1%)
	Net income		57,876	56,726	1,150	2.0%
Income attributable to noncontrolling interest, net of tax			(3,306)	(3,918)	612	(15.6%)
	Net income attributable to Globe Specialty Metals, Inc.	$	54,570	52,808	1,762	3.3%

Net Sales:

		Year Ended June 30, 2012					Year Ended June 30, 2011
		Net Sales					Net Sales
		$ (in 000s)	MT		$/MT		$ (in 000s)	MT		$/MT
Silicon metal	$	360,726	119,634	$	3,015	$	347,599	122,607	$	2,835
Silicon-based alloys		269,919	113,468		2,379		236,607	110,868		2,134
Silicon metal and silicon-based alloys		630,645	233,102		2,705		584,206	233,475		2,502
Silica fume and other		74,899					57,657
Total net sales	$	705,544				$	641,863

Net sales increased $63,681,000, or 10%, from the prior year to $705,544,000 primarily as a result of an 8% increase in average selling prices.  The increase in average selling prices resulted in an increase in net sales of $49,316,000, with a 6% and 12% increase in selling prices of silicon metal and silicon-based alloys, respectively.  The increase in silicon metal pricing was primarily driven by higher pricing of calendar 2012 contracts as compared to calendar 2010 contracts, as well as improved spot pricing in fiscal year 2012.  The increase in silicon-based alloys pricing was primarily due to an increase in magnesium ferrosilicon pricing, resulting from strong demand from the automotive industry, and a pass through of higher rare earth costs.  Ferrosilicon pricing improved as demand improved from the steel industry and the sale of higher purity and specialty grades of ferrosilicon.

Metric tons sold remained flat year-over-year.  There was a 2% decrease in silicon metal tons sold offset by a 2% increase in silicon-based alloys tons sold.  The decline in silicon metal tons was primarily due to the timing of the sale of our Brazilian manufacturing operations on November 5, 2009. Subsequent to this divestiture, remaining Globe Metais sales related only to the fulfillment of certain retained customer contracts completed at the end of the second quarter of fiscal year 2011, and no further sales will be made under this arrangement.  The silicon volume decrease was partially offset by the acquisition of Quebec Silicon on June 13, 2012 which contributed 2,010 tons during fiscal year 2012.  Silicon-based alloys tons sold increased primarily due to demand from the automotive and steel industries.

Other revenue increased by $17,242,000 primarily due to third party coal sales from the acquisition of Alden and the sale of manganese ore, which was purchased as a raw material and ultimately not used in production.

Cost of Goods Sold:

The $64,855,000 or 13% increase in cost of goods sold was a result of a 13% increase in our cost per ton sold and the increase in by-product and other sales. The increase in cost per ton sold reflects the impact of the planned maintenance performed on six of our fourteen domestic furnaces, the costs associated with the fire at our Bridgeport, Alabama ferrosilicon facility, and the impact of higher raw material and production costs year over year.

Gross margin represented approximately 22% of net sales in fiscal year 2012 and decreased from 24% of net sales in fiscal year 2011. The decrease was mainly attributable to higher production costs related to the planned maintenance outages, the fire at our Bridgeport, Alabama facility and the recognition of $9,400,000 in previously deferred revenue in the prior year period.  This was offset by an increase in average selling prices year over year.

Selling, General and Administrative Expenses:

The increase in selling, general and administrative expenses of $6,884,000 or 13% was primarily due to an increase in bonus expense of $2,691,000 due to higher profitability year over year, higher due diligence and transaction related expenses of $2,308,000, and the impact of acquisitions which increased expense by $2,152,000 and $254,000 for Alden and Quebec Silicon, respectively.  These increases were offset by a $828,000 decrease in stock-based compensation expense due to the completion of the vesting of options granted during fiscal year 2009.

(Gain)/Loss on Sale of Business:

(Gain) loss on sale of business for fiscal years 2012 and 2011 was associated with settlements related to the sale of our Brazilian manufacturing operations on November 5, 2009.

Business Interruption Insurance Recovery:

In fiscal year 2012, we recognized business interruption proceeds of $450,000.

20

Net Interest Expense:

Net interest expense increased by $4,383,000 mainly attributable to a new term loan acquired to finance the Alden Resources acquisition during the first quarter of fiscal 2012, which led to an increase in net interest expense of approximately $2,047,000. The Company’s senior credit facility and term loan were repaid and cancelled on May 31, 2012 and the associated deferred financing costs of approximately $1,600,000 were charged to interest expense in the fourth quarter of fiscal year 2012. Additionally, interest expense on the revolving credit facility increased as a result of a higher average outstanding balance year over year.

Other Income:

Other income increased by $1,650,000 primarily due to foreign exchange gains resulting from the revaluation of long-term reais denominated liabilities, partially offset by foreign exchange losses due to currency fluctuations associated with the Polish Zloty, Chinese Renminbi, and Euro.

Provision for Income Taxes:

Provision for income taxes as a percentage of pre-tax income was approximately 33% or $28,760,000 in fiscal year 2012 and was approximately 39% in fiscal year 2011.  The decrease in effective tax rate is primarily due to reduced state taxes and reduced foreign losses which are not deductible for tax purposes..

Segment Operations

GMI

			Years Ended
			June 30,		Increase	Percentage
			2012	2011	(Decrease)	Change
			(Dollars in thousands)
Results of Operations
Net sales		$	631,495	549,418	82,077	14.9%
Cost of goods sold			499,859	422,775	77,084	18.2%
Selling, general and administrative expenses			28,544	22,958	5,586	24.3%
Business interruption insurance recovery			(450)	-	(450)	NA
	Operating income	$	103,542	103,685	(143)	(0.1%)

Net sales increased $82,077,000 or 15% from the prior year to $631,495,000.  The increase was primarily attributable to an 8% increase in our average selling price and a 3% increase in metric tons sold.  The average selling price for silicon metal increased 5% and was primarily due to higher pricing of the annual calendar 2012 contracts versus calendar 2010 contracts, and improved spot pricing in fiscal year 2012.  The average selling pricing for silicon-based alloys increased 14% primarily due to an increase in magnesium ferrosilicon pricing driven by strong demand from the automotive industry, a pass through of higher rare earth costs and an increase in ferrosilicon pricing as demand improved from the steel industry.  Silicon metal volume increased 3% primarily due to the acquisition of Quebec Silicon which contributed 2,010 tons in fiscal year 2012, and improved operating performance of our furnaces.  Silicon-based alloy volume increased 2% primarily due to demand from the steel industry and timing of shipments.

Operating income decreased by $143,000 from the prior fiscal year to $103,542,000.  This decrease is primarily due to an 18% increase in cost of goods sold on a 3% increase in tons sold.  Cost of goods sold increased due to the impact of the fire at our Bridgeport, Alabama facility, planned major maintenances, higher rare earth costs year over year, and the acquisition of Quebec Silicon.  These cost increases were partially offset by the impact of $4,300,000 of expense related to the satisfaction of the long-term supply contract in the second quarter of fiscal year 2011 and an 8% increase in average selling prices. Additionally, selling, general and administrative expenses increased as a result of acquisitions during fiscal year 2012 which contributed $2,152,000 and $254,000 for Alden and Quebec Silicon, respectively.

Globe Metais

			Years Ended
			June 30,		Increase	Percentage
			2012	2011	(Decrease)	Change
			(Dollars in thousands)
Results of Operations
Net sales		$	-	15,421	(15,421)	(100.0%)
Cost of goods sold			-	14,948	(14,948)	(100.0%)
Selling, general and administrative expenses			2	76	(74)	(97.4%)
	Operating (loss) income	$	(2)	397	(399)	(100.5%)

Net sales decreased $15,421,000 from the prior year to $0.  The decrease was due to the timing of the sale of our Brazilian manufacturing operations on November 5, 2009.  Subsequent to this divestiture, remaining Globe Metais sales related only to the fulfillment of certain retained customer contracts with product purchased from our former Brazilian manufacturing operations at a purchase price equal to our sales price.  These customer contracts were fulfilled at the end of the second quarter of fiscal year 2011, and no further sales will be made under this arrangement.

Operating income decreased by $399,000 from the prior year to a loss of $2,000.  The decrease was due to the timing of the sale of our Brazilian manufacturing operations.  Selling, general and administrative expenses decreased by $74,000 primarily due to the timing of the sale of our Brazilian manufacturing operations on November 5, 2009.

21

Globe Metales

			Years Ended
			June 30,		Increase	Percentage
			2012	2011	(Decrease)	Change
			(Dollars in thousands)
Results of Operations
Net sales		$	64,063	62,321	1,742	2.8%
Cost of goods sold			49,084	45,316	3,768	8.3%
Selling, general and administrative expenses			3,647	3,808	(161)	(4.2%)
	Operating income	$	11,332	13,197	(1,865)	(14.1%)

Net sales increased $1,742,000, or 3%, from the prior year to $64,063,000. This increase was primarily attributable to a 6% increase in average selling prices, partially offset by a 4% decrease in metric tons sold. Pricing increased on magnesium ferrosilicon and cored wire due to a pass through of higher rare earth costs and a mix shift to higher priced specialty cored wire formulations. Volumes decreased on shipments of magnesium ferrosilicon and calcium silicon due to a slowing of European demand, partially offset by increasing demand from the automotive sector.

Operating income decreased by $1,865,000 from the prior year to $11,332,000. The decrease was primarily due to higher production costs, partially offset by higher selling prices. Cost of goods sold increased by 8% while volumes decreased 4%, primarily due to higher power and raw material costs, and higher payroll related expenses.

Solsil

			Years Ended
			June 30,		Increase	Percentage
			2012	2011	(Decrease)	Change
			(Dollars in thousands)
Results of Operations
Net sales		$	-	9,420	(9,420)	(100.0%)
Cost of goods sold			526	488	38	7.8%
Selling, general and administrative expenses			331	175	156	89.1%
Research and development			127	87	40	46.0%
	Operating (loss) income	$	(984)	8,670	(9,654)	(111.3%)

Net sales decreased from $9,420,000 in the prior year to $0.  This decrease was due to the recognition of $9,400,000 in previously deferred revenue as the BP Solar technology license, joint development and supply agreement was terminated during the second quarter of fiscal year 2011.

Operating income decreased by $9,654,000 from the prior year to a loss of $984,000.  The primary driver of this decrease was the recognition of $9,400,000 in previously deferred revenue as the BP Solar technology license, joint development and supply agreement was terminated during the second quarter of fiscal year 2011.

Corporate

			Years Ended
			June 30,		Increase	Percentage
			2012	2011	(Decrease)	Change
			(Dollars in thousands)
Results of Operations
Selling, general and administrative expenses		$	27,322	25,357	1,965	7.7%
(Gain) loss on sale of business			(54)	4,249	(4,303)	NA
	Operating loss	$	(27,268)	(29,606)	2,338	(7.9%)

Operating loss decreased by $2,338,000 from the prior year to $27,268,000.  Selling, general and administrative expenses increased by $1,965,000 year over year mainly attributable to an increase in bonus expense of $2,130,000, due to profitability improvement and an increase in transaction related expenses of  approximately $2,308,000, partially offset by a decrease of $828,000 in stock based compensation expense primarily due to the completion of vesting of options granted during 2009.

(Gain) loss on sale of business for fiscal years 2012 and 2011 was associated with settlements related to the sale of our Brazilian manufacturing operations on November 5, 2009.

22

GSM Fiscal Year Ended June 30, 2011 vs. 2010

Consolidated Operations:

			Years Ended
			June 30,		Increase	Percentage
			2011	2010	(Decrease)	Change
			(Dollars in thousands)
Results of Operations
Net sales		$	641,863	472,658	169,205	35.8%
Cost of goods sold			488,018	390,093	97,925	25.1%
Selling, general and administrative expenses			54,739	47,875	6,864	14.3%
Research and development			87	200	(113)	(56.5%)
Restructuring charges			—	(81)	81	NA
Loss (gain) on sale of business			4,249	(19,715)	23,964	NA
	Operating income		94,770	54,286	40,484	74.6%
Interest expense, net			(2,984)	(4,054)	1,070	(26.4%)
Other income			928	4,575	(3,647)	(79.7%)
	Income before provision for income taxes		92,714	54,807	37,907	69.2%
Provision for income taxes			35,988	20,539	15,449	75.2%
	Net income		56,726	34,268	22,458	65.5%
Income attributable to noncontrolling interest, net of tax			(3,918)	(167)	(3,751)	2,246.1%
	Net income attributable to Globe Specialty Metals, Inc.	$	52,808	34,101	18,707	54.9%

Net Sales:

		Year Ended June 30, 2011					Year Ended June 30, 2010
		Net Sales					Net Sales
		$ (in 000s)	MT		$/MT		$ (in 000s)	MT		$/MT
Silicon metal	$	347,599	122,607	$	2,835	$	296,763	118,327	$	2,508
Silicon-based alloys		236,607	110,868		2,134		148,092	76,144		1,945
Silicon metal and silicon-based alloys		584,206	233,475		2,502		444,855	194,471		2,288
Silica fume and other		57,657					27,803
Total net sales	$	641,863				$	472,658

Net sales increased $169,205,000, or 36%, from the prior year to $641,863,000 primarily as a result of a 20% increase in metric tons sold and a 9% increase in our average selling price. The increase in metric tons sold resulted in an increase in net sales of $78,269,000. Silicon metal volume sold was higher due to increased demand, which led us to reopen our Niagara Falls, New York facility in November 2009, which contributed approximately 7,900 incremental metric tons, and our Selma, Alabama facility in January 2010, which contributed approximately 11,500 incremental metric tons sold during fiscal year 2011. These increases were offset by the decrease in volume due to the timing of the sale of our Brazilian manufacturing operations on November 5, 2009. Subsequent to this divestiture, remaining Globe Metais sales related only to the fulfillment of certain retained customer contracts with product purchased from our former Brazilian manufacturing operations at a purchase price equal to our sales price. These customer contracts were fulfilled at the end of the second quarter of fiscal year 2011, and no further sales will be made under this arrangement. The increase in volume includes the impact of the Core Metals acquisition, which contributed approximately 25,397 incremental metric tons in fiscal year 2011 versus fiscal year 2010. Additionally, end market demand for ferrosilicon and magnesium ferrosilicon increased in fiscal year 2011 due to the economic recovery, particularly in steel and automotive production.

The increase in average selling price of 9% resulted in increased net sales of approximately $61,082,000. The increase in pricing was primarily due to higher pricing of the annual calendar 2011 contracts and higher spot pricing. The increase in pricing was also due to improved demand from the economic recovery, offset by the impact of the acquisition of Core Metals in the fourth quarter of fiscal year 2010, which resulted in a mix shift towards the production of ferrosilicon. Ferrosilicon is our lowest priced alloy and also has the lowest cost of production. Other revenue increased by $29,854,000 as a result of $13,956,000 of incremental other sales from Core Metals during fiscal year 2011 and the recognition of $9,400,000 in previously deferred revenue from Solsil as the technology license, joint development and supply agreement with BP Solar International Inc. (BP Solar) was terminated in the second quarter of fiscal year 2011.

Cost of Goods Sold:

The $97,925,000, or 25%, increase in cost of goods sold was a result of a 20% increase in metric tons sold, as well as a 4% increase in our cost per ton sold. This increase in cost per ton sold was primarily due to the impact of planned furnace maintenance outages at GMI and Core Metals, higher power rates at Globe Metales and GMI, and $4,300,000 of expense related to satisfaction of the long-term supply contract in fiscal year 2011. These cost increases were partially offset by the impact of reduced start-up costs of approximately $6,500,000 at our Niagara Falls and Selma plants in the year over year period, the mix shift to ferrosilicon, which has our lowest cost of production, and the timing of the sale of our Brazilian manufacturing operations on November 5, 2009.

Gross margin represented approximately 24% of net sales in fiscal year 2011 and increased from 17% of net sales in fiscal year 2010, primarily as a result of higher silicon metal and silicon-based alloy selling prices, partially offset by higher power costs at Globe Metales and GMI, as well as the impact of reduced margins on the sale of product purchased from our former Brazilian manufacturing operations.

Selling, General and Administrative Expenses:

The increase in selling, general and administrative expenses of $6,864,000, or 14%, was primarily a result of the impact of the acquisition of Core Metals, which incrementally increased expense by $2,458,000, and an increase in due diligence and transaction-related costs and audit and other professional fees, including Sarbanes-Oxley Act compliance related expenditures, of approximately $4,369,000 and $576,000, respectively, at Corporate. Additionally, bonus expense at Corporate increased approximately $1,794,000 due to profitability improvement year over year. These cost increases were partially offset by a decrease of approximately $2,488,000 at Globe Metais due to the timing of the sale of our Brazilian manufacturing operations.

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Loss (Gain) on Sale of Business:

Loss (gain) on sale of business for fiscal year 2010 was associated with the sale of our Brazilian manufacturing operations on November 5, 2009. A subsequent settlement associated with our Brazilian manufacturing operations was recorded in fiscal year 2011.

Net Interest Expense:

Net interest expense decreased by $1,070,000 primarily due to lower interest rate swap expense of approximately $755,000 at GMI, as well as the timing of the sale of our Brazilian manufacturing operations on November 5, 2009, which resulted in a reduction in net interest expense of $347,000.

Other Income:

Other income decreased by $3,647,000 due primarily to a foreign exchange gain of $3,773,000 at Globe Metais in fiscal year 2010. The foreign exchange gain at Globe Metais consisted of foreign exchange gains of $2,924,000, primarily associated with the revaluation of long-term reais denominated tax liabilities, and a gain of $849,000 on our foreign exchange forward contracts. These foreign exchange fluctuations no longer occur following the sale of our Brazilian manufacturing operations on November 5, 2009.

Provision for Income Taxes:

Provision for income taxes as a percentage of pre-tax income was approximately 39%, or $35,988,000, in fiscal year 2011 and was approximately 37%, or $20,539,000, in fiscal year 2010. The increase in the effective tax rate is primarily due  to the benefit associated with the recording of certain state tax credits partially offset by the recognition of $9,395,000 in income tax expense associated with the sale of our Brazilian manufacturing operations in fiscal year 2010.

Segment Operations

GMI

			Years Ended
			June 30,		Increase	Percentage
			2011	2010	(Decrease)	Change
			(Dollars in thousands)
Results of Operations
Net sales		$	549,418	358,279	191,139	53.3%
Cost of goods sold			422,775	296,122	126,653	42.8%
Selling, general and administrative expenses			22,958	21,112	1,846	8.7%
Restructuring charges			—	(81)	81	NA
	Operating income	$	103,685	41,126	62,559	152.1%

Net sales increased $191,139,000, or 53%, from the prior year to $549,418,000. The increase was primarily attributable to a 35% increase in metric tons sold. Volume was higher primarily due to increased demand, which led us to reopen our Niagara Falls, New York facility in November 2009, which contributed approximately 7,900 incremental metric tons, and our Selma, Alabama facility in January 2010, which contributed approximately 11,500 incremental metric tons sold during fiscal year 2011. Volume was also higher due to the acquisition of Core Metals and an increase in end market demand, primarily from the steel and automotive industries for ferrosilicon and magnesium ferrosilicon in fiscal year 2011. The Core Metals acquisition contributed approximately 25,397 incremental metric tons in fiscal year 2011. Pricing increased 12% due to higher pricing of the annual calendar 2011 contracts and improved spot pricing in fiscal year 2011, offset by the impact of the Alloy joint venture pricing. As a result of the acquisition of Core Metals in the fourth quarter of fiscal year 2010, there was a product mix shift towards ferrosilicon, which is our lowest priced alloy and also has the lowest cost of production. This impact was offset by higher pricing on ferrosilicon and magnesium ferrosilicon products due to increased market demand.

The GMI segment includes the Alloy joint venture, which was entered into on November 5, 2009, and sells 49% of the output of the Alloy plant to Dow Corning Corporation (Dow Corning) at cost. We control the joint venture and consolidate its results in our financial statements. As a result of the joint venture, GMI’s gross margin has been negatively impacted by virtue of the material sold to Dow Corning at cost. The increase in pricing for silicon metal during fiscal year 2011 more than offset this impact and resulted in increased gross margin year over year.

Operating income increased by $62,559,000 from the prior year to $103,685,000. This increase was primarily due to higher volumes shipped of silicon-based alloys and silicon metal and higher average selling prices for silicon metal. Cost of goods sold increased by 43%, while volumes increased by only 35%. This was a result of an increase in the cost per ton sold due to the impact of planned furnace maintenance outages, higher power rates, and $4,300,000 of expense related to satisfaction of the long-term supply contract in fiscal year 2011, offset by the impact of reduced start-up costs of approximately $6,500,000 at our Niagara Falls and Selma plants in the year over year period. The addition of Core Metals incrementally contributed $2,458,000 to selling, general and administrative expenses in fiscal year 2011.

Globe Metais

			Years Ended
			June 30,		Increase	Percentage
			2011	2010	(Decrease)	Change
			(Dollars in thousands)
Results of Operations
Net sales		$	15,421	62,126	(46,705)	(75.2%)
Cost of goods sold			14,948	53,091	(38,143)	(71.8%)
Selling, general and administrative expenses			76	2,564	(2,488)	(97.0%)
Research and development			—	11	(11)	NA
Loss on sale of business			—	1,197	(1,197)	NA
	Operating income	$	397	5,263	(4,866)	(92.5%)

24

Net sales decreased $46,705,000, or 75%, from the prior year to $15,421,000. The decrease was primarily attributable to a decrease in metric tons sold of 69% and a decrease in average selling prices of 17%. The decrease in volume was due to the timing of the sale of our Brazilian manufacturing operations on November 5, 2009. Subsequent to this divestiture, remaining Globe Metais sales related only to the fulfillment of certain retained customer contracts with product purchased from our former Brazilian manufacturing operations at a purchase price equal to our sales price. These customer contracts were fulfilled at the end of the second quarter of fiscal year 2011, and no further sales will be made under this arrangement. The decrease in pricing was due to the year over year currency impact of Euro denominated contracts.

Operating income decreased by $4,866,000, or 93%, from the prior year to $397,000. The decrease was primarily due to the timing of the sale of our Brazilian manufacturing operations, which led to lower sales volumes, as well as the impact of reduced margins on the sale of product purchased from our former Brazilian manufacturing operations. Selling, general and administrative expenses decreased by $2,488,000 primarily due to the timing of the sale of our Brazilian manufacturing operations on November 5, 2009. Results in fiscal year 2010 also included transaction costs of $1,197,000 associated with the sale of the Brazilian manufacturing operations.

Globe Metales

			June 30,		Increase	Percentage
			2011	2010	(Decrease)	Change
			(Dollars in thousands)
Results of Operations
Net sales		$	62,321	48,959	13,362	27.3%
Cost of goods sold			45,316	35,635	9,681	27.2%
Selling, general and administrative expenses			3,808	3,251	557	17.1%
	Operating income	$	13,197	10,073	3,124	31.0%

Net sales increased $13,362,000, or 27%, from the prior year to $62,321,000. This increase was primarily attributable to a 21% increase in average selling prices, as well as a 5% increase in metric tons sold. Pricing increased on magnesium ferrosilicon and calcium silicon due to improving demand, especially in the automotive and steel end markets. Additionally, pricing increased due to a mix shift from ferrosilicon, the lowest priced alloy, to calcium silicon and magnesium ferrosilicon. Volumes increased from higher shipments of magnesium ferrosilicon and calcium silicon as demand in the automotive and steel end markets continues to recover.

Operating income increased by $3,124,000 from the prior year to $13,197,000. The increase was primarily due to higher average selling prices offset by higher production costs. Cost of goods sold increased by 27%, primarily due to higher power, raw material and freight costs, and higher wage expense, while volumes increased by only 5%. Power costs increased beginning in November 2009 as our long-term power agreement expired. Additionally, selling, general and administrative expenses increased $557,000, primarily due to higher wage expense as a result of the terms of the union contract signed at the beginning of fiscal year 2011.

Solsil

			Years Ended
			June 30,		Increase	Percentage
			2011	2010	(Decrease)	Change
			(Dollars in thousands)
Results of Operations
Net sales		$	9,420	20	9,400	47,000.0%
Cost of goods sold			488	823	(335)	(40.7%)
Selling, general and administrative expenses			175	385	(210)	(54.5%)
Research and development			87	187	(100)	(53.5%)
	Operating income (loss)	$	8,670	(1,375)	10,045	(730.5%)

Net sales increased $9,400,000 from the prior year to $9,420,000. This increase was primarily due to the recognition of $9,400,000 in previously deferred revenue as the BP Solar technology license, joint development and supply agreement was terminated during the second quarter of fiscal year 2011.

Operating income (loss) increased by $10,045,000 from the prior year to $8,670,000. The primary driver of this increase was the recognition of $9,400,000 in previously deferred revenue as the BP Solar technology license, joint development and supply agreement was terminated during the second quarter of fiscal year 2011. The decrease in cost of goods sold of $335,000 from the prior year to $488,000 was a result of Solsil’s suspension of commercial production and enhanced focus on refining its production processes to improve yield and reduce the cost of production. As a result of these changes, selling, general and administrative expenses decreased $210,000 and research and development expenses decreased $100,000.

Corporate

			Years Ended
			June 30,		Increase	Percentage
			2011	2010	(Decrease)	Change
			(Dollars in thousands)
Results of Operations
Selling, general and administrative expenses		$	25,357	18,422	6,935	37.6%
Loss (gain) on sale of business			4,249	(21,237)	25,486	NA
	Operating (loss) income	$	(29,606)	2,815	(32,421)	(1,151.7%)

Operating (loss) income decreased $32,421,000 from the prior year to ($29,606,000). Fiscal year 2010 included a $21,237,000 gain on the sale of the manufacturing operations of Globe Metais, which was net of transaction expenses and the recording of certain retained liabilities. A subsequent settlement of retained acquisition contingencies was recorded in fiscal year 2011. Selling, general and administrative expenses increased by $6,935,000 primarily due to an increase in due diligence and transaction-related costs and audit and other professional fees, including Sarbanes-Oxley Act compliance related expenditures, of approximately $4,369,000 and $576,000, respectively. Additionally, bonus expense increased approximately $1,794,000 due to profitability improvement year over year.

25

Liquidity and Capital Resources

Sources of Liquidity

Our principal sources of liquidity are our cash and cash equivalents balance, cash flows from operations, and unused commitments under our existing credit facilities. At June 30, 2012, our cash and cash equivalents balance was approximately $178,010,000, and we had $194,254,000 available for borrowing under our existing financing arrangements. We generated cash flows from operations totaling $103,907,000 during the year ended June 30, 2012.

As of June 30, 2012, the amount of cash and cash equivalents, included in the Company’s consolidated cash that was held by foreign subsidiaries was approximately $52,518,000. If these funds are needed for operations in the U.S., the Company will be required to accrue and pay taxes in the U.S. to repatriate these funds. However, the Company’s intent is to permanently reinvest these funds outside the U.S. and the Company’s current plans do not indicate a need to repatriate them to fund operations in the U.S.

Certain of our subsidiaries borrow funds in order to finance working capital requirements and capital expansion programs. The terms of certain of our financing arrangements place restrictions on distributions of funds to us, however, we do not expect this to have an impact on our ability to meet our cash obligations. We believe we have access to adequate resources to meet our needs for normal operating costs, capital expenditure, and working capital for our existing business. Our ability to fund planned capital expenditures and make acquisitions will depend upon our future operating performance, which will be affected by prevailing economic conditions in our industry as well as financial, business and other factors, some of which are beyond our control.

In July 2011, we closed on the acquisition of Alden Resources, LLC, North America’s leading miner, processor and supplier of specialty metallurgical coal to the silicon and silicon-based alloys industries. We financed the acquisition with $18,200,000 of cash.

In September 2011, the Company’s Board of Directors approved a dividend of $0.20 per common share. The dividend, totaling $15,007,000, was paid on October 28, 2011, to stockholders of record as of October 14, 2011.  In August 2012, the Company’s Board of Directors approved an annual dividend of $0.25 per common share, payable quarterly in September 2012, December 2012, March 2013 and June 2013. The Board of Directors authorized a quarterly dividend of $0.0625 per common share on September 19, 2012 to shareholders of record at the close of business on September 5, 2012.

In June 2012, we closed on the acquisition of Becancour Silicon Metal Inc.’s 51% equity interest in Quebec Silicon Limited Partnership and other working capital assets. We financed the acquisition with $8,803,000 of cash.

In August 2012, the Board authorized the Company to offer to amend outstanding options representing the right to purchase shares issued to directors, officers and current employees pursuant to the Company’s 2006 Employee, Director and Consultant Stock Plan, to permit these options alternatively to be settled for cash or exercised for the issuance of shares, at the election of the option holder. The Company anticipates that these amendments will result in “mark-to-market” accounting with respect to the subject options and the expense associated with these amendments is approximately $24,000,000.

Cash Flows

The following table summarizes our primary sources (uses) of cash during the periods presented:

			Year Ended June 30,
			2012	2011	2010
			(Dollars in thousands)
Cash and cash equivalents at beginning of period		$	166,208	157,029	61,876
Cash flows provided by (used in) operating activities			103,907	61,188	(19,255)
Cash flows used in investing activities			(151,705)	(51,512)	(16,159)
Cash flows provided by financing activities			59,862	81	130,560
Effect of exchange rate changes on cash			(262)	(578)	7
	Cash and cash equivalents at end of period	$	178,010	166,208	157,029

Operating Activities:

Our business is cyclical and cash flows from operating activities may fluctuate during the year and from year-to-year due to economic conditions.

Net cash provided by operating activities was $103,907,000 and $61,188,000 during fiscal year 2012 and 2011, respectively. The $42,719,000 increase in net cash provided by operating activities was primarily due to a reduction in net working capital during fiscal year 2012, compared with fiscal year 2011 as well as improved operating results. Inventories decreased during fiscal year 2012 compared to an increase in fiscal year 2011 due to lower electrode inventory levels compared to the prior year period, and the sale of manganese ore, which was purchased as a raw material and ultimately not used in production. The increases in cash were offset by an increase in accounts receivable due to increased shipment volumes at the end of fiscal year 2012.  In fiscal year 2011, cash from operations was impacted by growth in inventory, primarily related electrode inventory which was subsequently used in current year production, partially offset by a gain on the sale of our Brazilian manufacturing operations.

Investing Activities:

Net cash used in investing activities was approximately $151,705,000 and $51,512,000 during fiscal year 2012 and 2011, respectively. In fiscal year 2012, $73,200,000 of cash was used, net of cash acquired, in the acquisition of Alden Resources LLC.  Additionally, $36,517,000 of cash was to fund, net of cash acquired, the purchase of certain assets of Becancour Silicon in June 2012.  Year over year capital expenditures increased from approximately $41,836,000 to $35,039,000 in the current fiscal year due to furnace overhauls at our GMI plants as well as the purchase and refurbishment of equipment at Alden Resources.

Financing Activities:

Net cash provided by financing activities was approximately $59,862,000 and $81,000 during fiscal years 2012 and 2011, respectively.  During fiscal year 2012, the acquisitions of Alden Resources and Quebec Silicon were partially financed with borrowings of long-term debt of $50,000,000 and $31,800,000, respectively.  In May 2012, we entered into a credit agreement which provides for a $300,000,000 five-year revolving multi-currency credit facility. The credit facility refinanced existing debt and closing costs of $96,550,000. A dividend payment of $15,007,000 and $11,269,000 was paid to our common stockholders during fiscal years 2012 and 2011, respectively.

Exchange Rate Change on Cash:

The effect of exchange rate changes on cash was related to fluctuations in renminbi, the functional currency of our Chinese subsidiary, Yonvey.

26

Commitments and Contractual Obligations

The following tables summarize our contractual obligations at June 30, 2012 and the effects such obligations are expected to have on our liquidity and cash flows in future periods:

Contractual Obligations			Less than	One to	Three to	More than
(as of June 30, 2012)		Total	One Year	Three Years	Five Years	5 Years
		(Dollars in thousands)
Operating lease obligations	$	6,346	3,266	3,080	—	—
Capital lease obligations		14,298	2,544	7,512	4,242	—

The table above also excludes certain other obligations reflected in our consolidated balance sheet, including estimated funding for pension obligations, for which the timing of payments may vary based on changes in the fair value of pension plan assets and actuarial assumptions. We expect to contribute approximately $4,128,000 to our pension plans for the year ended June 30, 2013.

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements or relationships with unconsolidated entities of financial partnerships, such as entities often referred to as structured finance or special purpose entities.

Litigation and Contingencies

We are subject to various lawsuits, claims and proceedings that arise in the normal course of business, including employment, commercial, environmental, safety and health matters, as well as claims associated with our historical acquisitions and divestitures. Although it is not presently possible to determine the outcome of these matters, in the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial position, results of operations, or liquidity.

At June 30, 2012 and June 30, 2011, there are no liabilities recorded for environmental contingencies. With respect to the cost for ongoing environmental compliance, including maintenance and monitoring, such costs are expensed as incurred unless there is a long-term monitoring agreement with a governmental agency, in which case a liability is established at the inception of the agreement.

Accounting Pronouncements to be Implemented

In June 2011, the FASB issued Accounting Standards Update No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (ASU 2011-05). The objective of this amendment is to increase the prominence of other comprehensive income in the financial statements. The amendments require entities to report components of net income and the components of other comprehensive income either in a continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, the amendments in ASU 2011-05 require an entity to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented.  In December 2011, the FASB issued Accounting Standards Update No. 2011-12, which deferred the specific requirements related to the presentation of reclassification adjustments. This amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.We expect the adoption of this ASU will affect financial statement presentation only.

In September 2011, FASB issued Accounting Standards Update No. 2011-08, Testing Goodwill for Impairment (ASU 2011-08), which amends the guidance in ASC 350-20. The amendments in ASU 2011-08 provide entities with the option of performing a qualitative assessment before performing the first step of the two-step impairment test. If entities determine, on the basis of qualitative factors, it is not more likely than not that the fair value of the reporting unit is less than the carrying amount, then performing the two-step impairment test would be unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any. ASU 2011-08 also provides entities with the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to the first step of the two-step impairment test. ASU 2011-08 is effective for interim and annual periods beginning after December 15, 2011 but early adoption is permitted. The Company does not expect material financial statement implications relating to the adoption of this ASU.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks arising from adverse changes in:

•  commodity prices,

•  interest rates, and

•  foreign exchange rates.

In the normal course of business, we manage these risks through a variety of strategies, including obtaining captive or long-term contracted raw material supplies and hedging strategies. Obtaining captive or long-term contracted raw material supplies involves the acquisition of companies or assets for the purpose of increasing our access to raw materials or the identification and effective implementation of long-term leasing rights or supply agreements. We enter into derivative instruments to hedge certain commodity price, interest rate, and foreign currency risks. We do not engage in commodity, interest rate, or currency speculation, and no derivatives are held for trading purposes.

All derivatives are accounted for using mark-to-market accounting. We believe it is not practical to designate our derivative instruments as hedging instruments as defined under ASC Subtopic 815-10, Derivatives and Hedging (ASC 815). Accordingly, we adjust our derivative financial instruments to current market value through the consolidated statement of income based on the fair value of the agreement as of period-end. Although not designated as hedged items as defined under ASC 815, these derivative instruments serve to significantly offset our commodity, interest rate, and currency risks. Gains or losses from these transactions offset gains or losses on the assets, liabilities, or transactions being hedged. No credit loss is anticipated as the counterparties to our derivative agreements are major financial institutions that are highly rated.

The sensitivity of our derivatives to these market fluctuations is discussed below. See our June 30, 2011 consolidated financial statements for further discussion of these derivatives and our hedging policies.

27

Commodity Prices:

We are exposed to price risk for certain raw materials and energy used in our production process. The raw materials and energy which we use are largely commodities, subject to price volatility caused by changes in global supply and demand and governmental controls. Derivative financial instruments are not used extensively to manage our exposure to fluctuations in the cost of commodity products used in our operations. We attempt to reduce the impact of increases in our raw material and energy costs by negotiating long-term contracts and through the acquisition of companies or assets for the purpose of increasing our access to raw materials with favorable pricing terms. We have entered into long-term power supply contracts that result in stable, favorably priced long-term commitments for the majority of our power needs. Additionally, we have long-term lease mining rights in the U.S. that supply us with a substantial portion of our requirements for quartzite. We also have obtained a captive supply of electrodes through our 70% ownership interest in Yonvey.

In June 2010, we entered into a power hedge agreement on a 175,440 MWh notional amount of electricity, representing approximately 20% of the total power required by our Niagara Falls, New York plant. This hedge covers our expected needs not supplied by the facility’s long-term power contract over the term of the hedge agreement. The notional amount decreases equally per month through the agreement’s expiration on June 30, 2012. Under the power hedge agreement, we fixed the power rate at $39.60 per MWh over the life of the contract. In October 2010, we entered into a power hedge agreement on a 87,600 MWh notional amount of electricity. The agreement is effective July 1, 2012 and the notional amount decreases equally per month through the agreement’s expiration on June 30, 2013. Under the power hedge agreement, we fixed the power rate at $39.95 per MWh over the life of the contract.

The $742,000 liability associated with the fair value of our power hedge agreements at June 30, 2012 is included in accrued expenses and other current liabilities.

To the extent that we have not mitigated our exposure to rising raw material and energy prices, we may not be able to increase our prices to our customers to offset such potential raw material or energy price increases, which could have a material adverse effect on our results of operations and operating cash flows.

Interest Rates:

We are exposed to market risk from changes in interest rates on certain of our short-term and long-term debt obligations. The Company had outstanding total debt at June 30, 2012 of $140,703,000, with interest rates arranging from 2% to 5%. The Company previously entered into interest rate cap arrangement and swap agreements to mitigate the risk of interest rate fluctuations on its recently terminated senior credit facility and long-term debt. The Company settled these agreements in connection with the termination of the senior credit facility and long-term debt. The Company would consider entering into hedge agreements to mitigate the interest rate risk, if conditions warrant.

If market interest rates were to increase or decrease by 10% for the full 2013 fiscal year as compared to the rates in effect at June 30, 2012, we estimate that the change would not have a material impact to our cash flows or results of operations.

Foreign Currency Risk:

We are exposed to market risk arising from changes in currency exchange rates as a result of operations outside the United States, principally in Argentina and China. A portion of our net sales generated from our non-U.S. operations is denominated in currencies other than the U.S. dollar. Most of our operating costs for our non-U.S. operations are denominated in local currencies, principally the Argentine peso and the Chinese renminbi. Consequently, the translated U.S. dollar value of our non-U.S. dollar sales, and related accounts receivable balances, and our operating costs are subject to currency exchange rate fluctuations. Derivative instruments are not used extensively to manage this risk. We have utilized derivative financial instruments, including foreign exchange forward contracts, to manage a portion of our net foreign currency exposure to the Brazilian real and the Euro. All of the Brazilian real contracts were settled prior to the sale of the manufacturing operations of Globe Metais.

If foreign exchange rates were to increase or decrease by 10% for the full 2013 fiscal year, as compared to the rates in effect at June 30, 2012, we estimate that the change would not have a material impact to our cash flows or results of operations.

Item 8. Financial Statements and Supplementary Data

The financial statements appearing on pages 35 to 63 are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures as such term is defined in Securities Exchange Act Rule 13a-15(e) or 15d-15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal controls over financial reporting. Our internal control system over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles.

The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

28

In connection with the preparation of our annual consolidated financial statements, management has undertaken its assessment of the effectiveness of our internal control over financial reporting as of June 30, 2012, based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of those controls. Based on this assessment, management has concluded that the Company’s internal control over financial reporting was effective as of June 30, 2012.

Management’s evaluation on the effectiveness of internal control over financial reporting did not include Quebec Silicon, which we acquired on June 13, 2012, as management concluded that it was not possible to conduct an assessment of Quebec Silicon’s internal control over financial reporting in the period between the consummation date and the date of management’s evaluation. The revenues of Quebec Silicon, which included in our June 30, 2012 consolidated financial statements starting on June 13, 2012, represented than less 1% of our net sales for the year ended June 30, 2012, and represented approximately 15% of total assets as of June 30, 2012.

Report of Independent Registered Public Accounting Firm

KPMG LLP, the independent registered public accounting firm that audited our consolidated financial statements included in this report, has issued its report on the effectiveness of our internal control over financial reporting, a copy of which appears on page 37 of this annual report.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the fourth quarter ended June 30, 2012, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

Not applicable.

29

PART III

Certain information required by Part III is omitted from this report in that we will file a definitive proxy statement pursuant to Regulation 14A with respect to our 2012 Annual Meeting (the “Proxy Statement”) no later than 120 days after the end of the fiscal year covered by this report, and certain information included therein is incorporated herein by reference. Only those sections of the Proxy Statement which specifically address the items set forth herein are incorporated by reference.

Item 10. Directors, Executive Officers and Corporate Governance

Except as set forth below, the information required by this Item is hereby incorporated herein by reference to the Proxy Statement.

Set forth below is certain information about our executive officers:

Name	Age		Position
Alan Kestenbaum		50	Executive Chairman and Director
Jeff Bradley		52	Chief Executive Officer and Chief Operating Officer
Malcolm Appelbaum		51	Chief Financial Officer
Stephen Lebowitz		47	Chief Legal Officer

Alan Kestenbaum has served as Executive Chairman and Director since our inception in December 2004, and served as Chief Executive Officer from our inception through May 2008. From June 2004, Mr. Kestenbaum served as Chairman of Globe Metallurgical, Inc., until its acquisition by us in November 2006. He has over 20 years of experience in metals including finance, distribution, trading and manufacturing. Mr. Kestenbaum is a founder and the Chief Executive Officer of Marco International Corp., and its affiliates, a finance trading group specializing in metals, minerals and other raw materials, founded in 1985. Mr. Kestenbaum was involved in the expansion by certain of Marco International’s affiliates into China and the former Soviet Union. He also established affiliated private equity businesses in 1999 which were involved in sourcing and concluding a number of private equity transactions, including ones relating to McCook Metals, Scottsboro Aluminum and Globe Metallurgical, Inc. From 1997 until June 2008, Mr. Kestenbaum was also the Vice President of Marco Hi-Tech JV LLC, a nutritional ingredient supplier to the nutritional supplement industry. Mr. Kestenbaum serves as a member of the Board of Directors of Wolverine Tube, Inc., a provider of copper and copper alloy tube, fabricated products and metal joining products and between January 2006 and June 2008 served as a director of Neuro-Hitech, Inc., a development stage pharmaceutical company. Mr. Kestenbaum began his career in metals with Glencore, Inc. and Philipp Brothers in New York City. He received his B.A. in Economics cum laude from Yeshiva University, New York.

Jeff Bradley has served as our Chief Executive Officer since May 2008 and our Chief Operating Officer since August 2010. From June 2005 until February 2008, Mr. Bradley served as Chairman, Chief Executive Officer and Director of Claymont Steel Holdings, Inc., a company specializing in the manufacture and sale of custom-order steel plate in the United States and Canada. Mr. Bradley was not employed after his February 2008 departure from Claymont Steel until he joined us in May 2008. Prior to joining Claymont Steel, from September 2004 to June 2005, Mr. Bradley served as Vice President of strategic planning for Dietrich Industries, a construction products subsidiary of Worthington Industries. From September 2000 to August 2004, Mr. Bradley served as a vice president and general manager for Worthington Steel, a diversified metal processing company. Mr. Bradley holds a B.S. in Business Administration from Loyola College in Baltimore, Maryland.

Malcolm Appelbaum joined our company as Chief Financial Officer in September 2008. Prior to that, from 2000 until September 2008, Mr. Appelbaum served as President of Appletree Advisors, Inc., a financial consulting and advisory firm he founded to serve the portfolio companies of private equity firms and senior and mezzanine lenders. While at Appletree, he served as Interim-Chief Financial Officer for several underperforming companies and assisted others as an outside consultant. Between 1992 and 2000, Mr. Appelbaum was a principal at Wand Partners Inc., a private equity investor. At Wand he was the financial officer responsible for the firm and worked extensively with portfolio companies and developed an investment practice closing several platform and add-on acquisitions. Prior to joining Wand Partners, Mr. Appelbaum was an associate at M&T Bank, a financial analyst at Goldman Sachs and a senior consultant and senior accountant at Deloitte & Touche. Mr. Appelbaum received a B.S. from Brooklyn College and an M.B.A. from Columbia University.

Stephen Lebowitz has served as our Chief Legal Officer since July 2008. Prior to that, from 2001 to 2008, Mr. Lebowitz was in-house counsel at BP p.l.c., one of the world’s largest petroleum companies, to its jet fuel, marine and solar energy divisions. Prior to joining BP, Mr. Lebowitz was in private practice, both as a partner at the law firm Ridberg, Press and Aaronson, and as an associate with the law firm Kaye Scholer LLP. Mr. Lebowitz holds a B.A. from the University of Vermont, received a law degree from George Washington University, and while overseas as a Fulbright Scholar, obtained an L.L.M. in European law.

Item 11. Executive Compensation

The information required by this Item is hereby incorporated herein by reference to the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item is hereby incorporated herein by reference to the Proxy Statement.

Item 13. Certain Relationships and Related Transactions and Director Independence

The information required by this Item is hereby incorporated herein by reference to the Proxy Statement.

Item 14. Principal Accountant Fees and Services

The information required by this Item is hereby incorporated herein by reference to the Proxy Statement.

30

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Annual Report on Form 10-K:

(1)   Financial Statements

	Page
Reports of Independent Registered Public Accounting Firm	36
Consolidated Balance Sheets at June 30, 2012 and 2011	38
Consolidated Statements of Income for the years ended June 30, 2012, 2011, and 2010	39
Consolidated Statements of Changes in Stockholders’ Equity for the years ended June 30, 2012, 2011, and 2010	40
Consolidated Statements of Cash Flows for the years ended June 30, 2012, 2011, and 2010	41
Notes to Consolidated Financial Statements	42

(2)   Financial Statement Schedules

Not applicable.

31

(3)   Exhibits

The following exhibits are filed with this Annual Report or incorporated by reference:

Exhibit
Number		Description of Document
2	.1	Purchase and Sale Agreement dated as of March 26, 2010, by and among Globe Metals Enterprises, Inc., Core Metals Group Holdings LLC and each of the Sellers named therein (6)
2	.2	Membership Interest Purchase Agreement dated May 27, 2011 by and among NGPC Asset Holdings II, LP,NGP Capital Resources Company and Globe BG, LLC relating to Alden Resources Inc. (7)
2	.3	Membership Interest Purchase Agreement dated May 27, 2011 by and among NGPC Asset Holdings II, LP,NGP Capital Resources Company and Globe BG, LLC relating to Gatliff Services, Inc. (7)
2	.4	Purchase Agreement dated May 27, 2011 by and among NGP Capital Resources Company, Globe BG, LLC and Globe Specialty Metals, Inc. regarding The Overriding Royalty Interests (7)
2	.5	Agreement of Purchase and Sale dated as of April 25, 2012 by and among Becancour Silicon Inc., Timminco Ltd., QSI Partners Ltd., and Globe Specialty Metals, Inc. †
		Articles of Incorporation and Bylaws
3	.1	Amended and Restated Certificate of Incorporation (1)
3	.2	Certificate of Amendment to the Amended and Restated Certificate of Incorporation (1)
3	.3	Amended and Restated Bylaws (2)
		Instruments Defining the Rights of Security Holders, Including Indentures
4	.1	Third Amended and Restated Credit Agreement dated as of March 30, 2011, by and among GMI, Tennessee Alloys Company LLC, and GSM Sales, Inc., as borrowers, Alabama Sand and Gravel, Inc. and Laurel Ford Resources, Inc., as subsidiary guarantors, GSM, as Parent, the lender parties thereto, and Societe Generale, as Administrative Agent, Issuing Bank, Swingline Lender and Collateral Agent and SG Americas Securities LLC, as Sole Arranger (3)
4	.2	Term Loan Agreement, dated July 28, 2011, by and among GBG Holdings, LLC, Globe Specialty Metals, Inc., GSM Enterprises LLC, the Lenders from time to time party thereto, and BNP Paribas, as administrative agent, collateral agent, sole lead arranger and sole bookrunner (13)
4	.3	Credit Agreement, dated as of May 31, 2012, among the Company, certain subsidiaries of the Company from time to time party thereto, Fifth Third Bank as Administrative Agent and L/C issuer, Merrill Lynch, Pierce, Fenner & Smith Incorporated as Joint Lead Arranger and Joint Book Runner, Bank of America, N.A., KeyBank National Association, Sovereign Bank, N.A., and  Wells Fargo Bank, N.A., as Co-Syndication Agents, and BBVA Compass Bank,  Citibank, N.A., Citizens Bank Of Pennsylvania, HSBC Bank USA N.A., and PNC Bank, National Association, as  Co-Documentation Agents, and the other lenders party thereto. (5)
		We are a party to other instruments defining the rights of holders of long-term debt. No such instrument authorizes an amount of securities in excess of 10 percent of the total assets of the company and its subsidiaries on a consolidated basis. We agree to furnish a copy of each such instrument to the Commission on request.
		Material Contracts
10	.1	Output and Supply Agreement, dated as of October 1, 2010, by and among Quebec Silicon Limited Partnership, Becancour Silicon Inc. (succeeded in interest by QSIP Canada ULC) and Dow Corning Corporation. †
10	.2	Shareholders Agreement between all the Shareholders of Quebec Silicon General Partner Inc., dated as of October 1, 2010, by and among Becancour Silicon Inc. (succeeded in interest by QSIP Canada ULC), Dow Corning Netherlands, B.V., and Quebec Silicon General Partner Inc. †
10	.3	Amended and Restated Limited Partnership Agreement dated as of October 1, 2010, by and among Becancour Silicon Inc. (succeeded in interest by QSIP Canada ULC), Dow Corning Canada, Inc., and Quebec Silicon General Partner Inc. †
		Management Contracts and Compensatory Plans
10	.6	2006 Employee, Director and Consultant Stock Option Plan (1)
10	.7	Amendments to 2006 Employee, Director and Consultant Stock Option Plan (8)
10	.8	2010 Annual Executive Bonus Plan (9)
10	.9	Chief Financial Officer and Chief Legal Officer Annual Bonus Plan (10)
10	.10	Framework for the 2011 Annual Executive Long Term Incentive Plan (11)
10	.11	Employment Agreement, dated January 27, 2011, between GSM and Alan Kestenbaum (11)
10	.12	Employment Agreement, dated July 5, 2011, between GSM and Jeff Bradley (12)
10	.13	Employment Agreement, dated November 30, 2011, between GSM and Malcolm Appelbaum (4)
10	.14	Employment Agreement, dated June 20, 2008, between GSM and Stephen Lebowitz (1)
10	.15	Amendment to Employment Agreement, dated October 27, 2010, between GSM and Stephen Lebowitz (8)
10	.16	Executive Deferred Compensation Plan (4)
10	.17	Director Deferred Compensation Plan (4)
21	.1	Subsidiaries †
23	.1	Consent of KPMG LLP †
31	.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 †
31	.2	Certification of the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 †
32	.1	Certification of the Principal Executive Officers and Principal Financial Officer Pursuant to 18 U.S.C. 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 †
95		Mine Safety Disclosure †
101		The following materials from our Annual Report on Form 10-K for the fiscal year ended June 30, 2012 formatted in eXtensible Business Reporting Language (“XBRL”): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Changes in Stockholders’ Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) notes to these consolidated financial statements. *

32

_____________________________________________________

†	Filed herewith.
*	In accordance with Rule 406T of Regulation S-T, the XBRL related documents in Exhibit 101 to this Annual Report on Form 10-K are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or Section 12 of the Securities Act of 1933, as amended; are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended; and otherwise are not subject to liability under those Sections.
1	Incorporated by reference to the exhibit with the same designation filed with the Company’s registration statement on Form S-1 (Registration No. 333-152513) filed on July 25, 2008.
2	Incorporated by reference to the exhibit with the same designation filed with Amendment No. 1 to the Company’s registration statement on Form S-1 (Registration No. 333-152513) filed on November 4, 2008.
3	Incorporated by reference to exhibit to the Company’s Form 8-K filed on April 5, 2011.
4	Incorporated by reference to exhibit to the Company’s Form 10-Q filed on February 8, 2012.
5	Incorporated by reference to exhibit to the Company’s Form 8-K filed on June 6, 2012.
6	Incorporated by reference to exhibit to the Company’s Form 8-K filed on April 1, 2010.
7	Incorporated by reference to exhibit to the Company’s Form 8-K filed on June 3, 2011.
8	Incorporated by reference to exhibit to the Company’s Form 10-Q filed on February 11, 2011.
9	Incorporated by reference to exhibit to the Company’s Form 10-K filed on September 28, 2010.
10	Incorporated by reference to exhibit to the Company’s Form 10-Q filed on November 12, 2010.
11	Incorporated by reference to exhibit to the Company’s Form 10-Q filed on May 12, 2011.
12	Incorporated by reference to exhibit to the Company’s Form 10-K filed on August 26, 2011.
13	Incorporated by reference to exhibit to the Company’s Form 8-K filed on August 2, 2011.

33

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Globe Specialty Metals, Inc. (Registrant)
By:	/s/  Malcolm Appelbaum
	Malcolm Appelbaum Chief Financial Officer

August 27, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/  Alan Kestenbaum	Executive Chairman and Director	August 27, 2012
Alan Kestenbaum
/s/  Jeff Bradley	Chief Executive Officer, Chief Operating Officer and Principal Executive Officer	August 27, 2012
Jeff Bradley
/s/  Malcolm Appelbaum	Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer	August 27, 2012
Malcolm Appelbaum
/s/  Stuart E. Eizenstat	Director	August 27, 2012
Stuart E. Eizenstat
/s/  Franklin Lavin	Director	August 27, 2012
Franklin Lavin
/s/  Donald Barger	Director	August 27, 2012
Donald Barger
/s/  Thomas Danjczek	Director	August 27, 2012
Thomas Danjczek

34

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

GLOBE SPECIALTY METALS, INC.

	Page
Reports of Independent Registered Public Accounting Firm		36
Consolidated Balance Sheets — June 30, 2012 and 2011		38
Consolidated Statements of Income — Years ended June 30, 2012, 2011, and 2010		39
Consolidated Statements of Changes in Stockholders’ Equity — Years ended June 30, 2012, 2011, and 2010		40
Consolidated Statements of Cash Flows — Years ended June 30, 2012, 2011, and 2010		41
Notes to Consolidated Financial Statements		42

35

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Globe Specialty Metals, Inc.:

We have audited the accompanying consolidated balance sheets of Globe Specialty Metals, Inc. and subsidiary companies (the Company) as of June 30, 2012 and 2011, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2012. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the Standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Globe Specialty Metals, Inc. and subsidiary companies as of June 30, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended June 30, 2012, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Globe Specialty Metals, Inc. and subsidiary companies’ internal control over financial reporting as of June 30, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated August 27, 2012 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

New York, New York

August 27, 2012

36

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Globe Specialty Metals, Inc.:

We have audited Globe Specialty Metals, Inc. and subsidiary companies (the Company) internal control over financial reporting as of June 30, 2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Globe Specialty Metals, Inc. and subsidiary companies’ management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting under Item 9A. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company acquired Quebec Silicon Limited Partnership (Quebec Silicon) on June 13, 2012, and management excluded Quebec Silicon's internal control over financial reporting from its assessment of the effectiveness of the Company's internal control over financial reporting as of June 30, 2012.  The acquisition of Quebec Silicon contributed less than 1 percent of the Company's total revenue for the year ended June 30, 2012 and accounted for approximately 15 percent of the Company's total assets as of June 30, 2012.  Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Quebec Silicon.

In our opinion, Globe Specialty Metals, Inc. and subsidiary companies maintained, in all material respects, effective internal control over financial reporting as of June 30, 2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Globe Specialty Metals, Inc.  and subsidiary companies as of June 30, 2012 and 2011, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2012, and our report dated August 27, 2012 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

New York, New York

August 27, 2012

37

GLOBE SPECIALTY METALS, INC. AND SUBSIDIARY COMPANIES
Consolidated Balance Sheets
June 30, 2012 and 2011
(In thousands, except share and per share amounts)
					2012	2011
ASSETS
Current assets:
	Cash and cash equivalents			$	178,010	166,208
	Accounts receivable, net of allowance for doubtful accounts of $955
		and $715 at June 30, 2012 and 2011, respectively			85,258	60,871
	Inventories				119,441	109,292
	Prepaid expenses and other current assets				27,915	27,876
			Total current assets		410,624	364,247
Property, plant, and equipment, net of accumulated depreciation, depletion and amortization					432,761	229,977
Goodwill					56,740	53,503
Other intangible assets					477	477
Investments in unconsolidated affiliates					9,217	8,640
Deferred tax assets					200	217
Other assets					26,728	21,208
			Total assets	$	936,747	678,269
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable			$	52,005	39,947
	Short-term debt				317	1,094
	Revolving credit agreements				9,000	12,000
	Accrued expenses and other current liabilities				40,602	34,475
			Total current liabilities		101,924	87,516
Long-term liabilities:
	Revolving credit agreements				131,386	34,989
	Deferred tax liabilities				28,835	23,264
	Other long-term liabilities				70,803	17,224
			Total liabilities		332,948	162,993
Commitments and contingencies (note 15)
Stockholders’ equity:
	Common stock, $0.0001 par value. Authorized, 150,000,000 shares; issued, 75,331,310
		and 75,289,614 shares at June 30, 2012 and 2011, respectively			8	8
	Additional paid-in capital				405,675	399,900
	Retained earnings				119,863	80,300
	Accumulated other comprehensive income (loss):
		Foreign currency translation adjustment			1,256	937
		Pension liability adjustment, net of tax			(8,058)	(3,933)
		Unrealized gain on available for sale securities, net of tax			(38)	1
			Total accumulated other comprehensive loss		(6,840)	(2,995)
	Treasury stock at cost, 282,437 shares at  June 30, 2012 and 2011				(4)	(4)
			Total Globe Specialty Metals, Inc. stockholders’ equity		518,702	477,209
	Noncontrolling interest				85,097	38,067
			Total stockholders’ equity		603,799	515,276
			Total liabilities and stockholders’ equity	$	936,747	678,269
See accompanying notes to consolidated financial statements.

38

GLOBE SPECIALTY METALS, INC. AND SUBSIDIARY COMPANIES
Consolidated Statements of Income
Years ended June 30, 2012, 2011, and 2010
(In thousands, except per share amounts)
				2012	2011	2010
Net sales			$	705,544	641,863	472,658
Cost of goods sold				552,873	488,018	390,093
Selling, general, and administrative expenses				61,623	54,739	47,875
Research and development				127	87	200
Business interruption insurance recovery				(450)	—	—
Restructuring charges				—	—	(81)
(Gain) loss on sale of business				(54)	4,249	(19,715)
		Operating income		91,425	94,770	54,286
Other income (expense):
	Interest income			243	214	318
	Interest expense, net of capitalized interest			(7,610)	(3,198)	(4,372)
	Foreign exchange gain (loss)			1,191	(390)	3,811
	Other income			1,387	1,318	764
		Income before provision for income taxes		86,636	92,714	54,807
Provision for income taxes				28,760	35,988	20,539
		Net income		57,876	56,726	34,268
Income attributable to noncontrolling interest, net of tax				(3,306)	(3,918)	(167)
		Net income attributable to Globe Specialty Metals, Inc.	$	54,570	52,808	34,101
Weighted average shares outstanding:
	Basic			75,039	74,925	73,512
	Diluted			76,624	76,624	74,770
Earnings per common share:
	Basic		$	0.73	0.70	0.46
	Diluted			0.71	0.69	0.46
Cash dividends declared per common share				0.20	0.15	—
See accompanying notes to consolidated financial statements.

39

GLOBE SPECIALTY METALS, INC. AND SUBSIDIARY COMPANIES
Consolidated Statements of Changes in Stockholders’ Equity
Years ended June 30, 2012, 2011, and 2010
(In thousands)
				Globe Specialty Metals, Inc. Stockholders’ Equity
									Accumulated
							Additional		Other	Treasury			Total
				Common Stock			Paid-In	Retained	Comprehensive	Stock	Noncontrolling	Comprehensive	Stockholders’
				Shares		Amount	Capital	Earnings	(Loss) Income	at Cost	Interest	Income (Loss)	Equity
Balance at June 30, 2009				66,944	$	7	303,364	4,660	(3,644)	(4)	6,969	(48,525)	311,352
Warrants exercised				257		—	1,287	—	—	—	—		1,287
UPOs exercised				1,519		—	210	—	—	—	—		210
Share-based compensation				3		—	5,712	—	—	—	—		5,712
Stock option exercises				99		—	616	—	—	—	—		616
Stock issuance				5,600		—	34,768	—	—	—	—		34,768
Sale of noncontrolling interest				—		—	44,397	—	—	—	27,012		71,409
Realized gain on available-for-sale securities				—		—	—	—	(10)	—	—		(10)
Comprehensive income (loss):
	Foreign currency translation adjustment			—		—	—	—	64	—	1	65	65
	Pension liability adjustment (net of income
		tax benefit of $551)		—		—	—	—	(851)	—	—	(851)	(851)
	Unrealized gain on available-for-sale securities
		(net of provision for income taxes of $1)		—		—	—	—	3	—	—	3	3
	Net income			—		—	—	34,101	—	—	167	34,268	34,268
			Total comprehensive income									33,485	33,485
Balance at June 30, 2010				74,422		7	390,354	38,761	(4,438)	(4)	34,149		458,829
Share-based compensation				4		—	4,332	—	—	—	—		4,332
Stock option exercises				864		1	5,214	—	—	—	—		5,215
Cash dividend declared				—		—	—	(11,269)	—	—	—		(11,269)
Comprehensive income:
	Foreign currency translation adjustment			—		—	—	—	795	—	—	795	795
	Pension liability adjustment (net of income
		tax benefit of $419)		—		—	—	—	647	—	—	647	647
	Unrealized gain on available-for-sale securities
		(net of provision for income taxes of $0)		—		—	—	—	1	—	—	1	1
	Net income			—		—	—	52,808	—	—	3,918	56,726	56,726
			Total comprehensive income									58,169	58,169
Balance at June 30, 2011				75,290		8	399,900	80,300	(2,995)	(4)	38,067		515,276
Share-based compensation				4		—	2,482	—	—	—	—		2,482
Stock option exercises				38		—	195	—	—	—	—		195
Sale of noncontrolling interest				—		—	210	—	—	—	—		210
Cash dividend declared				—		—	—	(15,007)	—	—	—		(15,007)
Solsil shares purchased				—		—	2,888	—	—	—	(3,038)		(150)
Acquisition of Quebec Silicon				—		—	—	—	—	—	46,762		46,762
Comprehensive income (loss):
	Foreign currency translation adjustment			—		—	—	—	319	—	—	319	319
	Pension liability adjustment (net of income
		tax benefit of $2,528)		—		—	—	—	(4,125)	—	—	(4,125)	(4,125)
	Unrealized loss on available-for-sale securities
		(net of provision for income taxes of $13)		—		—	—	—	(39)	—	—	(39)	(39)
	Net income			—		—	—	54,570	—	—	3,306	57,876	57,876
			Total comprehensive income									54,031	54,031
Balance at June 30, 2012				75,332	$	8	405,675	119,863	(6,840)	(4)	85,097		603,799
See accompanying notes to consolidated financial statements.

40

GLOBE SPECIALTY METALS, INC. AND SUBSIDIARY COMPANIES
Consolidated Statements of Cash Flows
Years ended June 30, 2012, 2011, and 2010
(In thousands)
							2012	2011	2010
Cash flows from operating activities:
	Net income					$	57,876	56,726	34,268
	Adjustments to reconcile net income to net cash provided by (used in) operating activities:
			Depreciation and amortization				34,000	25,055	20,672
			Depletion				848	—	—
			Share-based compensation				2,482	4,332	5,712
			(Gain) loss on sale of business				(54)	4,249	(19,715)
			Amortization of deferred financing fees				2,180	195	271
			Deferred taxes				9,312	13,538	(8,123)
			Accretion				230	—	—
			Changes in operating assets and liabilities:
				Accounts receivable, net			2,608	(4,664)	(29,029)
				Inventories			10,729	(25,355)	(16,326)
				Prepaid expenses and other current assets			(4,505)	(1,649)	6,984
				Accounts payable			(5,047)	(7,833)	28,290
				Accrued expenses and other current liabilities			2,038	(6,179)	(13,438)
				Other			(8,790)	2,773	(28,821)
					Net cash provided by (used in) operating activities		103,907	61,188	(19,255)
Cash flows from investing activities:
	Capital expenditures						(41,836)	(35,039)	(22,901)
	Acquisition of businesses, net of cash acquired of $4,090, $0, and $1,873 during the
		years ended June 30, 2012, 2011, and 2010, respectively					(109,717)	—	(53,084)
	Sale of businesses, net of cash disposed of $0, $0, and $17,132 during the
		years ended June 30, 2012, 2011, and 2010, respectively					—	2,500	60,559
	Working capital adjustments from acquisition of businesses, net						—	(2,038)	—
	Other investing activities						(152)	(16,935)	(733)
					Net cash used in investing activities		(151,705)	(51,512)	(16,159)
Cash flows from financing activities:
	Borrowings of long-term debt						50,000	—	—
	Payments of long-term debt						(50,000)	(17,012)	(21,917)
	Borrowings of short-term debt						1,048	4,999	11,896
	Payments of short-term debt						(1,825)	(11,972)	(10,518)
	Borrowings under revolving credit agreements						136,408	35,989	22,000
	Payments under revolving credit agreements						(54,462)	(5,000)	(6,000)
	Debt issuance costs						(5,199)	(869)	—
	Dividend payment						(15,007)	(11,269)	—
	Proceeds from stock option exercises						195	5,215	616
	Proceeds from warrants exercised						—	—	1,287
	Proceeds from UPOs exercised						—	—	210
	Sale of noncontrolling interest						—	—	97,917
	Sale of common stock						—	—	36,456
	Other financing activities						(1,296)	—	(1,387)
					Net cash provided by financing activities		59,862	81	130,560
Effect of exchange rate changes on cash and cash equivalents							(262)	(578)	7
					Net increase in cash and cash equivalents		11,802	9,179	95,153
Cash and cash equivalents at beginning of year							166,208	157,029	61,876
Cash and cash equivalents at end of year						$	178,010	166,208	157,029
Supplemental disclosures of cash flow information:
	Cash paid for interest, net of capitalized interest					$	4,475	2,533	2,494
	Cash paid for income taxes, net of refunds totaling $3,194, $586, and $2,729 during the
		years ended June 30, 2012, 2011, and 2010, respectively					22,023	19,819	51,709
See accompanying notes to consolidated financial statements.

41

GLOBE SPECIALTY METALS, INC. AND SUBSIDIARY COMPANIES

Notes to Consolidated Financial Statements

 June 30, 2012, 2011, and 2010

(Dollars in thousands, except per share data)

(1)   Organization and Business Operations

Globe Specialty Metals, Inc. and subsidiary companies (GSM, the Company, we, or our) is among the world’s largest producers of silicon metal and silicon-based alloys, important ingredients in a variety of industrial and consumer products. The Company’s customers include major silicone chemical, aluminum and steel manufacturers, auto companies and their suppliers, ductile iron foundries, manufacturers of photovoltaic solar cells and computer chips, and concrete producers.

On November 13, 2006, the Company acquired Globe Metallurgical, Inc. (GMI), a manufacturer of silicon metal and silicon-based alloys. GMI owns and operates plants in Beverly, Ohio, Alloy, West Virginia, Niagara Falls, New York, and Selma, Alabama. GMI’s products are sold primarily to the silicone chemical, aluminum, metal casting, and solar cell industries, primarily in the United States, Canada, and Mexico. GMI also owns 50% of Norchem, Inc. (Norchem). Norchem manufactures and sells additives that enhance the durability of concrete, refractory material, and oil well conditioners. GMI sells silica fume (also known as microsilica), a by-product of its ferrosilicon metal and silicon metal production process, to Norchem, as well as other companies.

On November 20, 2006, the Company acquired Stein Ferroaleaciones S.A. (SFA), an Argentine manufacturer of silicon-based alloys, and SFA’s affiliate, UltraCore Polska Sp.z.o.o. (UCP). a Polish manufacturer of cored wire alloys. SFA has been renamed Globe Metales S.A. (Globe Metales). Globe Metales is headquartered in Buenos Aires, Argentina, and operates a silicon-based alloy manufacturing plant in Mendoza province, Argentina and cored wire packing plants in San Luis province, Argentina and Police, Poland. Globe Metales’ products are important ingredients in the manufacturing of steel, ductile iron, machine and auto parts, and pipe.

On January 31, 2007, the Company acquired Camargo Correa Metais S.A. (CCM), one of Brazil’s largest producers of silicon metal and silica fume. CCM was renamed Globe Metais Indústria e Comércio S.A. (Globe Metais). On November 5, 2009, the Company sold 100% of its interest in Globe Metais. The sale of the Company’s equity interest in Globe Metais was executed in connection with the sale of a 49% membership interest in WVA Manufacturing, LLC (WVA LLC), a newly formed entity by the Company, to Dow Corning Corporation (Dow Corning).

On February 29, 2008, the Company completed the acquisition of approximately 81% of Solsil, Inc. (Solsil). Solsil is continuing to develop its technology to produce upgraded metallurgical grade silicon through a proprietary metallurgical process for use in photovoltaic (solar) cells. Solsil remains focused on research and development and is not presently producing material for commercial sale. On December 6, 2011, the Company purchased all the shares held by one of Solsil’s minority partners.  Additionally, Solsil issued and sold new shares to the Company.  Subsequent to these stock purchase transactions the Company owns 97.25% of Solsil.

On May 15, 2008, the Company purchased an ownership interest of approximately 58% of Ningxia Yonvey Coal Industrial Co., Ltd (Yonvey). Yonvey is a producer of carbon electrodes, an important input in the silicon metal production process. Yonvey now principally supplies its electrodes to our subsidiaries. Yonvey’s operations are located in Chonggang Industrial Park, Shizuishan in the Ningxia Hui Autonomous Region of China. On November 28, 2008, the Company increased its interest by an additional 12%.

On April 1, 2010, the Company acquired Core Metals Group Holdings LLC (Core Metals). Core Metals is a leading producer, marketer, and distributor of ferroalloys and specialty materials for the North American steel and foundry industry.The acquisition was made to strengthen our growing ferrosilicon business and expand the line of products and services we offer to steel markets around the world.

On July 28, 2011, the Company acquired Alden Resources, LLC (Alden) and Gatliff Services, LLC (Gatliff), collectively known as Alden. Alden is North America’s leading miner, processor and supplier of specialty metallurgical coal to the silicon and silicon-based alloy industries. The acquisition was made in order to secure a stable, long-term and low-cost supply of specialty metallurgical coal, a key ingredient in the production of silicon metal and silicon-based alloys.

On June 13, 2012, the Company acquired Becancour Silicon Metal Inc.'s ("BSI") 51% equity interest in Quebec Silicon Limited Partnership ("QSLP"), collectively known as Quebec Silicon. The Company will operate Quebec Silicon’s silicon metal plant located in Becancour, Quebec with its joint venture partner Dow Corning.

See note 3 (Business Combinations, Investments, and Divestitures) for additional information regarding business combinations, investments, and divestitures.

(2)   Summary of Significant Accounting Policies

a.  Basis of Presentation and Principles of Consolidation

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). When the Company does not have a controlling interest in an entity, but exerts significant influence over the entity, the Company applies the equity method of accounting. For investments in which the Company does not have significant influence, the cost method of accounting is used.

The Company also evaluates the consolidation of entities under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 810, Consolidation (ASC 810). ASC 810 requires management to evaluate whether an entity or interest is a variable interest entity and whether the Company is the primary beneficiary. Consolidation is required if both of these criteria are met. The Company does not have any variable interest entities requiring consolidation.

All intercompany balances and transactions have been eliminated in consolidation.

b.  Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and related notes. Significant estimates and assumptions in these consolidated financial statements include the valuation of inventories; the depreciable lives for property, plant, and equipment; estimates of fair value associated with accounting for business combinations; goodwill and long-lived asset impairment tests; income taxes and deferred tax valuation allowances; valuation of derivative instruments; the determination of the discount rate and the rate of return on plan assets for pension expense (benefit); and the determination of the fair value of share-based compensation, involving assumptions about forfeiture rates, stock volatility, discount rates, expected dividend yield, and expected time to exercise. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates.

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c.  Revenue Recognition

Revenue is recognized in accordance with ASC Topic 605, Revenue Recognition (ASC 605), when a firm sales agreement is in place, delivery has occurred and title and risks of ownership have passed to the customer, the sales price is fixed or determinable, and collectability is reasonably assured. Shipping and other transportation costs charged to buyers are recorded in both net sales and cost of goods sold. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from net sales. When the Company provides a combination of products and services to customers, the arrangement is evaluated under ASC Subtopic 605-25, Revenue Recognition — Multiple Element Arrangements (ASC 605.25). ASC 605.25 addresses certain aspects of accounting by a vendor for arrangements under which the vendor will perform multiple revenue-generating activities. If the Company cannot objectively determine the fair value of any undelivered elements under an arrangement, the Company defers revenue until all elements are delivered and services have been performed, or until fair value can objectively be determined for any remaining undelivered elements.

d.  Foreign Currency Translation

The determination of the functional currency for the Company’s foreign subsidiaries is made based on appropriate economic factors, including the currency in which the subsidiary sells its products, the market in which the subsidiary operates, and the currency in which the subsidiary’s financing is denominated. Based on these factors, management has determined that the U.S. dollar is the functional currency for Globe Metales. The U.S. dollar was also the functional currency for Globe Metais prior to its divestiture. The functional currency for Yonvey is the Chinese renminbi. Yonvey’s assets and liabilities are translated using current exchange rates in effect at the balance sheet date and for income and expense accounts using average exchange rates. The functional currency for Quebec Silicon is the Canadian dollar. Quebec Silicon’s assets and liabilities are translated using current exchange rates in effect at the balance sheet date and for income and expense accounts using average exchange rates. Resulting translation adjustments are reported as a separate component of stockholders’ equity. Translation gains and losses are recognized on transactions in currencies other than the subsidiary’s functional currency and included in the consolidated statement of income for the period in which the exchange rates changed.

e.  Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments that are readily convertible into cash. Securities with contractual maturities of three months or less, when purchased, are cash equivalents. The carrying amount of these securities approximates fair value because of the short-term maturity of these instruments.

Refer to note 3 (Business Combinations, Investments, and Divestitures) and note 16 (Stockholders’ Equity) for supplemental disclosures of noncash investing and financing activities.

f.  Inventories

Inventories are valued at the lower of cost or market value, which does not exceed net realizable value. Cost of inventories is determined either by the first-in, first-out method or by the average cost method. When circumstances indicate a potential recoverability issue, tests are performed to assess the market value, and as necessary, an inventory write-down is recorded for obsolete, slow moving, or defective inventory. Management estimates market and net realizable value based on current and expected future selling prices for our inventories, as well as the expected utilization of parts and supplies in our manufacturing process.

g.  Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost. Depreciation is calculated using the straight-line method based on the estimated useful lives of assets. The estimated useful lives of property, plant, and equipment are as follows:

		Range of
		Useful Lives
Asset type:
	Land improvements and land use rights	20 to 36 years
	Buildings	35 to 40 years
	Manufacturing equipment	5 to 25 years
	Furnaces	10 to 20 years
	Other	2 to 5 years

Costs that do not extend the life of an asset, materially add to its value, or adapt the asset to a new or different use are considered repair and maintenance costs and expensed as incurred.

Cost for mineral properties and mine development costs, which are incurred to expand capacity of operating mines or to develop new mines, are capitalized and charged to operations based on the units-of production method over the estimated proven and probable reserve tons and based on the average useful life of the mine, respectively. Mine development costs include costs incurred for site preparation and development of the mines during the development stage.

h.  Business Combinations

When the Company acquires a business, the purchase price is allocated based on the fair value of tangible assets and identifiable intangible assets acquired, and liabilities assumed. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Goodwill as of the acquisition date is measured as the residual of the excess of the consideration transferred, plus the fair value of any noncontrolling interest in the acquiree at the acquisition date, over the fair value of the identifiable net assets acquired. If the fair value of the net assets acquired exceeds the purchase price, the resulting bargain purchase is recognized as a gain in the statement of income. Prior to the adoption of ASC Subtopic 805-10, Business Combinations (ASC 805-10), the resulting negative goodwill was allocated as a pro rata reduction of the values of acquired nonmonetary assets. The Company generally engages independent, third-party appraisal firms to assist in determining the fair value of assets acquired and liabilities assumed. Such a valuation requires management to make significant estimates, especially with respect to intangible assets. These estimates are based on historical experience and information obtained from the management of the acquired companies. These estimates are inherently uncertain. For all acquisitions, operating results are included in the consolidated statement of income from the date of acquisition.

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i.  Goodwill and Other Intangible Assets

Goodwill as of the acquisition date is measured as the residual of the excess of the consideration transferred, plus the fair value of any noncontrolling interest in the acquiree at the acquisition date, over the fair value of the identifiable net assets acquired. In accordance with ASC Topic 350, Intangibles — Goodwill and Other (ASC 350), goodwill is tested for impairment annually at the end of the third quarter, and will be tested for impairment between annual tests if an event occurs or circumstances change that more likely than not would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level. Reporting units are at the reportable segment level, or one level below the reportable segment level for our GMI and Other reportable segments, and are aligned with our management reporting structure. Goodwill relates and is assigned directly to a specific reporting unit.

Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds the implied fair value of goodwill of the reporting unit. Refer to note 3 (Business Combinations, Investments, and Divestitures) and note 7 (Goodwill and Other Intangibles) for additional information.

Trade names have indefinite lives and are not amortized but rather tested annually for impairment and written down to fair value as required.

j.  Impairment of Long-Lived Assets

In accordance with ASC Topic 360, Property, Plant, and Equipment (ASC 360), the Company reviews the recoverability of its long-lived assets, such as plant and equipment and definite-lived intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset or asset group from the expected future undiscounted pretax cash flows of the related operations. The Company assesses the recoverability of the carrying value of long-lived assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is measured based on the difference between estimated fair value and carrying value. Assets to be disposed are written down to the lower of carrying amount or fair value less costs to sell, and depreciation ceases. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary.

k.  Share-Based Compensation

The Company recognizes share-based compensation expense based on the estimated grant date fair value of share-based awards using a Black-Scholes option pricing model. Prior to vesting, cumulative compensation cost equals the proportionate amount of the award earned to date. The Company has elected to treat each award as a single award and recognize compensation cost on a straight-line basis over the requisite service period of the entire award. If the terms of an award are modified in a manner that affects both the fair value and vesting of the award, the total amount of remaining unrecognized compensation cost (based on the grant-date fair value) and the incremental fair value of the modified award are recognized over the amended vesting period.

Refer to note 18 (Share-Based Compensation) for further information on the Company’s accounting for share-based compensation.

l.  Restructuring Charges

Restructuring activities are programs planned and controlled by management that materially change either the scope of the business undertaken by the Company or the manner in which business is conducted. Restructuring activities include, but are not limited to, one-time termination benefits provided to current employees that are involuntarily terminated, costs to terminate a contract that is not a capital lease, and costs to consolidate facilities and relocate employees. Restructuring charges are recognized in accordance with ASC Topic 420, Exit or Disposal Cost Obligations (ASC 420), which requires a liability for a cost associated with an exit or disposal activity to be recognized at its fair value in the period in which the liability is incurred, except for a liability for one-time termination benefits that is incurred over time. In periods subsequent to initial measurement, changes to a restructuring liability are measured using the credit-adjusted risk-free rate that was used to measure the liability initially.

m.  Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of income in the period that includes the enactment date. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

The Company has adopted the amendment to ASC Subtopic 740-10, Income Taxes (ASC 740-10), which provides a comprehensive model for the recognition, measurement, and disclosure in financial statements of uncertain income tax positions that a company has taken or expects to take on a tax return. Under ASC 740-10, a company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Additionally, companies are required to accrue interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. The Company has elected to recognize interest expense and penalties related to uncertain tax positions as a component of its provision for income taxes.

n.  Financial Instruments

The Company accounts for derivatives and hedging activities in accordance with ASC Topic 815, Derivatives and Hedging (ASC 815). ASC 815 requires that all derivative instruments be recorded on the balance sheet at their respective fair values. The Company’s derivative instruments consist of an interest rate cap and interest rate swaps employed to manage interest rate exposures on long-term debt discussed in note 9 (Debt) and a power hedge and foreign exchange forward contracts to manage commodity price and foreign currency exchange exposures discussed in note 12 (Derivative Instruments).

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o.  Accounting Pronouncements to be Implemented

In June 2011, the FASB issued Accounting Standards Update No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (ASU 2011-05). The objective of this amendment is to increase the prominence of other comprehensive income in the financial statements. The amendments require entities to report components of net income and the components of other comprehensive income either in a continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, the amendments in ASU 2011-05 require an entity to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statements where the components of net income and the components of other comprehensive income are presented.  In December 2011, the FASB issued Accounting Standards Update No. 2011-12, which deferred the specific requirements related to the presentation of reclassification adjustments. This amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.We expect the adoption of this ASU will affect financial statement presentation only.

In September 2011, FASB issued Accounting Standards Update No. 2011-08, Testing Goodwill for Impairment (ASU 2011-08), which amends the guidance in ASC 350-20. The amendments in ASU 2011-08 provide entities with the option of performing a qualitative assessment before performing the first step of the two-step impairment test. If entities determine, on the basis of qualitative factors, it is not more likely than not that the fair value of the reporting unit is less than the carrying amount, then performing the two-step impairment test would be unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any. ASU 2011-08 also provides entities with the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to the first step of the two-step impairment test. ASU 2011-08 is effective for interim and annual periods beginning after December 15, 2011 but early adoption is permitted. The Company does not expect material financial statement implications relating to the adoption of this ASU.

(3)   Business Combinations, Investments, and Divestitures

Dow Corning Transactions:

On November 5, 2009, the Company sold 100% of its interest in Globe Metais pursuant to a purchase agreement entered into on that same date by and among the Company and Dow Corning. The cash received by the Company in connection with the disposition was approximately $65,600, which represents a purchase price of $75,000 less withholding taxes and certain expenses. Dow Corning assumed Globe Metais’ cash balances totaling $16,555 and $14,000 of export prepayment financing. The final purchase price was subject to adjustment for changes in working capital as provided for in the purchase agreement, which did not result in a significant change in the final purchase price.

The sale of the Company’s equity interest in Globe Metais was executed in connection with the sale of a 49% membership interest in WVA LLC, to Dow Corning, the execution of a long-term supply agreement, and an amendment to an existing supply agreement between Dow Corning and the Company to reduce the amount required to be sold in calendar year 2010 to 20,000 metric tons of silicon metal.

For accounting purposes, the Company allocated $75,000 of the total purchase price received from Dow Corning to the sale of the equity of Globe Metais and $100,000 to the sale of membership interests in WVA LLC. The allocation of total purchase price to the separate transactions was based on the relative fair values of Globe Metais and the membership interests in WVA LLC.

ASC 815.40 requires an entity to consolidate all subsidiaries over which it has a controlling financial interest and considers changes in the ownership interest while the entity retains its controlling financial interest in the subsidiary as equity transactions, resulting in no gain or loss recognition in the statement of income. As the Company retained a controlling financial interest in WVA LLC, no gain has been recognized in net income on the sale of the 49% membership interest. Rather, noncontrolling interest has been adjusted to reflect the change in our ownership interest in WVA LLC. The difference between the fair value of the consideration received, net of final purchase price adjustments, related transaction costs of $2,146, and provision for income taxes of $26,575, and the amount by which noncontrolling interest increased has been recognized as an increase in additional paid-in capital of $44,397.

Core Metals Group Holdings, LLC Transactions:

On April 1, 2010, the Company, pursuant to a Purchase and Sale Agreement dated as of March 26, 2010 (the Purchase Agreement), purchased from Ospraie Special Opportunities Master Alternative Holdings LLC, The Ospraie Fund L.P., Ospraie Holdings, Inc., and the individuals named in the Purchase Agreement, all of the ownership interests in Core Metals, a Delaware limited liability company, for approximately $52,000 in cash, including $15,329 borrowed under the Company’s senior revolving credit facility. The Company engaged a third-party appraisal firm to assist in the process of determining the estimated fair value of certain assets acquired. The Company finalized the purchase price allocation for the Core Metals acquisition during the quarter ended March 31, 2011. Goodwill totaling $1,274 has been recorded and assigned to the GMI operating segment.

On April 7, 2010, the Company sold Masterloy for $3,000 in cash. Masterloy was acquired in connection with the Company’s acquisition of Core Metals. Masterloy is a producer of ferrovanadium and ferromolybdenum, an ancillary business the Company does not consider critical to its fundamental business strategy.

In December 2010, the Company completed the divestiture of its 49% ownership interest in Fluorita de Mexico, S.A. de C.V. (FDM) for $2,500. The Company acquired its ownership interest in FDM in connection with the acquisition of Core Metals. FDM operates a fluorite ore mine and fluorspar processing plant located in Mexico, an ancillary business the Company does not consider critical to its fundamental business strategy. There was no gain or loss associated with the sale of the 49% ownership interest in FDM as the sales price was equal to the recorded book value of this investment.

Nigerian Mining Licenses:

In March 2011, the Company made irrevocable advances totaling approximately $17,000 to acquire through transfer exploration mining licenses in Nigeria to mine for manganese ore, a raw material used in the production of certain silicon and manganese based alloys. The transfer process was subject to regulatory approvals, which approvals have been received. The transfer of the licenses is complete and the Company may now begin to execute its operational plans.

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Alden Resources, LLC:

On July 28, 2011, the Company, pursuant to three Membership Interest Purchase Agreements dated as of May 27, 2011 (the Purchase Agreements), purchased from NGPC Asset Holdings II, LP, NGP Capital Resources Company, and all other parties named in the Purchase Agreements 100% of the membership interest of Alden Resources, LLC (Alden) and Gatliff Services, LLC (Gatliff), as well as certain royalty interests held by NGP Capital Resources Company, for $73,200 plus an additional $6,800 that could be payable to NGP Capital Resources Company pursuant to an earn-out payment upon the achievement of certain financial results and operational metrics. The Company financed the acquisition with $55,000 of bank debt and $18,200 of cash. Alden is North America’s leading miner, processor and supplier of specialty metallurgical coal to the silicon and silicon-based alloy industries. The acquisition was made in order to secure a stable, long-term and low-cost supply of specialty metallurgical coal, a key ingredient in the production of silicon metal and silicon-based alloys. The Company finalized the purchase price allocation as of June 30, 2012. The results of the businesses acquired are included in the GMI operating segment.

Quebec Silicon:

On June 13, 2012, the Company closed its acquisition of Becancour Silicon Metal Inc.'s ("BSI") 51% equity interest in Quebec Silicon Limited Partnership ("QSLP") and other working capital assets, collectively known as Quebec Silicon. The acquisition was financed using $31,800 from the Company's new $300,000 revolving credit facility discussed in note 9 (Debt) and $8,803 cash.  The Company will operate Quebec Silicon’s silicon metal plant and will purchase approximately 51% of its finished goods output at a price approximately equal to the fully loaded cost of production and sell the material to third party customers. Dow Corning has the right to purchase the other 49% of the plant's output at a price approximately equal to the fully loaded cost of production. This arrangement is similar to the Company's existing joint venture with Dow Corning at its Alloy, West Virginia plant. The Company has engaged a third-party appraisal firm to assist in the process of determining the estimated fair value of certain assets acquired. Based on the preliminary purchase price allocation, goodwill totaling $3,062 has been recorded in connection with the Quebec Silicon acquisition and assigned to the GMI operating segment.

(4)        Inventories

Inventories comprise the following at June 30:

			2012	2011
Finished goods		$	41,550	29,570
Work in process			403	2,078
Raw materials			62,957	67,213
Parts and supplies			14,531	10,431
	Total	$	119,441	109,292

At June 30, 2012, $112,418 in inventory is valued using the first-in, first-out method and $7,023 using the average cost method. At June 30, 2011, $102,478 in inventory is valued using the first-in, first-out method and $6,814 using the average cost method.

(5)        Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets comprise the following at June 30:

			2012	2011
Deferred taxes		$	4,681	5,766
Income tax receivables			6,450	3,777
Value added and other non-income tax receivables			4,370	3,391
Restricted cash			—	4,404
Other			12,414	10,538
	Total	$	27,915	27,876

(6)   Property, Plant, and Equipment

Property, plant, and equipment, net is comprised of the following at June 30:

			2012	2011
Land, land improvements, and land use rights		$	10,831	6,907
Building and improvements			76,395	43,076
Machinery and equipment			175,305	93,891
Furnaces			193,055	136,177
Mineral reserves			55,843	—
Mine development			4,058	—
Other			4,852	3,993
Construction in progress			23,616	23,743
	Property, plant, and equipment, gross		543,955	307,787
Less accumulated depreciation, depletion and amortization			(111,194)	(77,810)
	Property, plant, and equipment, net	$	432,761	229,977

Depreciation, depletion and amortization expense for the year ended June 30, 2012 was $34,848, of which $34,083 is recorded in cost of goods sold and $765 is recorded in selling, general, and administrative expenses, respectively. Depreciation, depletion and amortization expense for the year ended June 30, 2011 was $25,055, of which $24,330 is recorded in cost of goods sold and $725 is recorded in selling, general, and administrative expenses, respectively. Depreciation, depletion and amortization expense for the year ended June 30, 2010 was $20,362, of which $19,912 is recorded in cost of goods sold and $450 is recorded in selling, general, and administrative expenses, respectively.

Capitalized interest for the years ended June 30, 2012, 2011, and 2010 was $24, $52, and $376, respectively.

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(7)   Goodwill and Other Intangibles

Goodwill and other intangibles presented below have been allocated to the Company’s operating segments.

a.  Goodwill

Changes in the carrying amount of goodwill, by reportable segment, during the years ended June 30 are as follows:

				Globe
			GMI	Metales	Solsil	Other	Total
Balance at June 30, 2010
	Goodwill	$	30,405	14,313	57,656	7,307	109,681
	Accumulated impairment loss		—	—	(57,656)	—	(57,656)
			30,405	14,313	—	7,307	52,025
Core Metals purchase price allocation adjustments			1,124	—	—	—	1,124
Foreign exchange rate changes			—	—	—	354	354
Balance at June 30, 2011
	Goodwill		31,529	14,313	57,656	7,661	111,159
	Accumulated impairment loss		—	—	(57,656)	—	(57,656)
			31,529	14,313	—	7,661	53,503
Quebec Silicon acquisition			3,063	—	—	—	3,063
Foreign exchange rate changes			(1)	—	—	175	174
Balance at June 30, 2012
	Goodwill		34,591	14,313	57,656	7,836	114,396
	Accumulated impairment loss		—	—	(57,656)	—	(57,656)
		$	34,591	14,313	—	7,836	56,740

b.  Other Intangible Assets

 There were no changes in the value of the Company’s indefinite lived intangible assets during the years ended June 30, 2012 or 2011. The trade name balance is $477 at June 30, 2012 and 2011.

Amortization expense of purchased intangible assets for the years ended June 30, 2012, 2011 and 2010 was $0, $0 and $310, respectively, which is recorded in cost of goods sold. The carrying amount of definite lived intangible assets at both June 30, 2012 and June 30, 2011 is $0.

(8)        Investments in Unconsolidated Affiliates

Investments in unconsolidated affiliates comprise the following:

					Balance at	Balance at
			Ownership		June 30,	June 30,
			Interest		2012	2011
Equity method investment:
	Norchem		50.00%	$	3,244	2,667
Other cost investments:
	Inversora Nihuiles S.A.(a)		9.75%		3,067	3,067
	Inversora Diamante S.A.(b)		8.40%		2,906	2,906
		Total		$	9,217	8,640
(a)  This entity owns a 51% interest in Hidroelectrica Los Nihuiles S.A., which is a hydroelectric company in Argentina.
(b)  This entity owns a 59% interest in Hidroelectrica Diamante S.A., which is a hydroelectric company in Argentina.

Equity income from our Norchem investment was $577, $455, and $257, respectively, for the years ended June 30, 2012, 2011, and 2010, which is included in other income.

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(9)        Debt

a.  Short-Term Debt

Short-term debt comprises the following:

					Weighted
				Outstanding	Average		Unused
				Balance	Interest Rate		Credit Line
June 30, 2012:
Type debt:
	Export financing		$	—	—	$	9,269
	Other			317	5.00%		—
		Total	$	317		$	9,269
June 30, 2011:
Type debt:
	Export financing		$	731	2.75%	$	8,310
	Other			363	8.00%		—
		Total	$	1,094		$	8,310

Export Financing Agreements — The Company’s Argentine subsidiary maintains various short-term export financing agreements. Generally, these arrangements are for periods ranging between seven and eleven months, and require the Company to pledge as collateral certain export accounts receivable.

b.  Revolving Credit Agreements

A summary of the Company’s revolving credit agreements at June 30, 2012 is as follows:

			Weighted
		Outstanding	Average		Unused	Total
		Balance	Interest Rate		Commitment	Commitment
Revolving multi-currency credit facility	$	128,163	2.00%	$	171,837	300,000
Revolving credit facility		9,000	2.39%		11,000	20,000
Revolving credit agreement		3,223	5.00%		11,417	14,640

On May 31, 2012 the Company entered into a credit agreement which provides for a $300,000 five-year revolving multi-currency credit facility which includes provisions for the issuance of standby letters of credit, a $10,000 sublimit for swingline loans and a $25,000 sublimit letter of credit facility. The credit facility refinanced existing debt and closing costs of $96,550 and financed the acquisition of Quebec Silicon of $31,800. The credit facility currently provides an additional $171,800 of borrowing capacity. At the Company’s election, the credit facility may be increased from time to time by an amount up to $125,000 in the aggregate; such increase may be in the form of term loans or increases in the revolving credit line. The agreement contains provisions for adding domestic and foreign subsidiaries of the Company as additional borrowers under the credit facility. The agreement terminates on May 31, 2017 and requires no scheduled prepayments before that date. The Company classifies borrowings under this credit facility as long-term liabilities.

Interest on borrowings under the credit agreement is payable, at the Company’s election, at either (a) a base rate (the higher of (i) the U.S. federal funds rate plus 0.50% per annum, (ii) the Administrative Agent’s prime rate or (iii) an adjusted London Interbank Offered Rate for loans with a one month interest period plus 1.00% per annum plus a margin ranging from 0.75% to 1.50% per annum (such margin determined by reference to the leverage ratio set forth in the credit agreement), or (b) the adjusted London Interbank Offered Rate plus a margin ranging from 1.75% to 2.50% per annum (such margin determined by reference to the leverage ratio set forth in the credit agreement). Certain commitment fees are also payable under the credit agreement. The credit agreement contains various covenants. They include, among others, a maximum total debt to earnings before income tax, depreciation and amortization ratio, a minimum interest coverage ratio and a maximum capital expenditures covenant. The credit facility is guaranteed by certain of the Company’s domestic subsidiaries (the “Guarantors”). Borrowings under the credit agreement are collateralized by substantially all of the assets of the Company and the Guarantors, including certain real property, equipment, accounts receivable and inventory and the stock of certain of the Company’s and the Guarantors’ subsidiaries.

The Company was in compliance with the loan covenants at June 30, 2012, except as related to restrictions on capital expenditures. The Company received a waiver for the restriction limiting capital expenditures for the fiscal year ended June 30, 2012.

On October 1, 2010, the Company entered into a $15,000 revolving credit facility, and utilized proceeds from borrowings under the revolving credit facility to repay the Company’s $5,880 short-term notes payable to Dow Corning. On March 5, 2012, the Company entered into an agreement to amend the Company’s existing revolving credit facility. The amended agreement provides for a $20,000 revolving credit facility. Total borrowings under this revolving credit facility were $9,000 at June 30, 2012. Interest on advances under the revolving credit facility accrues at LIBOR plus an applicable margin percentage or, at the Company’s option, prime plus an applicable margin percentage. The credit facility is subject to certain restrictive and financial covenants, which include limits on additional debt, a maximum ratio of debt to earnings before interest, taxes, depreciation and amortization and minimum net worth. The Company was in compliance with the loan covenants at June 30, 2012. The Company classifies borrowings under this revolving credit facility as current liabilities as the arrangement is payable in full upon the earlier of 10 business days following written demand by the lender or the agreement’s expiration on June 30, 2013.

The Company’s subsidiary, Quebec Silicon, entered into a revolving credit agreement dated October 1, 2010 and amended on November 23, 2011, which provides for up to $15,000 Canadian Dollars to fund Quebec Silicon’s working capital requirements. Funding under the revolving credit agreement is available upon request at any time, up to the full amount of the unused credit commitment and subject to continued compliance. Interest on borrowings under the credit agreement is payable at a variable rate of Canadian prime plus 2.00% (5.00% at June 30, 2012), payable quarterly. The credit agreement expires on October 1, 2013, and may be terminated earlier, at the lender’s discretion. All of Quebec Silicon’s assets, properties and revenues have been pledge as security for Quebec Silicon’s obligations under the revolving credit agreement. As of June 30, 2012, $3,223 ($3,304 Canadian Dollars) was outstanding under the facility.

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On March 30, 2011, certain of the Company’s domestic subsidiaries (the Borrowers) entered into an agreement to amend and restate the Company’s existing senior credit facility and senior term loan. The amended and restated senior credit agreement provides for a $90,000 revolving credit facility, subject to a defined borrowing base, and matures on March 30, 2014. This facility includes a provision for the issuance of standby letters of credit and a $10,000 sublimit for swingline loans. The facility may be increased from time to time by an amount up to $10,000 in the aggregate at the Company’s election, subject to approval by the existing or additional lenders. Interest on borrowings under the credit agreement is payable, at the Company’s election, at either a base rate (the higher of the U.S. federal funds rate plus 0.50% per annum and the issuing bank’s “prime rate”) plus a margin of 1.50% per annum, or LIBOR plus a margin of 2.25% per annum. Certain commitment fees are also payable under the credit agreement. The facility is guaranteed by certain of the Borrowers’ subsidiaries, and borrowings under the credit agreement are collateralized by the Borrowers’ cash and cash equivalents, accounts receivable, and inventories, and the stock of their subsidiaries. Outstanding balances on this term loan were paid down and refinanced with the revolving multi-currency credit facility the Company entered into on May 31, 2012.

See note 12 (Derivative Instruments) for a discussion of derivative financial instruments entered into to reduce the Company’s exposure to interest rate fluctuations on outstanding debt.

c.  Long-Term Debt

The Company’s subsidiary, GBG Holdings, LLC, entered into a three-year term loan in an aggregate principal amount of $50,000 in July 2011. Interest on the term loan accrues at LIBOR plus an applicable margin percentage. Outstanding balances on this term loan were paid down and refinanced with the revolving multi-currency credit facility the Company entered into on May 31, 2012.

d.  Fair Value of Debt

The recorded carrying values of our debt balances approximate fair value given our debt is at variable rates tied to market indicators or is short-term in nature.

(10)      Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities comprise the following at June 30:

			2012	2011
Accrued wages, bonuses, and benefits		$	12,135	11,877
Acquired contract obligations			7,173	—
Deferred revenue			4,909	—
Accrued income taxes			3,846	4,257
Current portion of capital lease obligations			2,544	—
Current portion of retained acquisition contingencies			1,479	10,931
Accrued insurance			1,297	758
Accrued property taxes			1,149	1,161
Accrued professional fees			524	1,093
Deferred taxes			49	36
Other			5,497	4,362
	Total	$	40,602	34,475

(11)      Other Long-Term Liabilities

Other long-term liabilities comprise the following at June 30:

			2012	2011
Accrued pension and postretirement benefits liability		$	34,076	7,716
Capital lease obligations			11,742	—
Acquired contract obligations			10,949	—
Retained acquisition contingencies			4,931	5,791
Asset retirement obligations			3,424	—
Other			5,681	3,717
	Total	$	70,803	17,224

(12)      Derivative Instruments

The Company enters into derivative instruments to hedge certain interest rate, currency, and commodity price risks. The Company does not engage in interest rate, currency, or commodity speculation, and no derivatives are held for trading purposes. All derivatives are accounted for using mark-to-market accounting. The Company believes it is not practical to designate its derivative instruments as hedging instruments as defined under ASC Subtopic 815-10, Derivatives and Hedging (ASC 815). Accordingly, the Company adjusts its derivative financial instruments to current market value through the consolidated statement of income based on the fair value of the agreement as of period-end. Although not designated as hedged items as defined under ASC 815, these derivative instruments serve to significantly offset the Company’s interest rate, currency, and commodity risks. Gains or losses from these transactions offset gains or losses on the assets, liabilities, or transactions being hedged. No credit loss is anticipated as the counterparties to these agreements are major financial institutions that are highly rated.

Interest Rate Risk:

The Company is exposed to market risk from changes in interest rates on certain of its short-term and long-term debt obligations. The Company has historically utilized interest rate swaps and interest rate cap agreements to reduce our exposure to interest rate fluctuations. All interest rate derivatives were settled when the Company closed on the $300,000 revolving multi-currency credit facility discussed in note 9 (Debt).

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Foreign Currency Risk:

The Company is exposed to market risk arising from changes in currency exchange rates as a result of its operations outside the United States, principally in Argentina, China and Canada. A portion of the Company’s net sales generated from its non-U.S. operations is denominated in currencies other than the U.S. dollar. Most of the Company’s operating costs for its non-U.S. operations are denominated in local currencies, principally the Argentine peso and the Chinese renminbi. Consequently, the translated U.S. dollar value of the Company’s non-U.S. dollar net sales, and related accounts receivable balances, and our operating costs are subject to currency exchange rate fluctuations. Derivative instruments are not used extensively to manage this risk. At June 30, 2012, the Company had foreign exchange forward contracts covering approximately 7,500 Euro, expiring at dates ranging from September 2012 to November 2012, at an average exchange rate of 1.30 Canadian dollar to 1.00 Euro.

Commodity Price Risk:

The Company is exposed to price risk for certain raw materials and energy used in its production process. The raw materials and energy that the Company uses are largely commodities subject to price volatility caused by changes in global supply and demand and governmental controls. Derivative financial instruments are not used extensively to manage the Company’s exposure to fluctuations in the cost of commodity products used in its operations. The Company attempts to reduce the impact of increases in its raw material and energy costs by negotiating long-term contracts and through the acquisition of companies or assets for the purpose of increasing its access to raw materials with favorable pricing terms.

In June 2010, the Company entered into a power hedge agreement on a 175,440 MWh notional amount of electricity, representing approximately 20% of the total power required by our Niagara Falls, New York plant. This hedge covers our expected needs not supplied by the facility’s long-term power contract over the term of the hedge agreement. The notional amount decreases equally per month through the agreement’s expiration on June 30, 2012. Under the power hedge agreement, the Company fixed the power rate at $39.60 per MWh over the life of the contract. In October 2010, the Company entered into a power hedge agreement on an 87,600 MWh notional amount of electricity, also for power required at our Niagara Falls, New York plant. The notional amount decreases equally per month from the agreement’s July 1, 2012 effective date through its expiration on June 30, 2013. Under this power hedge agreement, the Company fixed the power rate at $39.95 per MWh over the life of the contract.

The effect of the Company’s derivative instruments on the consolidated statements of income is summarized in the following table:

		(Loss) Gain Recognized
		During
		the Years Ended June 30			Location
		2012	2011	2010	of (Loss) Gain
Interest rate derivatives	$	(119)	(252)	(1,231)	Interest expense
Foreign exchange forward contracts		20	(190)	772	Foreign exchange gain (loss)
Power hedge		(1,272)	173	(243)	Cost of goods sold

The fair values of the Company’s derivative instruments at June 30, 2012 are summarized in note 19 (Fair Value Measures). The liability associated with the Company’s power hedge of $742 is included in other long-term liabilities, and the liability associated the Company’s foreign exchange forward contracts of $20 is included in accrued expenses and other current liabilities. The company holds no interest rate derivatives at June 30, 2012.

(13)      Benefit Plans

a.  Defined Benefit Retirement Plans

The Company’s subsidiary, GMI, sponsors three noncontributory defined benefit pension plans covering certain employees. These plans were frozen in 2003. The Company’s subsidiary, Core Metals, sponsors a noncontributory defined benefit pension plan covering certain employees. This plan was closed to new participants in April 2009.

The Company’s subsidiary, Quebec Silicon, sponsors a contributory defined benefit pension plan and postretirement benefit plan for certain employees, based on length of service and remuneration. Postretirement benefits consist of a group insurance plan covering plan members for life insurance, disability, hospital, medical, and dental benefits.

The Company’s funding policy has been to contribute, as necessary, an amount in excess of the minimum requirements in order to achieve the Company’s long-term funding targets. During the years ended June 30, 2012 and 2011, the Company made contributions of $2,482 and $1,080, respectively, to the pension plans.

The Company uses a June 30 measurement date for these defined benefit plans.

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Benefit Obligations and Funded Status — The following provides a reconciliation of the benefit obligations, plan assets, and funded status of the plans at June 30, 2012 and 2011:

				Pension Plans			Nonpension Postretirement Plan
				2012	2011		2012	2011
Change in benefit obligations:
	Benefit obligations at beginning of year		$	30,218	28,367	$	—	—
	Acquisition of business			23,827	—		11,906	—
	Interest cost			1,553	1,439		—	—
	Service cost			102	114		—	—
	Amendments			465	—		—	—
	Actuarial loss			6,860	1,698		—	—
	Benefits paid			(1,430)	(1,400)		—	—
		Benefit obligations at end of year	$	61,595	30,218	$	11,906	—
Change in plan assets:
	Fair value of plan assets at beginning of year		$	22,502	19,249	$	—	—
	Acquisition of business			14,328	—		—	—
	Actual gain on plan assets			1,543	3,573		—	—
	Employer contributions			2,482	1,080		—	—
	Benefits paid			(1,430)	(1,400)		—	—
		Fair value of plan assets at end of year	$	39,425	22,502	$	—	—
Funded status at end of year:
	Fair value of plan assets		$	39,425	22,502	$	—	—
	Benefit obligations			61,595	30,218		11,906	—
		Funded status	$	(22,170)	(7,716)	$	(11,906)	—
Amounts recognized in the consolidated balance sheet consist of:
	Noncurrent liability		$	(22,170)	(7,716)	$	11,802	—
	Current liability			—	—		104	—
	Accumulated other comprehensive loss			13,008	6,356		—	—

All of our pension and postretirement plans are underfunded, and have been underfunded for all years presented. The amounts recognized in other comprehensive (loss) income consist entirely of net actuarial loss during the years ended June 30, 2012, 2011, and 2010 and totaled ($6,652), $1,066, and ($1,402), respectively.

At June 30, 2012 and 2011, the accumulated benefit obligations were $61,595 and $30,218, respectively, for defined benefit pension plans and $11,906 and $0, respectively, for the defined postretirement benefit plan.

Net Periodic Pension Expense — The components of net periodic pension expense (benefit) for the Company’s defined benefit pension plans are as follows:

			2012	2011	2010
Interest cost		$	1,553	1,439	1,285
Service cost			102	114	26
Expected return on plan assets			(1,737)	(1,487)	(1,075)
Amortization of net loss			866	678	572
	Net periodic pension expense	$	784	744	808

In fiscal year 2013, actuarial net losses of approximately $1,774 are expected to be recognized into periodic benefit cost from accumulated other comprehensive loss.

Assumptions and Other Data — The assumptions used to determine benefit obligations at June 30, 2012 and 2011 follow:

	Pension Plans		Nonpension Postretirement Plans
	2012	2011	2012	2011
Discount rate	3.5% - 5.0%	5.25% - 5.30%	5.10%	—

The discount rate used in calculating the present value of our pension plan obligations is developed based on the Citigroup Pension Discount Curve for both the GMI plans and Core Metals plan, and the Mercer Yield Curve for Quebec Silicon pension and postretirement benefit plans and the expected cash flows of the benefit payments.

The assumptions used to determine net periodic expense for the Company’s defined benefit pension plans for years ended June 30, 2012, 2011, and 2010 are as follows:

	2012	2011	2010
Discount rate	5.00% - 5.30%	5.25%	5.85% - 6.25%
Expected return on plan assets	5.50% - 8.00%	8.00% - 8.50%	8.00% - 8.50%

Expected return on plan assets is determined based on management’s expectations of long-term average rates of return on funds invested to provide for benefits included in the projected benefit obligations. In determining the expected return on plan assets, the Company takes into account historical returns, plan asset allocations and related investment strategies, as well as the outlook for inflation and overall fixed income and equity returns.

The Company expects to make discretionary contributions of approximately $4,128 to the pension plans for the year ending June 30, 2013.

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The following reflects the gross benefit payments that are expected to be paid for the benefit plans for the years ended June 30:

		Pension Plans		Nonpension Postretirement Plans
2013	$	2,555	$	104
2014		2,788		153
2015		2,981		209
2016		3,193		259
2017		3,305		303
Years 2018-2022		17,398		2,066

The accumulated nonpension postretirement benefit obligation has been determined by application of the provisions of the Company’s health care and life insurance plans including established maximums, relevant actuarial assumptions and health care cost trend rates projected at 8.5% for fiscal 2013 and decreasing to an ultimate rate of 4.5% in fiscal 2027. The effect of a 1% increase in health care cost trend rate on nonpension postretirement benefit obligation is $2,801. The effect of a 1% decrease in health care cost trend rate on nonpension postretirement benefit obligation is ($2,134).

The Company’s overall strategy is to invest in high-grade securities and other assets with a limited risk of market value fluctuation. In general, the Company’s goal is to maintain the following allocation ranges:

Equity securities	55 - 70%
Fixed income securities	30 - 40
Real estate	5 - 10

The fair values of the Company’s pension plan assets as of June 30, 2012 are as follows:

			Quoted Prices in Active Markets for Identical Assets	Significant Observable Inputs
			(Level 1)	(Level 2)	Total
Cash and cash equivalents		$	418	—	418
Equity securities:
	Domestic equity mutual funds		4,307	—	4,307
	International equity mutual funds		3,707	—	3,707
	Commingled domestic equity funds		—	3,253	3,253
	Commingled international equity funds		—	6,339	6,339
Fixed income securities:					—
	Fixed income mutual funds		9,348	—	9,348
	Commingled fixed income funds		—	11,082	11,082
Real estate mutual funds			971	—	971
		$	18,751	20,674	39,425

The fair values of the Company’s pension plan assets as of June 30, 2011 are as follows:

			Quoted Prices in Active Markets for Identical Assets	Significant Observable Inputs
			(Level 1)	(Level 2)	Total
Cash and cash equivalents		$	341	—	341
Equity securities:
	Domestic equity mutual funds		5,083	—	5,083
	International equity mutual funds		2,573	—	2,573
	Commingled domestic equity funds		—	3,374	3,374
Fixed income securities:					—
	Fixed income mutual funds		8,212	—	8,212
	Commingled fixed income funds		—	2,037	2,037
Real estate mutual funds			882	—	882
		$	17,091	5,411	22,502

See note 19 (Fair Value Measures) for additional disclosures related to the fair value hierarchy. The Company held no level 3 assets during the year.

b.  Other Benefit Plans

The Company administers healthcare benefits for certain retired employees through a separate welfare plan requiring reimbursement from the retirees.

The Company’s subsidiary, GMI, provides two defined contribution plans (401(k) plans) that allow for employee contributions on a pretax basis. During fiscal year 2008, the Company agreed to match 25% of participants’ contributions up to a maximum of 6% of compensation. Company matching contributions for the years ended June 30, 2012, 2011, and 2010 were $330, $202, and $223, respectively. Additionally, subsequent to the acquisition of Core Metals as discussed in note 3 (Business Acquisitions, Investments, and Divestitures), the Company began sponsoring the Core Metals defined contribution plan. Under the plan the Company may make discretionary payments to salaried and non-union participants in the form of profit sharing and matching funds. Company matching contributions for the years ended June 30, 2012, 2011, and 2010 were $102, $111, and $26, respectively.

Other benefit plans offered by the Company include a Section 125 cafeteria plan for the pretax payment of healthcare costs and flexible spending arrangements.

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(14)      Income Taxes

The sources of income before provision for income taxes and income attributable to noncontrolling interest for the years ended June 30, 2012, 2011, and 2010 were as follows:

			2012	2011	2010
U.S. operations		$	73,859	87,096	21,865
Non-U.S. operations			12,777	5,618	32,942
	Total	$	86,636	92,714	54,807

The components of current and deferred income tax expense are as follows:

				2012	2011	2010
Current:
	Federal		$	13,506	16,113	10,471
	State			1,996	1,982	2,686
	Foreign			3,946	4,355	14,446
		Total current		19,448	22,450	27,603
Deferred:
	Federal			8,257	12,622	(3,745)
	State			1,244	1,107	(3,315)
	Foreign			(189)	(191)	(4)
		Total deferred		9,312	13,538	(7,064)
		Total provision for income taxes	$	28,760	35,988	20,539

The following is a reconciliation, stated in percentage, of the U.S. statutory federal income tax rate to our effective tax rate for the years ended June 30, 2012, 2011, and 2010:

		2012	2011	2010
Federal statutory rate		35.0%	35.0%	35.0%
State taxes, net of federal benefit		2.4	2.6	(3.6)
Foreign tax holiday and rate differential		(1.8)	0.7	2.3
Change in valuation allowance		1.1	(0.2)	5.5
Domestic production activities deduction		(1.9)	(1.7)	(1.2)
Other items		(1.6)	2.4	(0.5)
	Effective tax rate	33.2%	38.8%	37.5%

The Company operated under a tax holiday in Argentina, where the Company’s manufacturing income was taxed at a preferential rate, which varied based on production levels from the Company’s Argentine facilities, compared to a statutory rate of 35%. The tax holiday in Argentina expired in June 2012. For the year ended June 30, 2012, the foreign tax holiday in Argentina provided a benefit of $144 to net income and no impact to earnings per share.

As of June 30, 2012, we had approximately $80,000 of undistributed foreign earnings. We intend to continue to reinvest earnings outside the U.S. for the foreseeable future, and therefore, have not recognized any U.S. tax expense on these earnings.

Significant components of the Company’s deferred tax assets and deferred tax liabilities at June 30, 2012 and 2011 consist of the following:

				2012	2011
Deferred tax assets:
	Inventories		$	3,676	2,414
	Accounts receivable			198	139
	Accruals			9,322	6,673
	Deferred Revenue			178	298
	Net operating losses and other carryforwards			16,223	17,999
	Other assets			901	259
	Share-based compensation			5,104	4,868
		Gross deferred tax assets		35,602	32,650
	Valuation allowance			(10,340)	(8,754)
		Net deferred tax assets		25,262	23,896
Deferred tax liabilities:
	Fixed assets			(46,257)	(39,340)
	Prepaid expenses			(1,861)	(899)
	Intangibles			(1,147)	(974)
		Total deferred tax liabilities		(49,265)	(41,213)
		Net deferred tax liabilities	$	(24,003)	(17,317)

The Company has tax benefits for net operating loss carry forwards (NOLs), a portion of which are subject to various limitations, which expire at various dates in the future. The Company’s NOLs and expiration dates at June 30, 2012 are as follows:

		Amount	Expires
Federal	$	23,204	2024 through 2026
State		105,123	2013 through 2031
Foreign		9,074	2013 through 2021

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The Company maintains valuation allowances where it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances are included in our tax provision in the period of change. In determining whether a valuation allowance is warranted, the Company evaluates factors such as prior earnings history, expected future earnings, carry back and carry forward periods and tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. For the year ended June 30, 2012, the increase in the valuation allowance of $1,586 was primarily attributable to the Company’s net operating loss carryforwards in China and a corresponding adjustment to the valuation allowance resulting in no net impact on the Company’s provision for income taxes. For the year ended June 30, 2011, the decrease in the valuation allowance of $4,743 was primarily attributable to a decrease in the Company’s net operating loss carryforwards in China due to taxable income in 2011 and a corresponding adjustment to the valuation allowance resulting in no net impact on the Company’s provision for income taxes.

The total valuation allowance at June 30, 2012, 2011, and 2010 is $10,340, $8,754, and $13,497, respectively, and consists of the following:

		2012	2011	2010
Federal NOLs	$	4,100	4,100	3,848
State NOLs		857	819	1,055
Foreign NOLs		2,787	1,229	5,781
Federal credits		236	235	463
State credits		2,360	2,371	2,350
Total	$	10,340	8,754	13,497

The Company files a consolidated U.S. income tax return and tax returns in various state and local jurisdictions. Our subsidiaries also file tax returns in various foreign jurisdictions. The Company’s principal jurisdictions include the U.S., Canada, Argentina, and China. The number of open tax years subject to examination varies depending on the tax jurisdiction. The Company’s major taxing jurisdictions and the related open tax years subject to examination are as follows: the U.S. from 2009 to present, Argentina from 2006 to present, and China from 2009 to present.

General accounting principles relating to uncertain income tax positions prescribe a minimum recognition threshold a tax position is required to meet before being recognized, and provides guidance on the derecognition, measurement, classification and disclosure relating to income taxes. The following is a tabular reconciliation of the total amount of unrecognized tax benefits for the year, excluding interest and penalties:

		2012	2011	2010
Balance at the beginning of the year	$	774	2,039	—
Gross increases for prior year tax positions		—	206	2,039
Gross decreases for prior year tax positions		(252)	(1,471)	—
Balance at the end of the year	$	522	774	2,039

The Company has elected to include interest and penalties in its income tax expense. Included in our liability for uncertain tax positions are interest and penalties of $76, $145, and $336 for the years ended June 30, 2012, 2011, and 2010, respectively. For the years ended June 30, 2012, 2011, and 2010, we recognized $42, ($149), and $268, respectively, of interest and penalties in income tax benefit/provision. The Company believes that it is reasonably possible that approximately $146 of its currently remaining uncertain tax position liability may be recognized within the next twelve months. The portion of uncertain tax positions as of June 30, 2012 that would, if recognized, impact the effective tax rate was $522, $774, and $629 as of June 30, 2012, 2011, and 2010, respectively.

(15)      Commitments and Contingencies

a.  Legal Contingencies

The Company is subject to various lawsuits, claims, and proceedings that arise in the normal course of business, including employment, commercial, environmental, safety, and health matters, as well as claims associated with our historical acquisitions and divestitures. Although it is not presently possible to determine the outcome of these matters, in the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity.

During the year ended June 30, 2011, the Company made escrow deposits and received payments totaling $2,038 and accrued $4,249 for working capital claims associated with our historical acquisitions.

b.  Environmental Contingencies

It is the Company’s policy to accrue for costs associated with environmental assessments, remedial efforts, or other environmental liabilities when it becomes probable that a liability has been incurred and the costs can be reasonably estimated. When a liability for environmental remediation is recorded, such amounts will be recorded without giving effect to any possible future recoveries. At June 30, 2012, there are no significant liabilities recorded for environmental contingencies. With respect to the cost for ongoing environmental compliance, including maintenance and monitoring, such costs are expensed as incurred unless there is a long-term monitoring agreement with a governmental agency, in which case a liability is established at the inception of the agreement.

c.  Asset Retirement Obligations

As of June 30, 2012 and 2011, the Company has recorded asset retirement obligation accruals for mine reclamation and closure costs totaling $5,731 and $888, respectively. There were no assets that were legally restricted for purposes of settling asset retirement obligations at June 30, 2012 or 2011.

d.  Employee Contracts

As of June 30, 2012, the Company had 1,493 employees. The Company’s total employees consist of 458 salaried employees and 1,035 hourly employees, and include 665 unionized employees. 44.5% of the workforce is covered by collective bargaining agreements and 17.3% of the workforce is covered by collective bargaining agreements expiring within one year of June 30, 2012.

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e.  Power Commitments

Electric power is a major cost of the Company’s production process as large amounts of electricity are required to operate arc furnaces. A summary of electric power commitments follows:

Facility	Supplier	Terms	Price Structure	Capacity
Alloy, West Virginia	Appalachian Power	Through October 30, 2012, 1-year termination notice	Published tariff rate	110 MW interruptible
Alloy, West Virginia	Brookfield Power	Through December 31, 2021	Fixed rate	100 MW (hydro power)
Beverly, Ohio	American Electric Power	Evergreen, 1-year termination notice	Published tariff rate	2.5 MW firm 85 MW interruptible
Niagara Falls, New York	New York Power Authority	Through September 30, 2021	Based on the EP and RP commodity agreement	32.6 MW replacement 7.3 MW expansion
Selma, Alabama	Alabama Power	Evergreen, 1-year termination notice	Published tariff rate	2.15 MW firm 40.85 MW interruptible
Bridgeport, Alabama	Tennessee Valley Authority	Through April 30, 2020, 2-year termination notice	Fixed rate, reset annually	10MW firm 30MW interruptible
Becancour, Quebec	Hydro Quebec	Through November 3, 2012	Published tariff rate	2.0 MW firm 80 MW interruptible

On February 24, 2011, the Company entered into a hydropower contract extension agreement with the New York Power Authority. Under the terms of this commodity purchase agreement, the Company will be supplied up to a maximum of 40,000 kW of hydropower from the Niagara Power Project to operate its Niagara Falls, New York facility. The hydropower will be supplied at preferential power rates plus market-based delivery charges through September 30, 2021. Under the terms of the contract, the Company has committed to specified employment, power utilization, and capital investment levels, which, if not met, could reduce the Company’s power allocation from the Niagara Power Project.

e.  Joint Development Supply Agreement

On April 24, 2008, the Company’s subsidiaries, Solsil and GMI, entered into a technology license, joint development and supply agreement with BP Solar International Inc. (BP Solar) for the sale of solar grade silicon. As part of this agreement, BP Solar paid Solsil $10,000 as an advance for research and development services and facilities construction. In accordance with ASC 605.25, revenue associated with this agreement was deferred until specific contract milestone had been achieved, or research development services were successful in reducing manufacturing costs. Revenue would then would be recognized ratably as product was delivered to BP Solar, or, if research and development services were performed, but unsuccessful, deferred until contract expiration. In November 2010, the technology license, joint development and supply agreement was terminated, $9,400 in previously deferred revenue was recognized by the Company, and the Company made a $600 payment to BP Solar.

f.  Lease Commitments

The Company leases certain machinery and equipment, automobiles, railcars and office space. For the years ended June 30, 2012, 2011, and 2010, lease expense was $3,527, $3,173, and $2,191, respectively.

Minimum rental commitments under noncancelable operating and capital leases outstanding at June 30, 2012 for the fiscal years of 2013 onward are as follows:

		2013	2014	2015	2016	2017	Thereafter
Operating lease obligations	$	3,266	2,053	846	181	—	—
Capital lease obligations		2,544	2,562	2,445	2,505	2,213	2,029

(16)      Stockholders’ Equity

a.  Common Stock

In August 2009, the Company closed on an initial public offering on the NASDAQ Global Select Market of 16,100,000 shares of its common stock at $7.00 per share. Of the shares offered, 5,600,000 new shares were offered by the Company and 10,500,000 existing shares were offered by selling stockholders (which included 2,100,000 shares sold by the selling stockholders pursuant to the exercise of the underwriters’ over-allotment option). Total proceeds of the offering to the Company were $36,456, net of underwriting discounts and commissions totaling $2,744.

b.  Preferred Stock

The Company is authorized to issue one million shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the board of directors. To date, no preferred stock has been issued by the Company.

c.  Warrants

In connection with the Company’s initial public offering on the AIM market of the London Stock Exchange on October 3, 2005, the Company sold 33,500,000 units, consisting of one share of the Company’s common stock and two redeemable common stock purchase warrants. Also in connection with this initial public offering, the Company issued an option to purchase 1,675,000 units (individually, UPO) at an exercise price of $7.50 per UPO. Each UPO consists of one share of the Company’s common stock and two redeemable common stock purchase warrants. All of the Company’s warrants had an exercise price of $5.00 per common share and were scheduled to expire on October 3, 2009.

During the year ended June 30, 2008, 699,440 of the warrants issued in connection with the Company’s initial public offering were exercised and an additional 100,262 warrants and 50,131 common shares were issued in connection with a cashless exercise of 67,458 UPOs.

55

During the year ended June 30, 2009, 166,668 of the warrants issued in connection with the Company’s initial public offering were exercised and an additional 485,505 warrants and 242,753 common shares were issued in connection with a cashless exercise of 282,128 UPOs. Also during the year ended June 30, 2009, the Company executed a warrant exchange program under which it agreed to exchange 5.5 warrants for one share of the Company’s common stock. A total of 19,164,294 warrants were converted to 3,484,417 common shares under this exchange program.

Prior to the expiration date, the Company received exercise notifications from the holders of substantially all of the outstanding warrants and UPOs. The holders of the UPOs exercising their UPOs also immediately exercised the warrants issuable upon the exercise of their UPOs. As a result of all of these exercises, the Company issued 1,775,933 shares of common stock to the former holders of the warrants and UPOs, and no warrants or UPOs remain outstanding at June 30, 2010. The Company received $1,497 in cash with respect to these exercises, and the remainder of the shares were issued on a net, cashless basis. The sales and issuances of shares pursuant to the warrant and UPO exercises were deemed to be exempt from registration under the Securities Act of 1933 by virtue of Section 4(2) pertaining to private offers and sales or Regulation S pertaining to foreign offers and sales.

The Company has accounted for all warrant transactions as a component of stockholders’ equity.

d.  Treasury Stock

In December 2008, the Company’s board of directors approved a share repurchase program that authorized the Company to repurchase up to $25,000 of the Company’s common stock during the ensuing six months. The program did not obligate the Company to acquire any particular amount of shares. 1,000 shares were repurchased at $4.00 per share under this program.

In connection with the Company’s acquisition of approximately 81% of Solsil in February 2008, 562,867 of the 5,628,657 shares issued to the former shareholders and optionholders of Solsil were placed into escrow pending the attainment of certain milestones. In April 2008, 281,430 of these escrow shares were released based on the satisfaction of certain conditions. Upon expiration of the escrow period in February 2011, the remaining 281,437 escrow shares were returned to the Company and are now included in treasury stock at cost, which is equal to their par value.

e.  Noncontrolling Interest

As discussed in note 3, the Company recorded an increase in noncontrolling interest of $27,012 in association with the sale of a 49% membership interest in WVA LLC on November 5, 2009.

As discussed in note 3, the Company recorded an increase in noncontrolling interest of $46,762 in association with the purchase of 51% interest in Quebec Silicon on June 13, 2012.

f. Dividend

On September 16, 2010, the Company’s board of directors approved a dividend of $0.15 per common share. The dividend, totaling $11,269, was paid on October 29, 2010, to stockholders of record as of October 15, 2010.

On September 21, 2011, the Company’s board of directors approved a dividend of $0.20 per common share. The dividend, totaling $15,007, was paid on October 28, 2011, to stockholders of record as of October 14, 2011.

g. Solsil Share Purchase

On December 6, 2011, the Company purchased all the shares held by one of Solsil’s minority partners for $150. Additionally, Solsil issued and sold new shares to the Company for $3,500. Subsequent to these stock purchase transactions the Company owns 97.25% of Solsil.

(17)      Earnings Per Share

Basic earnings per common share are calculated based on the weighted average number of common shares outstanding during the years ended June 30, 2012, 2011, and 2010, respectively. Diluted earnings per common share assumes the exercise of stock options, the conversion of warrants, and the exercise of UPOs, provided in each case the effect is dilutive.

The reconciliation of the amounts used to compute basic and diluted earnings per common share for the years ended June 30, 2012, 2011, and 2010 is as follows:

		2012	2011	2010
Basic earnings per share computation
Numerator:
Net income attributable to Globe Specialty Metals, Inc.	$	54,570	52,808	34,101
Denominator:
Weighted average basic shares outstanding		75,038,674	74,924,947	73,511,696
Basic earnings per common share	$	0.73	0.70	0.46
Diluted earnings per share computation
Numerator:
Net income attributable to Globe Specialty Metals, Inc.	$	54,570	52,808	34,101
Denominator:
Weighted average basic shares outstanding		75,038,674	74,924,947	73,511,696
Effect of dilutive securities		1,585,218	1,699,398	1,258,451
Weighted average diluted shares outstanding		76,623,892	76,624,345	74,770,147
Diluted earnings per common share	$	0.71	0.69	0.46

The following potential common shares were excluded from the calculation of diluted earnings per common share because their effect would be anti-dilutive:

	2012	2011	2010
Stock options	1,101,079	66,667	160,000

56

(18)      Share-Based Compensation

a.  Stock Plan

The Company’s share-based compensation program consists of the Globe Specialty Metals, Inc. 2006 Employee, Director and Consultant Stock Plan (the Stock Plan). The Stock Plan was initially approved by the Company’s stockholders on November 10, 2006, and was amended and approved by the Company’s stockholders on December 6, 2010 to increase by 1,000,000 the number of shares of common stock authorized for issuance under the Stock Plan. The Stock Plan, as amended, provides for the issuance of a maximum of 6,000,000 shares of common stock for the granting of incentive stock options, nonqualified options, stock grants, and share-based awards. Any remaining shares available for grant, but not yet granted, will be carried over and used in the following fiscal years.

At June 30, 2012, there were 497,633 shares available for grant. During the year ended June 30, 2012, share-based compensation awards were limited to the issuance of 1,013,270 nonqualified stock options and 2,676 restricted stock grants. All option grants have maximum contractual terms ranging from 5 to 10 years. It is the Company’s policy to issue new shares to satisfy the requirements of its share-based compensation plan. The Company does not expect to repurchase shares in the future to support its share-based compensation plan.

A summary of the changes in options outstanding under the Stock Plan for the years ended June 30, 2012, 2011, and 2010 is presented below:

				Weighted-
				Average
			Weighted-	Remaining		Aggregate
	Number of		Average	Contractual		Intrinsic
	Options		Exercise Price	Term in Years		Value
Outstanding as of June 30, 2009	4,315,000	$	5.12
Granted	60,000		11.40
Exercised	(98,558)		6.25
Forfeited and expired	(10,000)		4.00
Outstanding as of June 30, 2010	4,266,442	$	5.18
Outstanding as of June 30, 2010	4,266,442	$	5.18
Granted	7,960		16.23
Exercised	(878,025)		6.28
Forfeited and expired	(6,250)		4.00
Outstanding as of June 30, 2011	3,390,127	$	4.93
Outstanding as of June 30, 2011	3,390,127	$	4.93
Granted	1,013,270		18.58
Exercised	(38,000)		5.12
Forfeited and expired	—		—
Outstanding as of June 30, 2012	4,365,397	$	8.10	2.65	$	29,690
Exercisable as of June 30, 2012	3,537,189	$	5.67	2.29	$	29,673

The weighted average grant date fair value of stock options granted during the years ended June 30, 2012, 2011, and 2010 was $8.97, $7.34, and $4.46, respectively. The total intrinsic value of options exercised during the years ended June 30, 2012, 2011, and 2010, was $417, $7,194, and $459, respectively.

A summary of the Company’s nonvested options as of June 30, 2012, and changes during the year ended June 30, 2012, is presented below:

			Weighted-Average
	Number of		Grant-Date Fair Value
	Options		Per Share
Nonvested as of June 30, 2011	54,251	$	5.04
Granted	1,013,270		8.97
Vested	(239,313)		8.35
Forfeited and expired	—		—
Nonvested as of June 30, 2012	828,208	$	8.93

The total fair value of shares vested during the years ended June 30, 2012, 2011, and 2010, was $1,998, $8,397, and $10,323, respectively. The 1,013,270 incentive stock options granted during the year ended June 30, 2012 consisted of 918,750 options which vest and become exercisable in equal one-sixteenth increments every quarter from the date of grant for four years, 27,600 options which vest and become exercisable in equal one-eighth increments every quarter from the date of grant for two years, 61,136 options which vest and become exercisable on December 31, 2014, and 5,784 options which vested and became exercisable on June 30, 2012.

The Company estimates the fair value of grants using the Black-Scholes option pricing model. The following assumptions were used to estimate the fair value of stock option awards granted during the years ended June 30, 2012, 2011, and 2010:

	2012	2011	2010
Risk-free interest rate	0.30 to 0.64%	0.72%	1.26% to 1.54%
Expected dividend yield	—	—	—
Expected volatility	66.00 to 70.00%	73.20%	69.10 to 75.20%
Expected forfeiture rate	—	—	—
Expected term (years)	3.00 to 4.40%	2.79%	2.50 to 3.43%

57

The risk-free interest rate is based on the yield of zero coupon U.S. Treasury bonds with terms similar to the expected term of the options. The expected dividend yield for grants is zero given the Company’s limited history of dividend issuances and the uncertainty of any future dividend amounts, if any. Since there is limited historical trading data related to the Company’s common stock, the expected volatility over the term of the options is estimated using the historical volatilities of similar companies. The expected forfeiture rate is zero as anticipated forfeitures are estimated to be minimal based on historical data. The expected term is the average of the vesting period and contractual term.

For the years ended June 30, 2012, 2011, and 2010, share-based compensation expense was $2,482 ($1,338 after tax), $4,462 ($2,407 after tax), and $5,712 ($3,082 after tax), respectively. The expense is reported within selling, general, and administrative expenses.

As of June 30, 2012, the Company has unearned compensation expense of $6,986, before income taxes, related to nonvested stock option awards. The unrecognized compensation expense is expected to be recognized over the following periods ending on June 30:

		2013	2014	2015	2016	2017
Share-based compensation (pretax)	$	2,352	2,238	2,156	240	—

b. Executive Bonus Plan

The Company issues restricted stock units under the Company’s Executive Bonus Plan. These restricted stock units proportionally vest over three years, but are not delivered until the end of the third year. The Company will settle these awards by cash transfer, based on the Company’s stock price on the date of transfer. During the year ended June 30, 2012, 452,142 restricted stock units were granted, and as of June 30, 2012, 487,367 restricted stock units were outstanding. For the year ended June 30, 2012, share-based compensation expense for these restricted stock units was $1,089 ($587 after tax). The expense is reported within selling, general, and administrative expenses. The $1,219 liability associated with these restricted stock units is included in other long-term liabilities at June 30, 2012.

(19)      Fair Value Measures

ASC 820, Fair Value Measures and Disclosures, establishes a fair value hierarchy for disclosure of fair value measurements. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to value the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3 — Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. For example, cash flow modeling using inputs based on management’s assumptions.

The Company does not have any assets that are required to be remeasured at fair value at June 30, 2012. The following table summarizes liabilities measured at fair value on a recurring basis at June 30, 2012:

			Total	Level 1	Level 2	Level 3
Foreign exchange forward contracts		$	20	—	20	—
Power hedge			742	—	742	—
Restricted stock units			1,282	1,282	—	—
	Total	$	2,044	1,282	762	—

The Company does not have any assets that are required to be remeasured at fair value at June 30, 2011. The following table summarizes liabilities measured at fair value on a recurring basis at June 30, 2011:

			Total	Level 1	Level 2	Level 3
Interest rate derivatives		$	320	—	320	—
Power hedge			110	—	110	—
Restricted stock units			130	130	—	—
	Total	$	560	130	430	—

Derivative liabilities relate to the interest rate cap and interest rate swap agreements, the foreign exchange forward contracts, and power hedge agreement summarized in note 12 (Derivative Instruments). Fair values are determined by independent brokers using quantitative models based on readily observable market data.

The fair value of restricted stock units is based on quoted market prices of the Company stock at the end of each reporting period.

See note 9 (Debt) for information regarding the fair value of our outstanding debt.

(20)      Related Party Transactions

From time to time, the Company enters into transactions in the normal course of business with related parties. Management believes that such transactions are at arm’s length and for terms that would have been obtained from unaffiliated third parties.

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A current and a former member of the board of directors are affiliated with Marco International and Marco Realty. During the years ended June 30, 2012, 2011, and 2010, the Company:

•  Paid Marco Realty $0, $0, and $166, respectively, to rent office space for its corporate headquarters in New York City, New York.

•  Entered into agreements with Marco International to purchase graphitized carbon electrodes. Purchases under these agreements totaled $18,136, $24,731, and $21,962, respectively. At June 30, 2012 and 2011, payables to Marco International under these agreements totaled $962 and $2,952, respectively.

•  Entered into agreements with Marco International to purchase rare earth. Purchases under these agreements totaled $1,013, $1,001, and $0, respectively. At June 30, 2012 and 2011, payables to Marco International under these agreements totaled $0 and $1,001, respectively.

•  Entered into agreements to sell ferrosilicon to Marco International. Net sales under these agreements totaled $851, $895, and $590, respectively. At June 30, 2012 and 2011, receivables from Marco International under these agreements totaled $137 and $192, respectively.

•  Entered into agreements to sell calcium silicon powder to Marco International. Net sales under these agreements totaled $5,611, $524, and $0, respectively. At June 30, 2012 and 2011, receivables from Marco International under these agreements totaled $1,115 and $0, respectively.

The Company is affiliated with Norchem, Inc. (Norchem) through its 50.0% equity interest. During the years ended June 30, 2012, 2011, and 2010, the Company sold Norchem product valued at $5,923, $5,575, and $4,065, respectively. At June 30, 2012 and 2011, receivables from Norchem totaled $622 and $576, respectively.

Prior to the Company’s purchase of a majority interest in Ningxia Yonvey Coal Industrial Co., Ltd (Yonvey), Yonvey’s predecessor had entered into a lending agreement with the remaining minority stockholder. At June 30, 2012 and 2011, $1,112 and $1,086, respectively, remained payable to Yonvey from this related party.

(21)      Operating Segments

Operating segments are based upon the Company’s management reporting structure and include the following six reportable segments:

• GMI — a manufacturer of silicon metal and silicon-based alloys and a provider of specialty metallurgical coal for the silicon metal and silicon-based alloys industries located in North America.

• Globe Metais — a distributor of silicon metal manufactured in Brazil. This segment includes the historical Brazilian manufacturing operations, comprised of a manufacturing plant in Breu Branco, mining operations, and forest reserves, which were sold on November 5, 2009.

• Globe Metales — a manufacturer of silicon-based alloys located in Argentina.

• Solsil — a manufacturer of upgraded metallurgical grade silicon metal located in the United States.

• Corporate — general corporate expenses, investments, and related investment income.

• Other — operations that do not fit into the above reportable segments and are immaterial for purposes of separate disclosure. The operating segments include Yonvey’s electrode production operations and certain other distribution operations for the sale of silicon metal and silicon-based alloys.

Each of our reportable segments distributes its products in both its country of domicile, as well as to other international customers. The following presents the Company’s consolidated net sales by product line for the years ended:

			2012	2011	2010
Silicon metal		$	360,726	347,599	296,763
Silicon-based alloys			269,919	236,607	148,092
Other			74,899	57,657	27,803
	Total	$	705,544	641,863	472,658

a.  Segment Data

Summarized financial information for our reportable segments as of, and for, the years ended June 30, 2012, 2011, and 2010 are shown in the following tables:

		2012
		Net Sales	Depreciation and Amortization	Operating Income (Loss)	Interest Income	Interest Expense (1)	Income (Loss) Before Income Taxes	Total Assets	Capital Expenditures
GMI	$	631,495	29,261	103,542	1	(5,807)	98,297	679,516	(36,126)
Globe Metais		—	—	(2)	—	—	(2)	—	—
Globe Metales		64,063	1,766	11,332	49	(1,145)	10,422	86,302	(1,926)
Solsil		—	488	(984)	—	—	(984)	30,057	(691)
Corporate		—	424	(27,268)	777	(739)	(25,570)	469,137	(2,675)
Other		28,216	2,061	490	—	(503)	158	41,538	(418)
Eliminations		(18,230)	—	4,315	(584)	584	4,315	(369,803)	—
	$	705,544	34,000	91,425	243	(7,610)	86,636	936,747	(41,836)

59

		2011
		Net Sales	Depreciation and Amortization	Operating Income (Loss)	Interest Income	Interest Expense (1)	Income (Loss) Before Income Taxes	Total Assets	Capital Expenditures
GMI	$	549,418	20,430	103,685	5	1,775	102,240	384,495	31,061
Globe Metais		15,421	—	397	—	—	398	294	—
Globe Metales		62,321	1,634	13,197	—	1,050	12,669	82,751	1,023
Solsil		9,420	488	8,670	—	—	8,670	29,191	165
Corporate		—	426	(29,606)	816	470	(30,086)	403,177	1,226
Other		32,325	2,077	31	1	511	428	43,317	1,564
Eliminations		(27,042)	—	(1,604)	(608)	(608)	(1,605)	(264,956)	—
	$	641,863	25,055	94,770	214	3,198	92,714	678,269	35,039

		2010
		Net Sales	Depreciation and Amortization	Operating Income (Loss)	Interest Income	Interest Expense (1)	Income (Loss) Before Income Taxes	Total Assets	Capital Expenditures
GMI	$	358,279	15,812	41,126	42	2,368	39,107	324,680	18,971
Globe Metais		62,126	776	5,263	178	525	8,579	8,192	208
Globe Metales		48,959	1,820	10,073	—	1,090	10,069	71,790	996
Solsil		20	508	(1,375)	—	30	(1,405)	30,526	(1,410)
Corporate		—	122	2,815	619	317	2,836	415,184	1,273
Other		12,557	1,634	(4,273)	6	569	(5,036)	41,508	2,863
Eliminations		(9,283)	—	657	(527)	(527)	657	(284,735)	—
	$	472,658	20,672	54,286	318	4,372	54,807	607,145	22,901

1 — Net of capitalized interest.

The accounting policies of our operating segments are the same as those disclosed in note 2 (Summary of Significant Accounting Policies). We evaluate segment performance principally based on operating income (loss). Intersegment net sales are not material.

b.  Geographic Data

Net sales are attributed to geographic regions based upon the location of the selling unit. Net sales by geographic region for the years ended June 30, 2012, 2011, and 2010 consist of the following:

			2012	2011	2010
United States		$	625,681	574,181	407,455
Argentina			57,154	54,695	42,101
Brazil			—	—	12,820
Canada			5,520	—	—
China			3,131	899	592
Poland			14,058	12,088	9,690
	Total	$	705,544	641,863	472,658

Long-lived assets by geographical region at June 30, 2012, 2011, and 2010 consist of the following:

			2012	2011	2010
United States		$	330,724	224,556	211,876
Argentina			31,185	31,054	31,665
Canada			100,842	—	—
China			26,288	27,524	27,428
Poland			939	823	800
	Total	$	489,978	283,957	271,769

Long-lived assets consist of property, plant, and equipment, net of accumulated depreciation, depletion and amortization, and goodwill and other intangible assets.

c.  Major Customer Data

The following is a summary of the Company’s major customers and their respective percentages of consolidated net sales for the years ended June 30, 2012, 2011, and 2010:

		2012	2011	2010
Dow Corning		13%	17%	30%
All other customers		87	83	70
	Total	100%	100%	100%

60

The majority of sales to Dow Corning for the years ended June 30, 2012 and 2011 are associated with Dow Corning’s 49% ownership interest in WVA LLC. In addition, the Company maintained a four year arrangement in which Dow Corning was to purchase 30,000 metric tons of silicon metal per calendar year through December 31, 2010. This contract was amended in November 2008 to provide for the sale of an additional 17,000 metric tons of silicon metal to be purchased in calendar year 2009. The contract was further amended in connection with the Dow Corning transactions discussed in note 3 to reduce the amount required to be sold in calendar year 2010 to 20,000 metric tons of silicon metal. In December 2010, the Company agreed to pay $4,276 to Dow Corning to settle certain remaining sales obligations under this contract. The settlement cost was recorded in cost of goods sold in December 2010.

Sales to Dow Corning are included in the GMI segment.

(22)   Business Interruption Insurance Recovery

In November 2011, there was a fire at the Bridgeport, Alabama ferrosilicon plant. The Company recorded and received a business interruption insurance recovery in the amount of $450 as of June 30, 2012.

(23)   Subsequent Events

On August 17, 2012, the Company’s Board of Directors approved an annual dividend of $0.25 per common share, payable quarterly in September 2012, December 2012, March 2013 and June 2013. The Board of Directors authorized a quarterly dividend of $0.0625 per share payable on September 19, 2012 to shareholders of record at the close of business on September 5, 2012.

On August 17, 2012, the Board authorized the Company to offer to amend outstanding options representing the right to purchase shares issued to directors, officers and current employees pursuant to the Company’s 2006 Employee, Director and Consultant Stock Plan, to permit these options alternatively to be settled for cash or exercised for the issuance of shares, at the election of the option holder. The Company anticipates that these amendments will result in “mark-to-market” accounting with respect to the subject options and the expense associated with these amendments is approximately $24,000.

The Company has evaluated subsequent events through the date these financial statements were issued.

(24)   Unaudited Quarterly Results

Unaudited quarterly results for the years ended June 30, 2012 and 2011 were as follows:

		First	Second	Third	Fourth
		Quarter	Quarter	Quarter	Quarter
		(Unaudited)
2012:
Net sales	$	174,862	165,547	173,437	191,698
Operating income		32,465	22,230	19,950	16,780
Net income attributable to Globe Specialty Metals, Inc.		20,693	13,444	11,613	8,820
Basic earnings per common share		0.28	0.18	0.15	0.12
Diluted earnings per common share		0.27	0.18	0.15	0.12
2011:
Net sales	$	137,352	155,775	172,802	175,934
Operating income		8,228	20,229	36,753	29,560
Net income attributable to Globe Specialty Metals, Inc.		2,162	11,708	23,393	15,545
Basic earnings per common share		0.03	0.16	0.31	0.21
Diluted earnings per common share		0.03	0.15	0.30	0.20
2010:
Net sales	$	105,458	108,278	112,486	146,436
Operating income		12,326	30,466	3,307	8,187
Net income attributable to Globe Specialty Metals, Inc.		8,442	18,534	516	6,609
Basic earnings per common share		0.12	0.25	0.01	0.09
Diluted earnings per common share		0.12	0.25	0.01	0.09

61

Exhibit Index

Exhibit
Number		Description of Document
2	.1	Purchase and Sale Agreement dated as of March 26, 2010, by and among Globe Metals Enterprises, Inc., Core Metals Group Holdings LLC and each of the Sellers named therein (6)
2	.2	Membership Interest Purchase Agreement dated May 27, 2011 by and among NGPC Asset Holdings II, LP,NGP Capital Resources Company and Globe BG, LLC relating to Alden Resources Inc. (7)
2	.3	Membership Interest Purchase Agreement dated May 27, 2011 by and among NGPC Asset Holdings II, LP,NGP Capital Resources Company and Globe BG, LLC relating to Gatliff Services, Inc. (7)
2	.4	Purchase Agreement dated May 27, 2011 by and among NGP Capital Resources Company, Globe BG, LLC and Globe Specialty Metals, Inc. regarding The Overriding Royalty Interests (7)
2	.5	Agreement of Purchase and Sale dated as of April 25, 2012 by and among Becancour Silicon Inc., Timminco Ltd., QSI Partners Ltd., and Globe Specialty Metals, Inc. †
		Articles of Incorporation and Bylaws
3	.1	Amended and Restated Certificate of Incorporation (1)
3	.2	Certificate of Amendment to the Amended and Restated Certificate of Incorporation (1)
3	.3	Amended and Restated Bylaws (2)
		Instruments Defining the Rights of Security Holders, Including Indentures
4	.1	Third Amended and Restated Credit Agreement dated as of March 30, 2011, by and among GMI, Tennessee Alloys Company LLC, and GSM Sales, Inc., as borrowers, Alabama Sand and Gravel, Inc. and Laurel Ford Resources, Inc., as subsidiary guarantors, GSM, as Parent, the lender parties thereto, and Societe Generale, as Administrative Agent, Issuing Bank, Swingline Lender and Collateral Agent and SG Americas Securities LLC, as Sole Arranger (3)
4	.2	Term Loan Agreement, dated July 28, 2011, by and among GBG Holdings, LLC, Globe Specialty Metals, Inc., GSM Enterprises LLC, the Lenders from time to time party thereto, and BNP Paribas, as administrative agent, collateral agent, sole lead arranger and sole bookrunner (13)
4	.3	Credit Agreement, dated as of May 31, 2012, among the Company, certain subsidiaries of the Company from time to time party thereto, Fifth Third Bank as Administrative Agent and L/C issuer, Merrill Lynch, Pierce, Fenner & Smith Incorporated as Joint Lead Arranger and Joint Book Runner, Bank of America, N.A., KeyBank National Association, Sovereign Bank, N.A., and  Wells Fargo Bank, N.A., as Co-Syndication Agents, and BBVA Compass Bank,  Citibank, N.A., Citizens Bank Of Pennsylvania, HSBC Bank USA N.A., and PNC Bank, National Association, as  Co-Documentation Agents, and the other lenders party thereto. (5)
		We are a party to other instruments defining the rights of holders of long-term debt. No such instrument authorizes an amount of securities in excess of 10 percent of the total assets of the company and its subsidiaries on a consolidated basis. We agree to furnish a copy of each such instrument to the Commission on request.
		Material Contracts
10	.1	Output and Supply Agreement, dated as of October 1, 2010, by and among Quebec Silicon Limited Partnership, Becancour Silicon Inc. (succeeded in interest by QSIP Canada ULC) and Dow Corning Corporation. †
10	.2	Shareholders Agreement between all the Shareholders of Quebec Silicon General Partner Inc., dated as of October 1, 2010, by and among Becancour Silicon Inc. (succeeded in interest by QSIP Canada ULC), Dow Corning Netherlands, B.V., and Quebec Silicon General Partner Inc. †
10	.3	Amended and Restated Limited Partnership Agreement dated as of October 1, 2010, by and among Becancour Silicon Inc. (succeeded in interest by QSIP Canada ULC), Dow Corning Canada, Inc., and Quebec Silicon General Partner Inc. †
		Management Contracts and Compensatory Plans
10	.6	2006 Employee, Director and Consultant Stock Option Plan (1)
10	.7	Amendments to 2006 Employee, Director and Consultant Stock Option Plan (8)
10	.8	2010 Annual Executive Bonus Plan (9)
10	.9	Chief Financial Officer and Chief Legal Officer Annual Bonus Plan (10)
10	.10	Framework for the 2011 Annual Executive Long Term Incentive Plan (11)
10	.11	Employment Agreement, dated January 27, 2011, between GSM and Alan Kestenbaum (11)
10	.12	Employment Agreement, dated July 5, 2011, between GSM and Jeff Bradley (12)
10	.13	Employment Agreement, dated November 30, 2011, between GSM and Malcolm Appelbaum (4)
10	.14	Employment Agreement, dated June 20, 2008, between GSM and Stephen Lebowitz (1)
10	.15	Amendment to Employment Agreement, dated October 27, 2010, between GSM and Stephen Lebowitz (8)
10	.16	Executive Deferred Compensation Plan (4)
10	.17	Director Deferred Compensation Plan (4)
21	.1	Subsidiaries †
23	.1	Consent of KPMG LLP †
31	.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 †
31	.2	Certification of the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 †
32	.1	Certification of the Principal Executive Officers and Principal Financial Officer Pursuant to 18 U.S.C. 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 †
95		Mine Safety Disclosure †
101		The following materials from our Annual Report on Form 10-K for the fiscal year ended June 30, 2012 formatted in eXtensible Business Reporting Language (“XBRL”): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Changes in Stockholders’ Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) notes to these consolidated financial statements. *

62

_____________________________________________________

†	Filed herewith.
*	In accordance with Rule 406T of Regulation S-T, the XBRL related documents in Exhibit 101 to this Annual Report on Form 10-K are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or Section 12 of the Securities Act of 1933, as amended; are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended; and otherwise are not subject to liability under those Sections.
1	Incorporated by reference to the exhibit with the same designation filed with the Company’s registration statement on Form S-1 (Registration No. 333-152513) filed on July 25, 2008.
2	Incorporated by reference to the exhibit with the same designation filed with Amendment No. 1 to the Company’s registration statement on Form S-1 (Registration No. 333-152513) filed on November 4, 2008.
3	Incorporated by reference to exhibit to the Company’s Form 8-K filed on April 5, 2011.
4	Incorporated by reference to exhibit to the Company’s Form 10-Q filed on February 8, 2012.
5	Incorporated by reference to exhibit to the Company’s Form 8-K filed on June 6, 2012.
6	Incorporated by reference to exhibit to the Company’s Form 8-K filed on April 1, 2010.
7	Incorporated by reference to exhibit to the Company’s Form 8-K filed on June 3, 2011.
8	Incorporated by reference to exhibit to the Company’s Form 10-Q filed on February 11, 2011.
9	Incorporated by reference to exhibit to the Company’s Form 10-K filed on September 28, 2010.
10	Incorporated by reference to exhibit to the Company’s Form 10-Q filed on November 12, 2010.
11	Incorporated by reference to exhibit to the Company’s Form 10-Q filed on May 12, 2011.
12	Incorporated by reference to exhibit to the Company’s Form 10-K filed on August 26, 2011.
13	Incorporated by reference to exhibit to the Company’s Form 8-K filed on August 2, 2011.

63

EX-2.5

EXHIBIT 2.5

AGREEMENT OF PURCHASE AND SALE

This Agreement of Purchase and Sale (this “Agreement”) is made and entered into as of this 25th  day of April, 2012, between BECANCOUR SILICON INC., a corporation subject to the Business Corporations Act (Québec) (“BSI”), TIMMINCO LIMITED, a corporation incorporated under the Canada Business Corporations Act (“Timminco” and together with BSI, the “Vendors”), QSI PARTNERS LTD., a corporation incorporated under the laws of the Cayman Islands (the “Purchaser”) and GLOBE SPECIALTY METALS, INC., a corporation incorporated under the laws of Delaware (the “Guarantor”).

RECITALS:

(A)   Pursuant  to an order of the Ontario Superior Court of Justice (Commercial List) (the “Court”) dated January 3, 2012 (as amended and as may be further amended or restated from time to time, the “Initial Order”), the Vendors are subject to proceedings (the “CCAA Proceedings”) under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended (the “CCAA”);

(B)   On March 1, 2012, the Vendors, the Purchaser, and the Guarantor entered into that certain Agreement of Purchase and Sale, for the purchase and sale of certain of the Vendors’ assets (the “Stalking Horse Agreement”) so as to set a minimum floor price in respect of the Vendors’ sales process;

(C)   Pursuant to an order of the Court dated March 9, 2012 (as amended or restated from time to time, the “Bidding Procedures Order”), the Court, inter alia, approved (i) certain bidding procedures, attached as Schedule “A” thereto, for the solicitation of offers or proposals for the acquisition of the Vendors’ property, assets and undertaking, or some portion thereof (the “Bidding Procedures”) superior to that contemplated under the Stalking Horse Agreement, and (ii) an Expense Reimbursement payable to the Purchaser in accordance with Section 7.2 of the Stalking Horse Agreement; and

(D)   The Vendors desire to sell certain of their assets and the Purchaser has agreed subject to the selection of this Agreement as the Successful Bid in accordance with the Bidding Procedures, to purchase certain assets of the Vendors, subject to the terms and conditions set forth in this Agreement and in accordance with section 36 and other provisions of the CCAA and the Bidding Procedures Order;

NOW THEREFORE,                                           for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Vendors, the Purchaser and the Guarantor agree as follows:

SECTION 1

INTERPRETATION

1.1   Definitions

In this Agreement:

(a)   “Affiliate” has the meaning ascribed to that term under National Instrument 45-106 - Prospectus and Registration Exemptions of the Canadian Securities Administrators;

(b)   “Agreement” has the meaning set out in the recitals hereto;

(c)   “Applicable Law” means, in respect of any Person, property, transaction or event, any domestic or foreign statute, law (including the common law), ordinance, rule, regulation, treaty, restriction, regulatory policy, standard, code or guideline, by-law or order, in each case, having the force of law, that applies in whole or in part to such Person, property, transaction or event;

(d)   “Approval and Vesting Order” means an order by the Court approving this Agreement, authorizing the Transaction and vesting in the Purchaser all the right, title and interest of the Vendors in and to the Purchased Assets free and clear of all Encumbrances, other than Permitted Encumbrances, in form and substance acceptable to the Parties, acting reasonably;

(e)   “Assignment and Assumption Agreement” means an agreement to be entered into between the Purchaser and the Vendors to be effective as of the Closing Time wherein the Vendors shall assign the Contracts to the Purchaser and the Purchaser shall thereafter assume the Assumed Obligations;

(f)   “Assignment Order” means an order or orders of the Court pursuant to Section 11.3 and other applicable provisions of the CCAA, in form and substance satisfactory to the Purchaser, acting reasonably, (i) authorizing and approving the assignment of any Contract for which a Consent and Approval has not been obtained (including the DCC Consent) and preventing any counterparty to the Contract from exercising any right or remedy under the Contract by reason of any defaults arising from the CCAA Proceedings or the insolvency of the Vendors and (ii) where no DCC Consent has been obtained,  the vesting in the Purchaser of all right, title and interest of BSI in and to the QSLP Equity and the QSLP Contracts free and clear of any  rights or remedies of DCC arising under any QSLP Contract in connection with (A) the transfer of the QSLP Equity or such QSLP Contract contemplated hereunder, (B) the Vendors’ insolvency or CCAA Proceedings, or (C) any pre-Closing breach of contract;

(g)   “Assumed Obligations” has the meaning set out in Section 2.4;

(h)   “Auction” has the meaning set out in the Bidding Procedures;

(i)   “Back-Up Bid” has the meaning set out in the Bidding Procedures;

(j)   “Benefit Plans” means all oral or written plans, arrangements, agreements, programs, policies, practices or undertakings of each Vendor with respect to some or all of the Employees and which provide for or relate to:

(i) bonus, profit sharing or deferred profit sharing, performance compensation, deferred or incentive compensation, supplemental retirement arrangements, share compensation, share purchase or share option, share appreciation rights, phantom stock, vacation or vacation pay, sick pay, employee loans, or any other compensation in addition to salary; or

(ii) insured or self-insured benefits for or relating to income continuation or other benefits during absence from work (including short term disability, long term disability and workers compensation), hospitalization, health, welfare, legal costs or expenses, medical or dental treatments or expenses, life insurance, accident, death or survivor’s benefits, supplementary employment insurance, day care, tuition or professional commitments or expenses and perquisites or similar employment benefits;

(k)   “Bidding Procedures” has the meaning set out in the recitals hereto;

(l)   “Bidding Procedures Order” has the meaning set out in the recitals hereto;

(m)   “Books and Records” means all files, documents, instruments, papers, books and records (whether stored or maintained in hard copy, digital or electronic format or otherwise), including tax and accounting books and records, used or intended for use by, and in the possession of, either Vendors, in connection with the ownership, or operation of the Purchased Assets, including the Contracts, customer lists, customer information and account records, sales records, computer files, data processing records, employment and personnel records, sales literature, advertising and marketing data and records, credit records, records relating to suppliers and other data, in each case, relating to the Purchased Assets;

(n)   “BSI Owned Property” means the real property referred to under the heading “Owned Property” in Schedule “B”;

(o)   “BSI Working Capital” means the Silicon Metals Accounts Receivable,  inventory and prepaid expenses of BSI set out in Schedule “L”;

(p)   “Business Day” means a day on which banks are open for business in Toronto, Montreal and New York but does not include a Saturday, Sunday or statutory holiday in the Province of Ontario, or the Province of Québec or the State of New York;

(q)   “C$” and “$” means the lawful currency of Canada;

(r)   “CCAA” has the meaning set out in the recitals hereto;

(s)   “CCAA Proceedings” has the meaning set out in the recitals hereto;

(t)   “Claims” means any claim of any nature or kind (including any cross-claim or counterclaim), demand, investigation, chose in or cause of action, suit, default, assessment, litigation, third party action, arbitral proceeding or proceeding by or before any Person;

(u)   “Closing” means the successful completion of the Transaction;

(v)   “Closing Cash Payment” has the meaning set out in Section 3.2;

(w)   “Closing Cash Purchase Price” has the meaning set out in Section 3.2;

(x)   “Closing Date” means the fifth (5th) Business Day following the date on which the Approval and Vesting Order is granted or such other date as agreed to in writing by the Parties;

(y)   “Closing Date Draft Statement of QSLP Working Capital” has the meaning set out in Section 3.9(a);

(z)   “Closing Date Statement of QSLP Working Capital” has the meaning set out in Sections 3.9(d) and 3.9(e);

(aa)   “Closing Time” means 2:00 p.m. (Toronto time) on the Closing Date;

(bb)   “Collective Agreements” means all collective bargaining or similar agreements with any type of Employee representative applying or relating to any Employee of either of the Vendors, including the Convention Collective de Travail between BSI, QSLP and La Section Locale 184 du Syndicat Canadien des Communications, de l’Énergie et du Papier dated February 28, 2011 relating to BSI’s hourly employees;

(cc)   “Competition Act” means the Competition Act (Canada) as amended, and includes the regulations promulgated thereunder;

(dd)   “Consents and Approvals” means the consents, approvals, notifications or waivers from, and filings with, third parties (including any Governmental Authority) as may be required to complete the Transaction, in form and substance  (including without limitation the quantum of the Consent Costs) satisfactory to the Purchaser, acting reasonably, as set forth in Schedule “K”, and which are effective as of the Closing Time;

(ee)   “Consent Cost” has the meaning set out in Section 1.1(ii), for greater certainty and without limitation, Consent Costs do not include any amounts owing to or incurred by the Monitor or its or the Vendors’ advisors;

(ff)   “Contracts” means all of the contracts and other written agreements to which the Vendors or either one of them are parties constituting part of the Purchased Assets;

(gg)   “Court” has the meaning set forth in the recitals hereto;

(hh)   “Cure Costs” means collectively, (i) the amounts, if any, that are required to be paid under section 11.3 of the CCAA to cure any monetary defaults in connection with the assignment of the Contracts to the Purchaser under section 11.3 of the CCAA; and (ii) such other reasonable costs required to obtain any Consent and Approval (such reasonable costs required to obtain any Consent and Approval, the “Consent Cost”);

(ii)    “DCC” means any one or more of Dow Corning Canada, Inc., DC Global Holdings S.a.r.l. (formerly Dow Corning Netherlands, B.V.), Dow Corning Corporation or their Affiliates as applicable;

(jj)   “DCC Consent” means the consent to the transfer to the Purchaser (or its permitted assigns in accordance with Section 9.11) hereunder of the QSLP Equity and of all of the Contracts to which DCC is a partyhereunder and waiver by DCC of any and all rights it has or will become entitled to under any QSLP Contract due to (i) the transfer of the QSLP Equity hereunder, or (ii) the Vendors’ insolvency or CCAA Proceedings, or (iii) any pre-Closing breach of contracts, such consent and waiver to be in form and substance satisfactory to the Purchaser, acting reasonably;

(kk)    “Deposit” has the meaning set forth in Section 3.3;

(ll)   “DIP Amendment” means the amendment dated March 1, 2012 to the DIP agreement dated January 18, 2012 between the Vendors and the DIP Lender pursuant to which the parties thereto agreed, inter alia, that if either (i) the Closing takes place, or (ii) the Closing does not occur solely as a result of the failure by the Purchaser to perform any of its obligations under the Stalking Horse Agreement or hereunder, then the outstanding DIP Obligations (as defined in the DIP Amendment) owing by the Vendors under the DIP Facility and the obligation of the Monitor to return the remaining balance, if any, of the Maximum Amount (as defined in the DIP Amendment) (and interest earned thereon) to the Purchaser on the Maturity Date (as defined therein) shall be reduced by an aggregate amount equal to the Deposit;

(mm)   “DIP Facility” means the super-priority credit facility provided to the Vendors by the Purchaser pursuant to the DIP agreement dated January 18, 2012 between the Vendors and the DIP Lender (as may be amended), and approved by the DIP Order;

(nn)   “DIP Lender” means QSI Partners Ltd., in its capacity as lender under the DIP Facility;

(oo)   “DIP Lender’s Charge” has the meaning set out in the DIP Order;

(pp)   “DIP Order” means the Order of the Court dated February 8, 2012, authorizing the DIP Facility, as amended from time to time;

(qq)   “Disclosure Letter” means the disclosure letter executed by the Vendors and delivered to the Purchaser prior to the execution of the Stalking Horse Agreement;

(rr)   “Draft Statement of BSI Working Capital” has the meaning set forth in Section 3.6(a);

(ss)   “Employee” means an individual who is, or previously was, employed or retained by either Vendor, whether on a full-time or a part-time basis, whether active or inactive as of the Closing Date, and includes an employee on short term or long term disability leave;

(tt)   “Encumbrances” means any security interest, lien, claim, charge, hypothec, reservation of ownership, pledge, encumbrance, mortgage, adverse claim or right of a third party or encumbrance of any nature or kind whatsoever and any agreement, option or privilege (whether by law, contract or otherwise) capable of becoming any of the foregoing, (including any conditional sale or title retention agreement, or any capital or financing lease);

(uu)   “Estimated BSI Working Capital Statement” means the forecasted working capital balances set forth in Schedule “L”;

(vv)   “Excise Tax Act” means the Excise Tax Act (Canada), as amended;

(ww)   “Excluded Assets” means any and all properties, rights, assets and undertakings of the Vendors that do not constitute the Purchased Assets;

(xx)   “Excluded Equipment” means any equipment or machinery and any parts and components thereof, that are Excluded Assets;

(yy)   “Expense Reimbursement” has the meaning set forth in Section 7.2 of the Stalking Horse Agreement;

(zz)   “Governmental Authority” means any domestic or foreign government, whether federal, provincial, state, territorial, municipal; or supra-national; and any governmental agency, ministry, department, court (including the Court), tribunal, commission, stock exchange, bureau, board or other instrumentality exercising or purporting to exercise legislative, judicial, regulatory or administrative functions of, or pertaining to, government or securities market regulation;

(aaa)   “Guaranteed Obligations” has the meaning set forth in Section 8.1(a);

(bbb)   “HP2 Severance Transaction Documents” means, collectively, (i) a deed of servitude by which QSGP shall establish by destination of proprietor, mutual and reciprocal real servitudes against and in favour of the property located at 6400 Yvon-Trudeau, Bécancour, Quebec (the “HP2 Property”) and the property located at 6500 Yvon-Trudeau, Bécancour, Quebec (the “Facility”), in order to address operational, maintenance, cost sharing, access and other related matters between the Facility and the HP2 Property, including servitudes for illegal views, optical fibres, internet, telephone lines and systems, parking, access to Yvon-Trudeau Street, passage, locker room, security, shared equipment, water, sewer, natural gas, electricity, fire safety systems and equipment, spur lines, shipping and receiving doors and/or compressed air; (ii) a deed of sale between BSI as vendor to QSGP, acting as general partner of QSLP, as purchaser, of dust collector No. 21 located on the HP2 Property and the related duct connecting Furnaces No. 2 located on the Facility; (iii) a deed of sale under which QSGP, the registered owner of the HP2 Property,  shall transfer legal title to the HP2 Property to BSI,  its current beneficial owner; and (iv) following the registration in the land register of the deeds referred to in above paragraphs (i) and (iii), a termination agreement of the nominee agreement concerning the HP2 Property entered into on September 30, 2010 between BSI, as owner, and QSGP, as nominee; in each case, in substantially the form provided by BSI to the Purchaser under cover of letter dated March 1, 2012 or such other form agreed between the Vendors and the Purchaser, acting reasonably;

(ccc)   “IFRS” means the International Financial Reporting Standards, namely the standards, interpretations and the framework for the preparation and presentation of financial statements (in the absence of a standard or an interpretation) adopted by the International Accounting Standards Board(IASB), consistently applied;

(ddd)   “Income Tax Act” means the Income Tax Act (Canada), as amended;

(eee)   “Initial Order” has the meaning set out in the recitals hereto;

(fff)   “Intellectual Property” means, any interest in any and all intellectual and industrial property of any kind in any jurisdiction throughout the world, including: (i) all software, computer programs, layouts, interfaces, templates, applications and tools, and code of all types, including object and source code, and including ephemeral aspects, “look and feel”, graphic design and user interface design (“Software”); (ii) all information and data, databases, database layouts and data structures (whether or not subject to copyright protection) (“Databases”); (iii) all literary, graphical, pictorial, artistic, audio-visual and other works, including webpages and webpage designs, templates, scripts, and similar material, and all compilations of any of the foregoing (collectively, together with Software and Databases, “Works”); (iv) all trade-marks, trade names, service marks, trade dress, logos and other marks and associated goodwill (“Marks”); (v)all domain names, patents, inventions, discoveries, arts, systems, methods, processes, machines, manufactures, developments and improvements (“Inventions”); (vi) all industrial designs; all formulae, confidential information, proprietary information, trade secrets and know how (“Know-How”); and (vii) any other works or other subject-matter that is subject to intellectual or industrial property protection under the laws of any jurisdiction throughout the world; in all cases  of the foregoing whether or not registrable, registered or the subject of applications for registration, including Intellectual Property Rights;

(ggg)   “Intellectual Property Rights” means: (i) any and all statutory, common law or other intellectual and industrial property rights and interests of any kind or nature in and to Intellectual Property, including all copyrights and other rights in and to Works, moral rights and benefits in all waivers of moral rights, patents, patent rights and other rights in and to Inventions, rights to Marks, rights and benefits in and to domain name registrations, industrial design and design patent rights, trade secret rights and other rights in and to Know-How, (ii) all registrations, pending applications for registration, and rights to file applications, and rights of priority, renewal, extensions, divisionals, continuations (in whole or in part) or other derivative applications and registrations, for any of the foregoing; (iii) all licenses or other contractual rights in and to any of the foregoing (including third party software licenses) and all licenses granted in respect of any of the foregoing Intellectual Property, rights and interests; (iv) all future income and proceeds from any of the foregoing Intellectual Property, rights, interests or licenses; and (v) all rights of enforcement and to obtain remedies, including to damages and profits, by reason of past, present or future infringement of any of the foregoing Intellectual Property, rights, interests or licenses;

(hhh)   “Investment Canada Act” means Investment Canada Act, R.S.C. 1985, c. 28 (1st Supp.), as amended;

(iii)   “Litigation Claims” means, collectively, (i) any and all rights of actions or claims whatsoever of either Vendor against third parties arising by reason of any facts or circumstances that occurred or existed before the Closing but excluding any such rights of actions or claims of either Vendor against counterparties to any Contract, and (ii) all amounts owing or received in respect of any such rights of actions or claims;

(jjj)   “Material Adverse Change” means any one or more changes, effects, events or occurrences that, individually or in the aggregate:

(i) is, or would reasonably be expected to be, material and adverse to the business, properties, assets, liabilities (contingent or otherwise), condition (financial or otherwise), capitalization, operations or results of operations of QSLP and the Purchased Assets, taken as a whole; or

(ii) prevents or materially delays  or would reasonably be expected to prevent or materially delay the Vendors from consummating the Transaction;

other than, in the case of clause (a) or (b), any change, effect, event or occurrence (i) in or relating to the CCAA Proceedings, (ii) in or relating to general political, economic or financial conditions in Canada, or (iii) in or relating to the industry involving the mining, processing and sale of silicon, in general, and which in the case of paragraph (i), (ii) and (iii) does not have a materially disproportionate effect on QSLP and the Purchased Assets, taken as a whole;

(kkk)   “Monitor” means FTI Consulting Canada Inc. in its capacity as Monitor of the Vendors in the CCAA Proceedings;

(lll)   “Monitor’s Certificate” means the certificate to be filed with the Court by the Monitor certifying that the Monitor has received written confirmation in form and substance satisfactory to the Monitor from the Parties that all conditions of Closing have been satisfied or waived by the applicable Parties and that the Monitor has received the Closing Cash Purchase Price;

(mmm)   “Ordinary Course of Business” means the ordinary course of business of the Vendors with respect to the Purchased Assets consistent with the conduct of such business on the date hereof and consistent with the Orders of the Court in the CCAA Proceedings;

(nnn)   “Output and Supply Agreement” means the output and supply agreement among QSLP, BSI and DCC dated October 1, 2010, as amended;

(ooo)   “Parties” means, collectively, the Purchaser, the Guarantor and each of the Vendors, and “Party” means any one of them;

(ppp)   “Pension Plans” means any registered or unregistered pension plans of or sponsored by the Vendors, including the following: (i) the Retirement Pension Plan for the Hourly Employees of Timminco Metals, a Division of Timminco, at the Haley Plant (Ontario Registration Number 0589648), (ii) the Régime de Rentes pour les Employés Non Syndiqués de Silicium Bécancour Inc. (Québec Registration Number 26042), (iii) the Régime de Rentes pour les Employés Syndiqués de Silicium Bécancour Inc. (Québec Registration Number 32063) and (iv) the Pension Plan for the Timminco Salaried Employees (Ontario Registration Number 1039312);

(qqq)   “Permitted Encumbrances” means only those Encumbrances related to the Purchased Assets listed on Schedule “E” hereto, which the Purchaser, in connection with the Approval and Vesting Order, shall be entitled to seek to further limit or narrow; provided that, any refusal by the Court to grant the Approval and Vesting Order in respect of any such further limited or narrowed list of Permitted Encumbrances shall not constitute a failure to satisfy the condition in Section 5.3(c) hereof so long as the Court grants the Approval and Vesting Order in respect of the Permitted Encumbrances listed on Schedule “E” hereto;

(rrr)   “Person” means any individual, partnership, limited partnership, limited liability company, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, governmental authority or other entity however designated or constituted;

(sss)   “Post-Filing Costs” means any amounts owing or incurred and not paid under the Contracts arising from and after the commencement of the CCAA Proceedings to but excluding the Closing Date that are permitted to be paid pursuant to the Initial Order;

(ttt)   “Post-Retirement Liabilities” mean: (i) with respect to Employees whose employment is or was governed by a Collective Agreement (including retirees), all liabilities and obligations for the post-retirement benefits provided under the Collective Agreements or under Benefit Plans; and (ii) with respect to non-unionized Employees (including retirees), all liabilities and obligations for the post-retirement benefits provided under the Benefit Plans, as applicable;

(uuu)   “Purchase Price” has the meaning set out in Section 3.1;

(vvv)   “Purchased Assets” means, collectively, the Purchased Silicon Metal Assets, and the BSI Owned Property;

(www)   “Purchased Silicon Metal Assets” means all of BSI’s right, title and interest, in and to those assets and rights set forth in Schedule “A” including the following:  the QSLP Equity, the QSLP Contracts, the Silicon Metal Contracts and the ancillary assets and other property set forth in Schedule “A”;

(xxx)    “QSGP” means Québec Silicon General Partner Inc., a corporation formed under the laws of Québec, and its successors and assigns;

(yyy)   “QSLP” means Québec Silicon Limited Partnership, a limited partnership formed under the laws of Québec, and its successors and assigns;

(zzz)   “QSLPContracts” means the Contracts relating to the formation, transfer of assets into, and governance of, QSLP set forth in Schedule “F”;

(aaaa)   “QSLP Current Assets” means, at any date, all current assets of QSLP, determined on a consolidated basis as of such date in accordance with IFRS (including, for greater certainty, cash, cash equivalents and all other current assets set forth in Schedule “M”), plus the aggregate amount of capital expenditures or other expenditures made from the date of this Agreement to such date on account of loss or damage to assets of QSLP or interruption of business of QSLP but only to the extent such amounts are recoverable under insurance policies of QSLP but not yet received by QSLP, and provided however that any such add back of any such capital expenditures or other expenditures will (i) be subject to providing the Purchaser with evidence satisfactory to it, acting reasonably, that such loss or damage is insured and such amounts will be recovered under such insurance policies and (ii) will not be included if the insurance proceeds are otherwise included as a current asset under IFRS.  For greater certainty, the parties agree that the total of QSLP Current Assets as of end of January 2012 amounted to C$34.649 million as reflected on Schedule “M”;

(bbbb)   “QSLP Current Liabilities” means, at any time, all current liabilities of QSLP, determined on a consolidated basis as of such time in accordance with IFRS (including, for greater certainty, all financial debt (including but not limited to any line of credit from the shareholders of QSLP) and all current liabilities set forth in Schedule "M"). For greater certainty, the parties agree that the total of QSLP Current Liabilities as of end of January 2012 amounted to C$28.373 million as reflected on Schedule "M";

(cccc)   “QSLP Equity” means, collectively, 51,000 units in the capital of QSLP and 51 Class A Shares in the capital of QSGP, in each case, registered in the name of BSI;

(dddd)   “QSLP Mineral Rights” means the Mining Lease BM674 issued by the Ministry of Natural Resources and Wildlife to BSI (then called Électro-métallurgie S.K.W. Canada ltée) on January 13, 1976, as renewed, extended and amended;

(eeee)   “QSLP Real Property” means the real property municipally known as 6500 Yvon-Trudeau Street, Bécancour Québec,, known and designated as being lot number 4 702 498 of the Cadastre of Québec, Registration Division of Nicolet (Nicolet 2);

(ffff)   “QSLP Working Capital” means as at any date the amount of the QSLP Current Assets minus the QSLP Current Liabilities in each case as of such date;

(gggg)   “Representative” means, in respect of a Party, each director, officer, employee, agent, Affiliate, manager, lender, solicitor, accountant, professional advisor, consultant, contractor and other representative of such Party or such Party’s Affiliates;

(hhhh)   “Sales Tax” means all  taxes, interest, penalties and fines imposed under Part IX of the Excise Tax Act and An Act Respecting the Québec Sales Tax (Québec) and the regulations made thereunder and “Sales Tax Legislation” means all such acts and regulations;

(iiii)   “Sample QSLP Working Capital Statement” means the sample QSLP working capital statement set forth in Schedule “M”;

(jjjj)   “Shortfall” means that certain amount of silicon metal to be sold by QSLP to DCC on a monthly basis from January 1, 2011 to December 31, 2012, in order to replace that certain amount of silicon metal that was part of the QSLP production allocation that DCC was entitled to receive but was instead sold to by QSLP to BSI pursuant to Section 2.2(b) of the Output and Supply Agreement;

(kkkk)   “Silicon Metal Accounts Receivable” means all accounts receivable (net of doubtful accounts) owing to BSI in respect of the silicon metals business of BSI except for (i) any tax refunds or credits or (ii) any Litigation Claims;

(llll)   “Silicon Metal Contracts” means the Contracts relating solely to the Purchased Silicon Metal Assets set forth in Schedule “G”;

(mmmm)   “Specific Conveyances” means all conveyances, deeds of transfer, share transfers, bills of sale, assignments and transfers that are reasonably required to transfer the Purchased Assets to the Purchaser in customary form consistent with Section 2.2;

(nnnn)   “Stalking Horse Agreement” has the meaning set out in the recitals hereto;

(oooo)   “Statement of BSI Working Capital” has the meaning set forth in Section 3.6(d) or 3.6(e), as applicable;

(pppp)   “Subsequent DIP Amendment” has the meaning set forth in Section 3.10;

(qqqq)   “Successful Bid” has the meaning set out in the Bidding Procedures;

(rrrr)   “Successful Bidder” has the meaning set out in the Bidding Procedures;

(ssss)   “Termination Date” means July 1, 2012 or, in the event the Agreement is the Back Up Bid, 60 days from the date the Purchaser receives written notice that the Purchaser is the Successful Bidder in accordance with Section 3.3 hereof;

(tttt)   “Transaction” means the transaction of purchase and sale contemplated by this Agreement;

(uuuu)   “Transfer Taxes” means all present and future transfer taxes, sales taxes, use taxes, production taxes, value-added taxes, goods and services taxes, land transfer taxes, registration and recording fees, and any other similar or like taxes and charges imposed by a Governmental Authority in connection with the sale, transfer or registration of the transfer of the Purchased Assets, including Sales Tax but excluding any taxes imposed or payable under the Income Tax Act and any other applicable income tax legislation; and

(vvvv)   “Vendors” has the meaning set out in the recitals hereto.

1.2   Interpretation Not Affected by Headings, etc.

The division of this Agreement into sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “herein” and “hereunder” and similar expressions refer to this Agreement and not to any particular section hereof. The expression “Section” or reference to another subdivision followed by a number mean and refer to the specified Section or other subdivision of this Agreement.

1.3   Extended Meanings

Words importing the singular include the plural and vice versa and words importing gender include all genders. The term “including” means “including, without limitation,” and such terms as “includes” have similar meanings.

1.4   Schedules

The following Schedules are incorporated in and form part of this Agreement:

Schedule “A”                                           –           Purchased Silicon Metal Assets

Schedule “B”                                           –           BSI Owned Property

Schedule “C”                                           –           Intentionally Deleted

Schedule “D”                                           –           Bidding Procedures Order

Schedule “E”                                           –           Permitted Encumbrances

Schedule “F”                                           –           QSLP Contracts

Schedule “G”                                           -           Silicon Metal Contracts

Schedule “H”                                           –           Intentionally Deleted

Schedule “I”                                           --           Monthly Reimbursement

Schedule “J”                                           -           Intentionally Deleted

Schedule “K”                                           –           Consents and Approvals

Schedule “L”                                           –           Estimated BSI Working Capital Statement

Schedule “M”                                                      Sample QSLP Working Capital Statement

Schedule “N”                                                      Access Agreement Term Sheet

SECTION 2

SALE AND PURCHASE AND ASSIGNMENT

2.1   Sale and Purchase of Assets

Subject to the terms and conditions hereof, at the Closing Time, the Vendors hereby agree to sell, assign and transfer to the Purchaser and the Purchaser hereby agrees to purchase from the Vendors, all of the Vendors’ right, title and interest in and to the Purchased Assets free and clear of all Encumbrances other than Permitted Encumbrances.  

2.2   Assignment of Purchased Assets

Subject to the conditions and terms hereof, at the Closing Time, the Vendors shall assign to the Purchaser all of the Vendors’ rights, benefits and interests in and to the Contracts and the Purchaser shall assume the obligations and liabilities of the Vendors under the Contracts at the Closing Time (including Cure Costs but excluding Post-Filing Costs).  Notwithstanding the foregoing, this Agreement and any document delivered under this Agreement shall not constitute an assignment or an attempted assignment of any Purchased Asset contemplated to be assigned to the Purchaser under this Agreement that is not assignable without the Consent and Approval of a third party unless (i) such Consent and Approval has been obtained or (ii) the assignment has been ordered by the Court.

Prior to the application for the Approval and Vesting Order, the Vendors shall use their commercially reasonable efforts to obtain any Consent and Approval necessary for the assignment of any Contract to the Purchaser, including the DCC Consent. The Purchaser shall provide its reasonable cooperation to assist the Vendors in obtaining any such Consents and Approvals.

To the extent any Consent and Approval, including the DCC Consent, necessary for the assignment of any Contract to the Purchaser is not obtained prior to the application for the Approval and Vesting Order, the Vendors shall bring an application to the Court for approval of the Assignment Order.

2.3   “As is, Where is”

The Purchaser acknowledges that the Vendors are selling the Purchased Assets on an “as is, where is” basis as they shall exist at the Closing Time. Except as otherwise provided in Section 4.2(c) and 4.2(d), the Purchaser further acknowledges that it has entered into this Agreement on the basis that the Vendors do not guarantee title to the Purchased Assets. No representation, warranty or condition is expressed or can be implied as to title, encumbrances, description, fitness for purpose, merchantability, condition, quantity or quality or in respect of any other matter or thing whatsoever concerning the Purchased Assets or the right of the Vendors to sell or assign same save and except as expressly represented or warranted herein.  Without limiting the generality of the foregoing, any and all conditions, warranties or representations expressed or implied pursuant to the Sale of Goods Act (Ontario), as amended, the Civil Code of Québec or similar legislation do not apply hereto and have been waived by the Purchaser.  The description of the Purchased Assets contained in the Schedules is for purpose of identification only.  Except as otherwise provided in Section 4.2, no representation, warranty or condition has or will be given by the Vendors concerning completeness or accuracy of such descriptions.

2.4   Assumed Obligations

The Purchaser shall assume and perform, discharge and pay when due the debts, liabilities and obligations under the Contracts (to the extent assigned or transferred to the Purchaser on Closing) for the period from and after the Closing Time and all Cure Costs (other than Post-Filing Costs) of the Vendors (the "Assumed Obligations") after the Closing.  Notwithstanding anything to the contrary contained herein, in no event shall the Purchaser's obligations to pay Cure Costs hereunder exceed a maximum aggregate amount of C$10,000,000.

2.5   Excluded Obligations

Other than the Assumed Obligations, and all the obligations to be assumed pursuant to Sections 3.5 and 6.11 the Purchaser shall not assume and shall not be liable, directly or indirectly, or otherwise responsible for any debts, liabilities or other obligations of the Vendors (to any Person, including without limitation QSLP), including, without limiting the generality of the foregoing:

(a)   all debts, liabilities, obligations or Claims related to any Benefit Plans, Collective Agreements, Employees, Pension Plans, Post-Retirement Liabilities or any Excluded Asset;

(b)   all debts, liabilities and obligations related to any Purchased Asset (including Contracts but excluding Cure Costs) arising out of or related to the period prior to the Closing Time;

(c)   all obligations and liabilities owing by either Vendor to the other Vendor or any Affiliate thereof (for greater certainty other than Cure Costs excluding Post-Filing Costs);

(d)   all debts, liabilities and obligations for or related to any obligation for any taxes that are not expressly assumed by the Purchaser pursuant to Sections 2.4 and 3.5;

(e)   all taxes imposed on or relating to the Purchased Assets that are attributable to any pre-Closing tax period whether or not any such period ends on or before the Closing Date (other than any Transfer Taxes);

(f)   all debts, liabilities and obligations of the Vendors arising under this Agreement; and

(g)   any debts, liabilities, obligations or Claims (other than Claims under any QSLP Contracts) by any person, including without limitation QSLP, against the Vendors relating to amounts payable to, or in respect of, BSI's hourly retirees under the Collective Agreements or under the Benefit Plans.

SECTION 3

PURCHASE PRICE

3.1   Purchase Price

The aggregate purchase price (the “Purchase Price”) payable by the Purchaser to the Vendors for the Purchased Assets is: (i) the sum of C$31,875,000 payable in cash and (ii) the assumption by the Purchaser of the Assumed Obligations subject to the adjustment, if any, in accordance with Section 3.7.

3.2   Satisfaction of Purchase Price

Provided that all conditions of Closing have been satisfied or waived in accordance with Section 5, the Purchase Price shall be paid and satisfied on Closing as follows:

(a)   the crediting and set off of the Deposit against outstanding amounts owing to the DIP Lender under the DIP Facility pursuant to the DIP Amendment and, if applicable, the  Subsequent DIP Amendment;

(b)   the application of all outstanding amounts owing to the DIP Lender under the DIP Facility (including any accrued interest thereon and any expenses and other amounts owing thereunder) in excess of the Deposit to the Purchase Price;

(c)   the balance of the cash portion of the Purchase Price (the “Closing Cash Payment” and together with the Deposit and the amount referred to in clause (b) above, the “Closing Cash Purchase Price”) shall be paid on the Closing Date by wire transfer in immediately available funds payable to the Monitor pending further Order of the Court;

(d)   the assumption by the Purchaser of the Assumed Obligations.

Any adjustment required to be made to the Purchase Price in accordance with Section 3.7 shall be satisfied by the payment of the appropriate amount by the Party owing such payment to the other Party entitled thereto in the manner and at the time contemplated therein.

3.3   Deposit

Effective upon the execution of this Agreement by all of the Parties, the Purchaser shall provide to the Monitor, for and on behalf of the Vendors,  a deposit (the “Deposit”) of 15% of the Closing Cash Purchase Price (excluding any adjustment contemplated under Section 3.7 less the amount of the Deposit provided in accordance with section 3.3 of the Stalking Horse Agreement (which amount for greater certainty shall form part of the Deposit hereunder), pursuant to the credit and set off arrangement contemplated under the DIP Amendment.  If the Closing takes place, the Deposit shall be credited and set off against the outstanding amounts owing to the DIP Lender under the DIP Facility pursuant to the DIP Amendment.  The Deposit shall be credited and set off against outstanding amounts owing to the DIP Lender under the DIP Facility pursuant to the DIP Amendment in the event that Closing does not occur solely as a result of the failure by the Purchaser to perform any of its obligations hereunder.  For greater certainty, the Parties agree that the DIP Amendment shall apply to this Agreement.  Notwithstanding any provision herein, there will be no credit or set off of the amount of the Deposit to outstanding amounts owing to the DIP Lender under the DIP Facility on the Business Day following the occurrence of the earliest of any of the following (and the Vendors shall acknowledge the same in writing to the Purchaser):

(a)   if this Agreement is not the Successful Bid or the Back-Up Bid (as determined at the closing of the Auction pursuant to section 9(e) of the Bidding Procedures);

(b)   if this Agreement is the Back-Up Bid and the transaction contemplated by the Successful Bid of another purchaser is closed; or

(c)   if the Transaction is not completed by the Termination Date and either the Vendors or the Purchaser have terminated the Transaction thereafter for any other reason other than solely as a result of the failure of the Purchaser to perform any of its obligations hereunder.

If the Successful Bid does not close and this Agreement is the Back-Up Bid, the Vendors shall immediately provide written notice to the Purchaser of this fact pursuant to the Bidding Procedures.  Upon receipt by the Purchaser of such notice at least 5 Business Days prior to the Termination Date, the Purchaser shall be required to close the Transaction on the same terms set out herein or in the Purchaser’s revised bid, as applicable, by no later than the Termination Date and the Deposit shall be credited and set off as provided in Section 3.2.

3.4   Allocation of Purchase Price

The Purchase Price shall be  allocated among the Purchased Assets by the Purchaser, acting reasonably, two Business Days prior to the Closing, a copy of which will be provided to the Vendors at such time.  The Vendors and the Purchaser agree that the allocation of the Purchase Price for tax purposes among each of the classes of Purchased Assets of each of the Vendors shall be determined and agreed upon on a date no later than five (5) Business Days before the Closing Date. Each of the Vendors and the Purchaser shall report the sale and purchase of the Purchased Assets for all tax purposes in a manner consistent with such allocation, and will complete all tax returns, designations and elections in a manner consistent with such allocation and otherwise follow such allocation for all tax purposes on and subsequent to the Closing Date and may not take any position inconsistent with such allocation.

3.5   Transfer and Other Taxes

The Parties agree that:

(a)   the Purchase Price is exclusive of all Transfer Taxes and the Purchaser shall be liable for and shall pay any and all applicable Transfer Taxes pertaining to the Purchaser’s acquisition of the Purchased Assets or the registration of any Specific Conveyance necessitated hereby (including for greater certainty all debts, liabilities and obligations of the Vendors for Transfer Taxes payable in connection with the Transaction);

(b)   the Purchaser shall indemnify the Vendors for any Transfer Taxes (including any interest or penalties imposed by a Governmental Authority) for which the Vendors may become liable as a result of any failure by the Purchaser to pay or remit such Transfer Taxes;

(c)   if applicable, they shall jointly elect that no Sales Tax be payable pursuant to the Sales Tax Legislation with respect to the purchase and sale of the Purchased Assets under this Agreement and the Purchaser will file an election pursuant to section 167 of the Excise Tax Act and s. 75 of An Act Respecting the Québec Sales Tax (Québec), prepared by the Purchaser and made jointly by the Purchaser and each Vendor, in compliance with the requirements of the Sales Tax Legislation; and

(d)   the Purchaser shall perform, discharge and pay when due all debts, liabilities and obligations for realty taxes in respect of the Purchased Assets attributable to the period from and after the Closing Date.

3.6   Preparation of BSI Working Capital Statement

(a)   Within 20 Business Days following the Closing Date (or such other date as is mutually agreed to by the Vendors and the Purchaser in writing), the Purchaser will prepare and deliver to the Vendors and the Monitor a draft statement of BSI Working Capital (the “Draft Statement of BSI Working Capital”) prepared as of the Closing Date.  The Draft Statement of BSI Working Capital will be prepared in accordance with IFRS consistent with the Estimated BSI Working Capital Statement referred to in Schedule “L”, provided that it is consistent with IFRS.

(b)   The Vendors will have 10 Business Days to review the Draft Statement of BSI Working Capital following receipt of it and the Vendors must notify the Purchaser in writing if they have any objections to the Draft Statement of BSI Working Capital within such 10 Business Day period.  The notice of objection must contain a statement of the basis of the Vendors’ objections.

(c)   If the Vendors send a notice of objection of the Draft Statement of BSI Working Capital in accordance with Section 3.6(b), the Parties will work expeditiously and in good faith in an attempt to resolve such objections following the date of notification by the Vendors to the Purchaser of such objections.  Failing resolution of any objection to the Draft Statement of BSI Working Capital raised by the Vendors, within 90 days following the date of notification by the Vendors to the Purchaser of such objections, the Vendors or the Purchaser may bring a motion before the Court for a determination of such objections with respect to the Draft Statement of BSI Working Capital.

(d)   If the Vendors do not notify the Purchaser of any objection in accordance with Section 3.6(b), the Parties are deemed to have accepted and approved the Draft Statement of BSI Working Capital and such Draft Statement of BSI Working Capital will be final, conclusive and binding upon the Parties, and will not be subject to appeal, absent manifest error.  The Draft Statement of BSI Working Capital will become the “Statement of BSI Working Capital” on the next Business Day following the end of such 5 Business Day period.

(e)   If the Vendors send a notice of objection within the 5 Business Day period, the Parties will revise the Draft Statement of BSI Working Capital to reflect the final resolution amongst the Vendors and the Purchaser or final determination by the Court of such objections under Section 3.6(c) within two Business Days following such final resolution amongst the Vendors and the Purchaser or determination by the Court, as applicable.  Such revised Draft Statement of BSI Working Capital will be final, conclusive and binding upon the Parties, and will not be subject to appeal, absent manifest error.  The Draft Statement of BSI Working Capital will become the “Statement of BSI Working Capital” on the next Business Day following revision of the Draft Statement of BSI Working Capital under this Section 3.6(e).

(f)   The Purchaser and the Vendors will each bear their own fees and expenses, in preparing or reviewing, as the case may be, the Draft Statement of BSI Working Capital.

3.7   BSI Working Capital Purchase Price Adjustment

(a)   Subject to Section 3.7(c), the Purchase Price will be increased or decreased, as the case may be, dollar-for-dollar, to the extent that the  BSI Working Capital, as determined from the Statement of BSI Working Capital, is more or less than C$4,509,000.

(b)   Subject to Section 3.7(c), if the BSI Working Capital, as determined from the Statement of BSI Working Capital, is more than C$4,509,000, the Purchaser will pay to the Vendor the amount of such difference as an increase to the Purchase Price.  If the BSI Working Capital as determined from the Statement of BSI Working Capital is less than C$4,509,000, the Vendors shall pay to the Purchaser the amount of the difference.  Any amounts to be paid by the Purchaser to the Vendors, or by the Vendors to the Purchaser, under this Section will be paid within 2 Business Days after the Draft Statement of BSI Working Capital becomes the Statement of BSI Working Capital in accordance with Section 3.6(d) or Section 3.6(e), as the case may be.

(c)   If the adjustment arising from BSI Working Capital, as determined from the Statement of BSI Working Capital, would increase or decrease the Purchase Price by an amount of less than C$150,000, then there shall be no adjustment to the Purchase Price; provided, however that any such adjustment of C$150,000 or more shall increase or decrease the Purchase Price, dollar for dollar, for the entire amount of the adjustment.

3.8   Sufficiency of Funds

The Vendors will not distribute an amount of the Purchase Price equal to C$4,509,000 (or, after preparation of the Draft Statement of BSI Working Capital, such lesser amount equal to the difference between C$4,509,000 and the BSI Working Capital amount shown on the Draft Statement of BSI Working Capital) until the Statement of BSI Working Capital is determined in accordance with Section 3.6.

3.9   Preparation of QSLP Working Capital Statement

(a)    Ten Business Days prior to the expected Closing Date (or such other date as is mutually agreed to by the Vendors and the Purchaser in writing), the Vendors will prepare in good faith and deliver to the Purchaser and the Monitor a draft statement of QSLP Working Capital (the “Closing Date Draft Statement of QSLP Working Capital”) as of the Closing Date (or such other date as mutually agreed by the Vendors and Purchaser in writing). The Closing Date Draft Statement of QSLP Working Capital will be prepared in accordance with IFRS and the Sample QSLP Working Capital Statement.  For the avoidance of doubt, in the Sample QSLP Working Capital Statement, a provision against certain accounts receivable from BSI amounting to approximately C$9,700,000 has been booked and considered as of January 2012 as set forth in Schedule "M".  Such provisions in at least the same amount shall also be booked and considered when calculating the QSLP Current Assets as of the Closing Date notwithstanding a potential assumption by the Purchaser hereunder of the underlying obligation to make the respective payment to QSLP.

(b)   The Purchaser will have 5 Business Days to review the Closing Date Draft Statement of QSLP Working Capital following receipt of it and the Purchaser must notify the Vendors in writing if they have any objections to the Closing Date Draft Statement of QSLP Working Capital within such 2 Business Day period. The notice of objection must contain a statement of the basis of the Purchaser’s objections.

(c)   If the Purchaser sends a notice of objection of the Closing Date Draft Statement of QSLP Working Capital in accordance with Section 3.9(b), the Vendors or the Purchaser may bring a motion before the Court for a determination of such objections with respect to the Closing Date Draft Statement of QSLP Working Capital.

(d)   If the Purchaser does not notify the Vendors of any objection in accordance with Section 3.9(b), the Parties are deemed to have accepted and approved the Closing Date Draft Statement of QSLP Working Capital and such Closing Date Draft Statement of QSLP Working Capital will be final, conclusive and binding upon the Parties, and will not be subject to appeal, absent manifest error. The Closing Date Draft Statement of QSLP Working Capital will become the “Closing Date Statement of QSLP Working Capital” on the next Business Day following the end of such 2 Business Day period.

(e)   If the Purchaser sends a notice of objection within the 2 Business Day period, the Parties will revise the Closing Date Draft Statement of QSLP Working Capital to reflect the final resolution amongst the Vendors and the Purchaser or final determination by the Court of such objections under Section 3.9(c) within two Business Days following such final resolution amongst the Vendors and the Purchaser or determination by the Court, as applicable.  Such revised Closing Date Draft Statement of QSLP Working Capital will be final, conclusive and binding upon the Parties, and will not be subject to appeal, absent manifest error. The Draft Statement of QSLP Working Capital will become the “Closing Date Statement of QSLP Working Capital” on the next Business Day following revision of the Closing Date Draft Statement of QSLP Working Capital under this Section 3.9(e).

(f)   The Purchaser and the Vendors will each bear their own fees and expenses, in preparing or reviewing, as the case may be, the Draft Statement of QSLP Working Capital.

(g)   The Vendors will provide the Purchaser full access to its Books and Records and other such information reasonably necessary for it to evaluate the Closing Date Draft Statement of QSLP Working Capital.

3.10   Extension and Increase of DIP Facility

Provided that Closing is not delayed due to the failure of the Vendors to fulfill the conditions under sections 5.1 and 5.3 or any breach of the representations and warranties of the Vendors in section 4.2, the DIP Facility shall be amended as follows (the “Subsequent DIP Amendment”):

(a) If the Purchaser is the Successful Bidder,  in the event Closing has not occurred by June 8, 2012, by increasing the amount of the DIP Facility by up to a maximum amount of $2.5 million;

provided that in (a) above, the Vendors shall repay to the Purchaser any amounts owing pursuant to any Subsequent DIP Amendment by (i) crediting of such amount against the Purchase Price as set forth in section 3.2(a) hereof on or before Closing, or (ii) if this Agreement is terminated for any reason, by payment into an account designated by the Purchaser, within two (2) Business Days of such termination.

SECTION 4

REPRESENTATIONS AND WARRANTIES

4.1   Purchaser’s Representations

The Purchaser represents and warrants to the Vendors as of the date hereof and as of the Closing Time that and acknowledges that the Vendors are relying on such representations and warranties in connection with entering into this Agreement and performing their obligations hereunder:

(a)   the Purchaser is a corporation duly incorporated, organized and subsisting under the laws of the Cayman Islands and has the requisite power and authority to enter into this Agreement and to complete the transactions contemplated hereunder;

(b)   the Purchaser has taken all necessary corporate action to authorize the entering into and performance by it of this Agreement and completion of the transactions contemplated herein will not breach its constating documents, any agreement binding upon the Purchaser or any Applicable Laws with respect to the Purchaser;

(c)   other than the Bidding Procedures Order, the Approval and Vesting Order, the Assignment Order (if applicable) and any Specific Conveyances, execution, delivery and performance of this Agreement by the Purchaser does not and will not require any consent, approval, authorization or other order of, action by, filing with or notification to, any Governmental Authority;

(d)   this Agreement and all other documents contemplated hereunder to which the Purchaser is or will be a party have been or will be, as at the Closing Time, duly and validly executed and delivered by the Purchaser and constitute or will, as at the Closing Time, constitute legal, valid and binding obligations of the Purchaser enforceable in accordance with the terms hereof or thereof;

(e)   except in connection with the CCAA Proceedings, there are no proceedings before or pending before any Governmental Authority, or threatened to be brought by or before any Governmental Authority by or against the Purchaser affecting the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby by the Purchaser;

(f)   the Purchaser is not subject to any order of any Governmental Authority, nor are there any such orders threatened to be imposed by any Governmental Authority, which could affect the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby by the Purchaser;

(g)   the Purchaser has or will have made adequate arrangements to have sufficient funds available to satisfy its obligations to pay the Purchase Price as set forth in Section 3.2;

(h)   the Purchaser is controlled by a WTO Investor, within the meaning of the Investment Canada Act; and

(i)   the Purchaser and its affiliates do not have assets in Canada that exceed $100 million or gross revenues from sales in, from or into Canada that exceed $100 million, all as determined in accordance with Part IX of the Competition Act and the Notifiable Transactions Regulations thereunder.

4.2   Vendors’ Representations

The Vendors, jointly and severally, represent and warrant to the Purchaser as of the date hereof and as of the Closing Time as follows and acknowledge that the Purchaser is relying on such representations and warranties in connection with entering into this Agreement and performing its obligations hereunder:

(a)   Timminco is a corporation duly incorporated, organized and subsisting under the Canada Business Corporations Act;

(b)   BSI is a corporation duly organized and subject to and subsisting under the Business Corporations Act (Québec);

(c)   except as disclosed in the Disclosure Letter, BSI has good and marketable title to the QSLP Equity, free and clear of Encumbrances other than the Permitted Encumbrances.   The total issued and outstanding securities of QSLP consist of 100,010 units.  The total issued and outstanding capital of QSGP consists of 51 Class A Shares and 49 Class B Shares.  Except as set forth in the QSLP Contracts, there are no existing rights or privileges to acquire any unissued securities of QSLP or QSGP or any of such outstanding securities held by BSI or QSGP;

(d)   except as disclosed in the Disclosure Letter and as of the file currency date specified therein, BSI is the sole and unconditional legal and beneficial owner of and has good and marketable title to the BSI Owned Property and is the sole and unconditional beneficial and legal owner of and has good and marketable title to the other material Purchased Assets, excluding Contracts and Intellectual Property, free and clear of Encumbrances other than Permitted Encumbrances;

(e)   except as disclosed in the Disclosure Letter and as of the file currency date specified therein, (i) QSLP has good and marketable title to all of the material personal property purported to be owned by QSLP and the QSLP Real Property and has a valid leasehold interest in the QSLP Mineral Rights; (ii) the QSLP Mineral Rights are in good standing and in full force and effect; and (iii) the QSLP Mineral Rights and product derived from the QSLP Mineral Rights are not subject to or bound by any royalty, royalty interest or similar payment or interest or other Encumbrances;

(f)   except as would not result in a Material Adverse Change and except as disclosed in the Disclosure Letter, to the best of the Vendors’ and their management’s knowledge: (i) the use of the BSI Owned Property by BSI is in compliance with and not subject to any liability under Applicable Laws related to environmental protection, restoration and rehabilitation, occupational health and safety or natural resources matters and (ii) QSLP’s operations are in compliance with and not subject to any liability under Applicable Laws related to environmental protection, restoration and rehabilitation, natural resource or occupational health and safety matters;

(g)   except as disclosed in the Disclosure Letter, the Vendors have not licensed their rights in any Intellectual Property held by the Vendors, to any Person.  The Vendors have not received from any Person any notice (written or oral) that any of the Vendor’s registered Intellectual Property is invalid or defective, or the use of such registered Intellectual Property is or would be infringing, misappropriating or violating in any way any Intellectual Property of such Person;

(h)   the Vendors and their management are unaware of any pending challenge to the validity of Silicon Metal Contracts or the transactions contemplated thereunder and has not received any written notice threatening any such challenge;

(i)   the aggregate amount of the Shortfall at its highest was 5,440 metric tons. As at January 30, 2012, QSLP had produced and delivered to DCC no less than 2,500 metric tons of silicon metal at BSI’s request in satisfaction of BSI’s obligation to DCC in respect of the Shortfall;

(j)   excluding the CCAA Proceedings, the Vendors are not subject to any order of any Governmental Authority, nor are there any such orders threatened to be imposed by any Governmental Authority, which could affect the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby by the Vendors;

(k)   subject to obtaining the Approval and Vesting Order, the Vendors have the requisite power and authority to enter into this Agreement and to complete the transactions contemplated hereunder;

(l)   subject to obtaining  the Approval and Vesting Order, each of the Vendors has taken all necessary corporate action to authorize the entering into and performance by it of this Agreement and the entering into of this Agreement and completion of the transactions contemplated herein will not breach its constating documents;

(m)   other than the CCAA Proceedings, there are no proceedings before or pending before any Governmental Authority, or threatened to be brought by or before any Governmental Authority by or against the Vendors or affecting any of the Purchased Assets, the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby by the Vendors;

(n)   subject to obtaining  the Approval and Vesting Order, this Agreement and all other documents contemplated hereunder to which the Vendors are or will be a party have been or will be, as at the Closing Time, duly and validly executed and delivered by each of the Vendors and constitute or will, as at the Closing Time, constitute legal, valid and binding obligations of each of the Vendors enforceable in accordance with the terms hereof or thereof;

(o)   neither Vendor is a non-resident of Canada for purposes of section 116 of the Income Tax Act;

(p)   the aggregate book value of the Purchased Assets does not exceed $330 million, as calculated in accordance with the Investment Canada Act and the regulations thereto;

(q)   the Vendors and their affiliates do not have assets in Canada that exceed $300 million or gross revenues from sales in, from or into Canada that exceed $300 million, all as determined in accordance with Part IX of the Competition Act and the Notifiable Transactions Regulations thereunder;

(r)   each of the Vendors is a registrant for the purposes of tax imposed under (A) An Act Respecting the Québec Sales Tax (Québec) with the following registration numbers for Timminco and BSI, respectively,  1000873612 and 100829788, and (B) Part IX of the Excise Tax Act with the following registration numbers for Timminco and BSI, respectively, 105289094 RT0002 and 104881412 RT0001;

(s)   each of QSLP and QSGP has paid all  taxes which are due and payable by it to all applicable Governmental Authorities and has remitted all  amounts that it withheld or collected on account of amounts that it was required by Applicable Law to have withheld or collected, including for all Canada Pension Plan contributions, provincial pension plan contributions, employment insurance premiums, employer health taxes, Sales Tax and any other material taxes to the appropriate Governmental Authority within the time required under Applicable Law;

(t)   no finder, broker or similar intermediary acting on behalf of the Vendors or any of their Affiliates is entitled to a commission, fee or other compensation from the Purchaser in connection with the negotiation, execution or delivery of this Agreement or the consummation of the Transaction; and

(u)   to the Vendors’ knowledge, information and belief, after due inquiry, there are no pre-Closing breaches of contract under the QSLP Contracts listed in items 5 and 6 of Schedule F hereto.

4.3   Limitations

With the exception of the Vendors’ representations and warranties in Section 4.2 and the Purchaser’s representations and warranties in Section 4.1, neither the Vendors nor the Purchaser, nor their respective Representatives, nor any of their respective officers, directors or employees make, have made or shall be deemed to have made any other representation or warranty, express or implied, at law or in equity, in respect of the Vendors, the Purchaser, or the Purchased Assets or the sale and purchase of the Purchased Assets pursuant to this Agreement.

SECTION 5

CONDITIONS

5.1   Conditions - Purchaser

The obligation of the Purchaser to complete the Transaction is subject to the following conditions being fulfilled or performed:

(a)   all representations and warranties of the Vendors contained in this Agreement shall be true in all material respects as of the Closing Time with the same effect as though made on and as of that date;

(b)   the Vendors shall have performed in all material respects each of their obligations under this Agreement to the extent required to be performed at or before the Closing Time;

(c)   all stays of proceedings contained in the Initial Order shall have remained in effect as at the Closing Time except where any such stay is terminated or lifted or amended in a manner which is not prejudicial to the Purchaser or which does not adversely affect the Purchaser’s rights under this Agreement or the Purchased Assets and the exercise of rights contained in the Initial Order has not been amended or modified in any manner prejudicial to the Purchaser as at the Closing Time;

(d)   each Consent and Approval including the DCC Consent, shall have been obtained as at the Closing Time or, in the absence of any such Consent and Approval, the Court shall have approved the Assignment Order in respect of such Consent and Approval and it shall not have been stayed, varied, vacated or appealed (or any such appeal shall have been dismissed with no further appeal therefrom) as at the Closing Time;

(e)   after the date of this Agreement and before the Closing Time, there shall not have occurred any Material Adverse Change;

(f)   the Closing Date  Statement of QSLP Working Capital shall have been determined in accordance with Section 3.9(d) or Section 3.9(e) and the QSLP Working Capital shown on the Closing Date  Statement by QSLP Working Capital shall not be less than $7,500,000;

(g)   BSI shall have delivered to the Purchaser evidence, that the minimum aggregate amount of silicon metal that QSLP shall have produced and delivered to DCC at BSI’s request in satisfaction of BSI’s obligation to DCC in respect of the Shortfall shall be no less than the amount set forth in Schedule “I”;

(h)   the Vendors shall deliver a certificate, to the Purchaser certifying that all Post-Filing Costs and taxes payable in respect of the transactions contemplated under the HP2 Severance Transaction Documents in accordance with the valuation specified therein, that are due, have been paid or provided for, and for those incurred but not yet due, provided for.

The foregoing conditions are for the exclusive benefit of the Purchaser. Any condition in this Section 5.1 may be waived by the Purchaser in whole or in part, without prejudice to any of its rights of termination in the event of non-fulfillment of any other condition in whole or in part. Any such waiver shall be binding on the Purchaser only if made in writing.  If any condition set out in Section 5.1  is not satisfied or performed on or prior to the date specified therefor, the Purchaser may elect on written notice to the Vendors to terminate this Agreement.

5.2   Conditions – Vendors

The obligation of the Vendors to complete the Transaction is subject to the following conditions being fulfilled or performed:

(a)   all representations and warranties of the Purchaser contained in this Agreement shall be true in all material respects as of the Closing Time with the same effect as though made on and as of that date; and

(b)   the Purchaser shall have performed in all material respects each of its obligations under this Agreement to the extent required to be performed at or before the Closing Time.

The foregoing conditions are for the exclusive benefit of the Vendors.  Any condition in this Section 5.2 may be waived by the Vendors in whole or in part, without prejudice to any of their rights of termination in the event of non-fulfilment of any other condition in whole or in part. Any such waiver shall be binding on the Vendors only if made in writing. If any condition set forth in Section 5.2 is not satisfied or performed on or prior to the date specified therefor, the Vendors may elect on written notice to the Purchaser to terminate the Agreement.

5.3   Conditions – Purchaser and Vendors

The obligations of the Vendors and the Purchaser to complete the Transaction are subject to the following conditions being fulfilled or performed:

(a)   this Agreement is the Successful Bid (for greater certainty, in accordance with the Bidding Procedures, to the extent any Portion Bid or an Aggregated Bid is the Successful Bid (each such capitalized term as defined in the Bidding Procedures), the Purchaser shall not be obliged to complete the Transaction or purchase any subset of assets or assume any subset of liabilities which are not covered by such Portion Bid or Aggregated Bid);

(b)   the Approval and Vesting Order shall have been obtained and shall not have been stayed, varied, vacated or appealed (or any such appeal shall have been dismissed with no further appeal therefrom);

(c)   no order shall have been issued by a Governmental Authority which restrains or prohibits the completion of the Transaction; and

(d)   no motion, action or proceedings shall be pending by or before a Governmental Authority to restrain or prohibit the completion of the Transaction contemplated by this Agreement.

The Parties hereto acknowledge that the foregoing conditions are for the mutual benefit of the Vendors and the Purchaser.  If the conditions set out in this Section 5.3 are not satisfied performed or mutually waived on or before the Termination Date, any Party shall have the option to terminate this Agreement upon written notice to the other Parties.

SECTION 6

CLOSING

6.1   Closing

Subject to the conditions set out in this Agreement, the completion of the Transaction shall take place at the Closing Time at the offices of Stikeman Elliott LLP, Commerce Court West, 199 Bay Street, Toronto, Ontario, M5L 1B9, or as otherwise determined by mutual agreement of the Parties in writing, but, in any event, shall take place prior to the Termination Date.

6.2   Purchaser’s Deliveries on Closing

At or before the Closing Time, the Purchaser shall execute and deliver, or arrange for the delivery, as the case may be, to the Vendors the following, each of which shall be in form and substance satisfactory to the Vendors, acting reasonably:

(a)   the Closing Cash Payment;

(b)   a payoff letter by the DIP Lender in respect of amounts outstanding under the DIP Facility including outstanding amounts advanced to the Vendors, interest accrued and unpaid thereon and any expenses and other amounts owing thereunder;

(c)   the Assignment and Assumption Agreement and any Specific Conveyance requiring execution by the Purchaser;

(d)   payment of Transfer Taxes required by Applicable Law to be collected by any Vendor, or alternatively, if applicable, the election(s) referred to in Section 3.5(c) executed by the Purchaser;

(e)   joinders to the applicable QSLP Contracts, as required thereunder;

(f)   a document specifying the Purchase Price allocation for tax purposes provided for in Section 3.4;

(g)   a certificate dated as of the Closing Date confirming that all of the representations and warranties of the Purchaser contained in this Agreement are true in all material respects as of the Closing Time, with the same effect as though made at and as of the Closing Time, and that the Purchaser has performed in all respects the covenants to be performed by it prior to the Closing Time;

(h)   an acknowledgement dated as of the Closing Date that each of the conditions precedent in Section 5.1 of this Agreement have been fulfilled, performed or waived as of the Closing Time;

(i)   an access agreement executed by the Purchaser substantially in accordance with the terms and conditions set out in the access agreement term sheet attached hereto as Schedule “N” (the “Access Agreement Term Sheet”) and such reasonable and customary terms, conditions, representations, warranties, and covenants as typically found in agreements of this nature; and

(j)   such further and other documentation as is referred to in this Agreement or as the Vendors may reasonably require to give effect to this Agreement.

6.3   Vendors’ Deliveries on Closing

At or before the Closing Time, the Vendors shall execute and deliver, or arrange for the delivery, as the case may be, to the Purchaser the following, each of which shall be in form and substance satisfactory to the Purchaser, acting reasonably:

(a)   an executed copy of each Specific Conveyance;

(b)   all Consents and Approvals, or with respect to any Consent and Approval which is not obtained, a notarial copy of an Assignment Order in lieu of such Consent and Approval;

(c)   the Assignment and Assumption Agreement and the Books and Records relating to the Purchased Assets;

(d)   a notarial copy of the Approval and Vesting Order;

(e)   a certificate dated as of the Closing Date confirming that there has been no Material Adverse Change; that all of the representations and warranties of the Vendors contained in this Agreement are true in all material respects as of the Closing Time, with the same effect as though made at and as of the Closing Time, and that the Vendors have performed in all material respects the covenants to be performed by them prior to the Closing Time;

(f)   an acknowledgement dated as of the Closing Date that each of the conditions precedent in Section 5.2 of this Agreement have been fulfilled, performed or waived as of the Closing Time;

(g)   an executed copy of the Monitor’s Certificate;

(h)   stock/unit certificates or similar documents representing the QSLP Equity;

(i)   if applicable, the election(s) referred to in Section 3.5(c) executed by the Vendors;

(j)   resignation letters, effective as of the Closing Time, executed by each of the officers, directors or responsible persons nominated, elected or appointed by BSI in QSLP or QSGP;

(k)   an access agreement executed by Grupo Ferroatlantica, S.A substantially in accordance with the terms and conditions as set out in the Access Agreement Term Sheet and such reasonable and customary terms, conditions, representations, warranties and covenants as typically found in agreements of this nature; and

(l)   such further and other documentation as is referred to in this Agreement or as the Purchaser may reasonably require to give effect to this Agreement.

6.4   Possession of Assets

(a)   The Vendors shall remain in possession of the Purchased Assets until Closing.  Until Closing and subject to the last sentence of this Section 6.4(a), the Vendors shall (i) subject to the Orders of the Court in the CCAA Proceedings, use the Purchased Assets only in the Ordinary Course of Business and use commercially reasonable efforts to maintain, preserve and protect the Purchased Assets in the condition in which they exist on the date hereof, other than ordinary wear and tear and other than replacements, dispositions, modifications or maintenance in the Ordinary Course of Business, (ii) not dispose of any of the Purchased Assets other than sale of inventory in the Ordinary Course of Business, and (iii) not enter into any material contract or agreement in respect of any of the Purchased Assets other than in the Ordinary Course of Business; except, in each case, with the prior written consent of the Purchaser, not to be unreasonably withheld, and provided that any failure to respond to any such request for consent within two (2) Business Days of receipt by the Purchaser of such request shall be deemed to be consent hereunder.    Until Closing, and subject to the last sentence of this Section 6.4(a),  BSI shall, to the extent it is empowered to do so pursuant to the QSLP Contracts and the rights attached to the QSLP Equity, (i) cause the business of QSLP to be conducted in the ordinary course consistent with the conduct of such business on the date hereof and (ii) cause QSLP not to make any distributions to the limited partners of QSLP.  BSI and QSLP may enter into the HP2 Severance Transaction Documents after the date of this Agreement and before Closing and in connection therewith BSI shall provide updated Schedules “B” and “F” and an updated Disclosure Letter to reflect the transactions contemplated under the HP2 Severance Transaction Documents and such updated Schedules and the Disclosure Letter shall be accepted by the Purchaser as Schedule “B”, “F” and the Disclosure Letter, as the case may be, hereunder, provided that the Vendors shall only enter into a HP2 Severance Transaction Document if all HP2 Severance Transaction Documents are entered into on or before Closing.

(b)   On Closing, the Purchaser shall take possession of the Purchased Assets where situate at Closing.  The Purchaser acknowledges that the Vendors have no obligation to deliver physical possession of the Purchased Assets to the Purchaser other than as set forth in Section 6.3(h).  In no event shall the Purchased Assets be sold, assigned, transferred or set over to the Purchaser until the conditions set out in the Approval and Vesting Order have been satisfied and the Purchaser has satisfied all delivery requirements outlined in Section 6.2. The Purchaser shall promptly notify the Vendors of any Excluded Assets which may come into the possession or control of the Purchaser shall promptly release such Excluded Assets to the Vendors, or to such other Person as the Vendors may direct in writing, for greater certainty, title shall not be deemed to vest to the Purchaser in respect of any Excluded Assets. The Vendors shall have no obligation to remove any Excluded Equipment from any premises that constitute part of Purchased Assets.  The Purchaser shall permit the Vendors and their agents and representatives to have reasonable access to such premises to prepare for sale, sell and remove any such Excluded Equipment for a period of three (3) months after the Closing Date.  All right, title and interest in any such Excluded Equipment which is not sold or removed from such premises after three (3) months following Closing shall vest in the Purchaser unless the Purchaser objects to such title transfer in which case, right, title and interest shall continue to vest in the applicable Vendor but the Purchaser shall be entitled to dispose of such Excluded Equipment at the Purchaser’s expense.

6.5   Material Adverse Change

The Vendors shall notify the Purchaser upon the occurrence of a Material Adverse Change or the occurrence of any material loss or damage to the Purchased Assets.

6.6   Access Rights

Upon at least two (2) Business Days’ prior notice by the Purchaser to the Vendors and at any time (i)  after the Purchaser has become the Successful Bidder, or (ii) after notice to the Purchaser from the Vendors of the occurrence of an event or circumstance referred to in Section 6.5, the Purchaser may have reasonable access to the Purchased Assets during normal business hours and in each case prior to Closing for the purpose of enabling the Purchaser to conduct such inspections of the Purchased Assets as it deems appropriate, acting reasonably.  Such inspection shall only be conducted in the presence of a representative of the Vendors, if so required at the discretion of the Vendors. The Purchaser shall not conduct any tests, drilling or other invasive action with respect to the Purchased Assets without the prior written consent of the Vendors, which consent may be withheld in the Vendors’ sole and absolute discretion. The Purchaser agrees to indemnify and save the Vendors harmless from and against all claims, demands, losses, actions and costs incurred or arising from or in any way directly related to physical harm to property or people caused by the Purchaser’s inspection of the Purchased Assets or the attendance of the Purchaser, its employees or agents at properties comprising part of the Purchased Assets. For greater certainty, the Purchaser shall not be responsible to indemnify and save the Vendors harmless from and against the findings of the Purchaser’s inspection.

The Vendors shall continue to make the online data room available to the Purchaser, the Back-Up Bidder (as defined in the Bidding Procedures) and their respective employees and advisors.

6.7   Risk

The Purchased Assets shall be and remain at the risk of the Vendors to the extent of their interest until Closing and at the risk of the Purchaser from and after Closing.  If, prior to Closing, the Purchased Assets or the assets of QSLP,shall be substantially damaged or destroyed by fire or other casualty, then, at its option, the Purchaser may decline to complete the Transaction.  Such option shall be exercised within fifteen (15) days after notification to the Purchaser by the Vendors of the occurrence of damage or destruction (or prior to the Closing Date if such occurrence takes place within fifteen (15) days of the Closing Date) in which event this Agreement shall (for greater certainty and without limitation subject to Section 6.10) be terminated automatically.  If the Purchaser does not exercise such option, it shall complete the Transaction and shall be entitled to an assignment of the proceeds of insurance referable to such damage or destruction.  Where any damage or destruction is not substantial (or if it is substantial but the Purchaser declines its option to terminate), the Purchaser shall complete the Transaction and shall be entitled to an assignment of the proceeds of insurance referable to such damage or destruction provided that such damage or destruction is insured or, otherwise, to an agreed abatement.  If any dispute arises under this section as to whether damage or destruction is substantial or with respect to the amount of any abatement, such dispute will be determined in accordance with Section 6.8.

6.8   Dispute Resolution

If any dispute arises:

(a)   under Section 6.7 as to whether any damage or destruction is substantial or with respect to the amount of any abatement; or

(b)   with respect to any other matter related to the Transaction or the interpretation or enforcement of this Agreement;

such dispute will be determined by the Court, or by such other Person or in such other manner as the Court may direct.

6.9   Termination

This Agreement shall automatically terminate at any time prior to the Closing Time upon the occurrence of any of the following:

(a)   by mutual written agreement of the Vendors and the Purchaser;

(b)   if the Agreement is not the Successful Bid or the Back-Up Bid (as determined pursuant to the Bidding Procedures); or

(c)   if the Agreement is the Back-Up Bid and the transaction contemplated by the Successful Bid is closed.

This Agreement may be terminated at any time prior to the Closing Time upon the occurrence of any of the following:

(d)   as provided in Section 5 (provided that the terminating Party has not breached its obligations under the Agreement in such a manner as to cause a closing condition not to be fulfilled) or Section 6.7; or

(e)   by any of the Parties (provided that the terminating Party has not breached its obligations under the Agreement in such a manner as to cause a closing condition not to be fulfilled) if Closing shall not have occurred on or prior to the Termination Date in accordance with Section 5.3.

If this Agreement is terminated in the circumstances set out in this Section, all further obligations of the Parties under this Agreement will terminate and neither Party shall have any liability or further obligations hereunder, except as contemplated in Section 6.10, which shall survive such termination.

6.10   Effects of Termination and Closing

(a)   If this Agreement is terminated pursuant to Section 5, 6.7 or  6.9, all further obligations of the Parties under or pursuant to this Agreement shall terminate without further liability of any Party to the other except for the provisions of: (i) Section 3.3 (Deposit); (ii) Section 6.10 (Effects of Termination and Closing); and (iii) Section 7.2 (Expense Reimbursement).

(b)   If the Transaction is not completed solely as a result of Purchaser’s failure to perform any of its obligations hereunder, then the Deposit shall be forfeited to the Vendors as liquidated damages and the Vendors shall have no other rights and remedies against the Purchaser available at law or in equity.

(c)   Under no circumstance shall any of the Parties, their Representatives or their respective directors, officers, employees or agents be liable for any special, punitive, exemplary, consequential or indirect damages (including loss of profits) that may be alleged to result, in connection with, arising out of, or relating to this Agreement or the transactions contemplated herein.

6.11   Assumption of Obligations

At the Closing Time and conditional upon Closing, the Purchaser agrees to pay and be responsible for all the liabilities and obligations of the Vendors under the Contracts to the extent that such liabilities and obligations consist of liabilities or obligations that arise out of events or circumstances that occur after the Closing Time or are to be performed after the Closing Time.

SECTION 7

BIDDING PROCEDURES

7.1   Bidding Procedures Order

The Parties acknowledge and agree that the Bidding Procedures Order recognized the Stalking Horse Agreement as a baseline or “stalking horse bid” and approved the payment of the Expense Reimbursement in the circumstances set out in Section 7.2 of the Stalking Horse Agreement.

7.2   Expense Reimbursement

Notwithstanding the entry into of this Agreement, the Parties acknowledge and agree that the Expense Reimbursement remains payable in accordance with Section 7.2 of the  Stalking Horse Agreement, as approved by the Bidding Procedures Order, and that nothing herein shall constitute or be deemed to constitute any amendment, alteration, modification to, or waiver of any rights in respect of, Section 7.2 of the Stalking Horse Agreement or the Bidding Procedures Order.

SECTION 8

PERFORMANCE GUARANTEE

8.1   Performance Guarantee

(a)   The Guarantor irrevocably and unconditionally guarantees the timely and complete performance of, and compliance with the Purchaser’s obligations under Sections 3.1, 3.2 (excluding 3.2(d)), 3.4, 3.5, 3.6, 3.7, 9.1 and 9.10 (collectively, the “Guaranteed Obligations”).

(b)   If for any reason the Purchaser fails at any time to perform or comply with any Guaranteed Obligation that is to be performed or complied with by the Purchaser under this Agreement, then the Guarantor shall perform or comply with such Guaranteed Obligation in accordance with and subject to the provisions of this Agreement.  Such performance or compliance by the Guarantor is deemed to be performance or compliance by the Purchaser under this Agreement.

(c)   The Guarantor is jointly and severally liable with the Purchaser for the performance of, and compliance with, the Guaranteed Obligations.  The Vendors are not bound to proceed against the Purchaser or to pursue any rights or remedies against the Purchaser before being entitled to pursue its rights against the Guarantor.

(d)   The obligation of the Guarantor in this Section 8 shall terminate immediately upon Closing or a termination of this Agreement that is not solely as a result of a failure of the Purchaser to perform any of its obligations hereunder except, in the case of a Closing, for the Guaranteed Obligations in respect of (i) the determination of the Statement of BSI Working Capital in accordance with Section 3.6, (ii) the payment of the Purchase Price adjustment, if any, pursuant to Section 3.7 and (iii) the indemnity obligation of the Purchaser in Section 9.10 which shall survive until satisfaction of the matters referred to in paragraphs (i) and (ii) above have been completed and thereafter shall terminate (except in respect of any amounts that have become due under Section 9.10 prior to such date).

(e)   The guarantee shall be in favour of the Vendors and no other party shall be considered a third party beneficiary.

8.2   Absolute Liability

The liability of the Guarantor is absolute and unconditional irrespective of: (i) any lack of validity or enforceability of any Guaranteed Obligation against the Purchaser (other than the termination of any Guaranteed Obligations in accordance with the terms hereof); (ii) any change in the time or times for, or place or manner of performance or any other indulgences which the Vendors may grant to the Purchaser; (iii) any amendment, restatement, replacement, supplement, modification or renewal of this Agreement; (iv) any assignment of all or any part of this Agreement; (v) any limitation of status or power, disability, incapacity or other circumstance relating to the Purchaser, including any bankruptcy, insolvency, winding-up, dissolution, liquidation, restructuring or other creditors’ proceedings involving or affecting the Purchaser; or (vi) any change in the ownership, control, name, objects, businesses, assets, capital structure or constitution of the Purchaser or any reorganization, amalgamation or other change in the existence of the Purchaser.

8.3   Defences

The liabilities and obligations of the Guarantor under this Section 8 are subject to the terms of this Agreement and will not exceed any liability or obligation of the Purchaser to the Vendors under this Agreement.  The Guarantor is entitled to all rights, privileges and defences available to the Purchaser with respect to any obligation or liability, including without limitation all provisions of this Agreement relating to limitation of liability and the resolution of disputes.

8.4   Payment on Demand

The Guarantor will pay and perform its liabilities and obligations under this Section 8 immediately after demand for such payment and performance is made in writing to it.  Under no circumstances shall the Guarantor’s obligation hereunder exceed the Purchase Price, as it may be adjusted pursuant to Section 3.7. For the avoidance of doubt, upon the payment of the Purchase Price by the Guarantor, the Guarantor shall be subrogated to the rights of the Purchaser and subject to the obligations of the Purchaser, all in accordance with the terms of this Agreement.

SECTION 9

GENERAL

9.1   Access to Books and Records

(a)   For a period of 6 years from the Closing Date or for such longer period as may be required by Applicable Law, the Purchaser will retain all original Books and Records that are transferred to the Purchaser under this Agreement.  So long as any such Books and Records are retained by the Purchaser pursuant to this Agreement and subject to Section 9.1(c), each Vendor (and any representative, agent, former director or officer or trustee in bankruptcy of the estate of either Vendor) has the right to inspect and to make copies (at its own expense) of them at any time upon reasonable request during normal business hours and upon reasonable notice for any proper purpose and without undue interference to the business operations of the Purchaser.

(b)   Subject to Section 9.1(c), for a period of the lesser of (x) 6 years from the Closing Date and (y) so long as the Purchaser together with any Affiliate thereof controls QSLP or QSGP, the Purchaser shall cause QSGP to permit each Vendor (and any representative, agent or trustee in bankruptcy of the estate of either Vendor) to inspect the books and records of the Vendors maintained by QSGP and QSLP and to make copies (at its own expense) of them at any time upon reasonable request during normal business hours and upon reasonable notice for any proper purpose and without undue interference to the business operations of the Purchaser. Any information received by the Purchaser or its representatives pursuant to this Section 9.1 shall be held in strict confidence except as may be required by Applicable Law (including disclosure required in connection with any tax returns or bankruptcy and insolvency proceedings).

(c)   If a Vendor or its affiliates are engaged in any business that competes, directly or indirectly, with the business carried on by QSLP, then the Purchaser shall only be required to provide the right to inspect as contemplated in Section 9.1(a) or (b) to such Vendor if the sole purpose is of evaluating or preparing any of its tax returns, the sale of the remaining assets of either Vendor, in respect of any third party claim against such Person or in connection with any bankruptcy and insolvency proceeding.  For greater certainty, the right of Monitor, any former director or officer or any trustee in bankruptcy of the estate of either Vendor to inspect books and records and make copies thereof shall not be restricted under this Section 9.1(c).

9.2   Notice

Any notice or other communication under this Agreement shall be in writing and may be delivered personally or transmitted by fax or e-mail, addressed:

in the case of the Purchaser, as follows:

QSI Partners Ltd.

1st Floor – Windward 1

Regatta Office Park

PO BOX 10338

Grand Cayman KY1-1003

Cayman Islands

Attention:                     Desiree Mercer

Fax:                     (345) 949-7230

Telephone:                     (345) 949-7232

with a copy to:

Torys LLP

79 Wellington Street West

Suite 3000

Toronto, Ontario

M5K 1N2

Attention:                     David Bish

Fax:                     (416) 865-7380

Email:                               dbish@torys.com

and in the case of the Guarantor, as follows:

Globe Specialty Metals, Inc.

One Penn Plaza

250 West 34th Street, Suite 4125

New York, NY 10119

Attention:                     Stephen Lebowitz

Fax:                     (212) 798-8137

Telephone:                     (212) 798-8122

with a copy to:

Torys LLP

79 Wellington Street West

Suite 3000

Toronto, Ontario

M5K 1N2

Attention:                     David Bish

Fax:                     (416) 865-7380

Email:                               dbish@torys.com

and in the case of the Vendors, as follows:

Timminco Limited

150 King Street West, 2401

Toronto, Ontario

M5H 1J9                     

Attention:                     Peter Kalins,

President, General Counsel and Corporate Secretary

Fax:                     (416) 364-3451

Email:                               PKalins@timminco.com

with a copy to:

Stikeman Elliott LLP

5300 Commerce Court West, 199 Bay Street

Toronto, Ontario

M5L 1B9

Attention:                     Daphne MacKenzie

Fax:                     (416) 947-0866

Email:                               dmackenzie@stikeman.com

with a copy to the Monitor:

FTI Consulting Canada Inc.

TD Waterhouse Tower, Suite 2010

79 Wellington Street

Toronto, Ontario

M5K 1G8

Attention:                     Nigel Meakin

Fax:                     (416) 649-8101

Email:                               nigel.meakin@fticonsulting.com

with a copy to:

Blake, Cassels & Graydon LLP

199 Bay Street

Suite 4000, Commerce Court West

Toronto, Ontario

M5L 1A9

Attention:                     Linc Rogers

Fax:                     (416) 863-2653

Email:                               Linc.Rogers@blakes.com

Any such notice or other communication, if given by personal delivery, will be deemed to have been given on the day of actual delivery thereof and, if transmitted by fax or e-mail before 5:00 p.m. (Toronto time) on a Business Day, will be deemed to have been given on such Business Day, and if transmitted by fax or e-mail after 5:00 p.m. (Toronto time) on a Business Day, will be deemed to have been given on the Business Day after the date of the transmission.

9.3   Time

Time shall, in all respects, be of the essence hereof, provided that the time for doing or completing any matter provided for herein may be extended or abridged by an agreement in writing signed by the Vendors and the Purchaser or by their respective solicitors.

9.4   Currency

Except where otherwise indicated, all references herein to money amounts are in Canadian currency.

9.5   Survival

The representations and warranties of the Parties contained in this Agreement shall merge on Closing and the covenants of the Parties contained herein to be performed after the Closing shall survive Closing and remain in full force and effect.

9.6   Benefit of Agreement

This Agreement shall enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns. Each Party intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the Parties and their successors and permitted assigns, and no Person, other than the Parties and their successors and their permitted assigns, shall be entitled to rely on the provisions hereof in any action, suit, proceeding, hearing or other forum.

9.7   Entire Agreement

This Agreement, the attached Schedules hereto, the letter contemplated in Sections 1.1(ccc) and 1.1(mmmm), the Disclosure Letter and the confidentiality and standstill agreement dated as of January 6, 2012 between Timminco and the Purchaser, as supplemented by the addendum thereto dated as of January 11, 2012, the DIP Amendment,  constitute the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior negotiations, understandings and agreements.  This Agreement may not be amended or modified in any respect except by written instrument executed by all of the Parties.

9.8   Paramountcy

In the event of any conflict or inconsistency between the provisions of this Agreement, and any other agreement, document or instrument executed or delivered in connection with this Transaction or this Agreement, the provisions of this Agreement shall prevail to the extent of such conflict or inconsistency.

9.9   Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein and each of the Parties irrevocably attorns to the non-exclusive jurisdiction of the courts of the Province of Ontario.

9.10   Commission

The Purchaser agrees to indemnify the Vendors against any claim for compensation or commission by any third party or agent retained by the Purchaser in connection with, or in contemplation of, the Transaction and the Vendors shall jointly and severally indemnify the Purchaser for any third party or agent or broker fees or other commissions payable by the Vendors on the Purchase Price or otherwise in connection with the Transaction.

9.11   Assignment by Purchaser

This Agreement may not be assigned by the Purchaser without the prior written consent of the Vendors, which consent may be withheld in the Vendors’ sole and absolute discretion; provided, however that the Purchaser shall be permitted to assign the benefit of all or a portion of this Agreement prior to or after Closing to an Affiliate thereof in circumstances where (i) prior notice of such assignment is provided to the Vendors, (ii) such assignee agrees to be bound by the terms of this Agreement to the extent of the assignment, and (iii) such assignment shall not release the Purchaser or the Guarantor (in the case of the Guarantor during the existence of the Guarantee) from any obligation or liability hereunder in favour of the Vendors and the Purchaser and the Guarantor (in the case of the Guarantor during the existence of the Guarantee) shall acknowledge and confirm their continuing obligations and liabilities in favour of the Vendors in form and substance satisfactory to the Vendors; for greater certainty, the Purchaser shall be permitted to assign the right to buy all or a portion of the Purchased Assets to one or more Affiliates and such assignment shall be permitted so long as the requirements of this Section 9.11 are complied with. This Agreement may not be assigned by the Vendors without the consent of the Purchaser.

9.12   Further Assurances

Each of the Parties shall, at the request and expense of the requesting party, take or cause to be taken such action and execute and deliver or cause to be executed and delivered to the other such documents (including registrations and removal of Encumbrances (other than Permitted Encumbrances)) and further assurances as may be reasonably necessary or desirable to give effect to this Agreement.

9.13   Counterparts

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same agreement.  Transmission by facsimile or by e-mail of an executed counterpart of this Agreement shall be deemed to constitute due and sufficient delivery of such counterpart.

9.14   Severability

Notwithstanding any provision herein, if a condition to complete the Transaction, or a covenant or an agreement herein, other than those contained in Section 3.1, Section 3.5, Section 6 or Section 8, is prohibited or unenforceable pursuant to applicable law, then such condition, covenant or agreement shall be ineffective to the extent of such prohibition or unenforceability without invalidating the other provisions hereof.

[THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.

BECANCOUR SILICON INC.
By:	/s/ Peter A.M. Kalins
	Name:        Peter A.M. Kalins
	Title:           President, General Counsel and Corporate Secretary

TIMMINCO LIMITED
By:	/s/ Douglas Fastuca
	Name:        Douglas Fastuca
	Title:           Chief Executive Officer

QSI PARTNERS LTD.
By:	/s/ Alan Kestenbaum
	Name:        Alan Kestenbaum
	Title:           Executive Chairman

GLOBE SPECIALTY METALS, INC.
By:	/s/ Alan Kestenbaum
	Name:        Alan Kestenbaum
	Title:           Executive Chairman

Schedule A

Purchased Silicon Metal Assets

Schedule B

BSI Owned Property

Schedule C

Intentionally Deleted

Schedule D

Bidding Procedures Order

Schedule E

Permitted Encumbrances

Schedule F

QSLP Contracts

Schedule G

Silicon Metal Contracts

Schedule H

[Intentionally Deleted]

Schedule I

Monthly Reimbursement

Schedule J

Solar Grade Silicon Contracts

Schedule K

Consents and Approvals

Schedule L

Estimated Working Capital Statement

Schedule M

Sample QSLP Working Capital Statement

EX-10.1

EXHIBIT 10.1

OUTPUT AND SUPPLY AGREEMENT

This Output and Supply Agreement (this "Agreement"), dated as of October 1, 2010 (the "Effective Date"), is entered into by and among Silicium Québec Société en Commandite / Québec Silicon Limited Partnership, a limited partnership established under the laws of the Province of Québec, Canada ("Becancour LP"), Dow Corning Corporation, a Michigan corporation ("DCC"), and Bécancour Silicon Inc., a corporation governed by the laws of Québec ("BSI") (DCC and BSI, each a "Customer").

W I T N E S S E T H:

WHEREAS, BSI is a wholly-owned subsidiary of Timminco Limited ("TL");

WHEREAS, DCC, TL and BSI have entered into that certain Framework Agreement dated as of August 10, 2010 (the "Framework Agreement"), pursuant to which DCC acquired forty-nine percent (49%) of the equity interests in Becancour LP. BSI owns the remaining fifty-one percent (51%) of the equity interests in Becancour LP;

WHEREAS, Dow Corning Canada, Inc., Québec Silicon General Partner Inc. and BSI have entered into that certain Amended and Restated Limited Partnership Agreement, dated as of October 1, 2010, setting forth certain governance terms relating to the operation of Becancour LP (the "Limited Partnership Agreement"); and

WHEREAS, the Framework Agreement requires Becancour LP, DCC and BSI to execute this Agreement on or prior to the Closing Date (as defined in the Framework Agreement) setting forth the terms upon which Becancour LP will produce and supply silicon metal of certain grades as specified herein to DCC and BSI, and dedicate its entire output to such parties.

NOW, THEREFORE, in consideration of the foregoing and the terms and conditions set forth herein, intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I

PRODUCT

1.1   Product

Becancour LP shall produce the following [*]; in each case to the extent that such grade of silicon metal meets the Product specifications of each Customer. Each such grade of silicon metal is referred to as a "Product Line", and each such Product Line, as well as any other products produced hereunder on behalf of a Customer pursuant to such Customer's Specifications, is referred to as a "Product". DCC's initial Product specifications are those specifications designated by DCC and set forth in [*] (as modified in accordance with the terms hereof, the "DCC Specifications"). BSI's Product specifications are those specifications designated by BSI for Product being produced for BSI as of the Effective Date (as modified in accordance with the terms hereof, the "BSI Specifications" and, together with DCC's Specifications, the "Specifications"). Each Customer may modify its Specifications from time to time in accordance with Section 5.1(b), provided that to the extent that such modifications require amending any of the terms of this Agreement, the parties shall promptly execute an amendment to this Agreement in a manner that does not adversely affect the other Customer (including with respect to Price or Customer Output Capacity (each as defined below)).

1.2   Other Products and By-Products

Becancour LP may not produce any products other than the Products as requested by a Customer in such Customer's Specifications, except that Becancour LP may produce any non-silicon metal by-products as a result of Product production for Customers in the ordinary course ("By-Products"). Becancour LP may only produce products within the Product Lines except in the event that the Customers have agreed in accordance with the terms of the Limited Partnership Agreement that Becancour LP may produce grades of silicon metal other than the Product Lines ("Other Products"). If the parties agree to the production of Other Products, the parties hereto shall promptly execute, to the extent necessary, an amendment to this Agreement, provided that neither Customer shall be adversely affected by such amendment (including with respect to Price or Customer Output Capacity). BSI, on behalf of Becancour LP, shall use commercially reasonable efforts to sell any By-Products to third parties, pursuant to that certain Agency Services Agreement between BSI and Becancour LP dated as of the date hereof as such may be amended from time to time ("Agency Services Agreement"), provided that such By-Products shall be sold on market terms and all revenues from such sales (net of any commissions payable to BSI pursuant to the Agency Services Agreement) shall be deducted from the Actual Full Cost (as defined below) of producing Product as provided in Section 4.3.

ARTICLE II

QUANTITY AND ALLOCATION

2.1   Minimum Product Commitment.

For each calendar year, each Customer shall purchase its allocated share of the volume of Product produced by Becancour LP in such year pursuant to the Production Plan as agreed pursuant to Section 5.1(b). In the event that a Customer does not wish to purchase any portion of its allocation of Product, such Customer shall act in accordance with Section 2.3.

2.2   Allocation of Product Production Capacity.

(a)   Subject to [*], Becancour LP shall allocate fifty-one percent (51%) of its total annual production capacity, as measured in metric tons of shippable Product produced for the Customers pursuant to the Specifications (the "Customer Output Capacity"), meeting the BSI Specifications to BSI and shall allocate forty-nine percent (49%) of its total annual Customer Output Capacity meeting the DCC Specifications to DCC. In the event that a Customer changes its Specifications [*] resulting from such change in Specifications (whether a material loss of capacity as a result of the conversion of equipment to accommodate such change in Specifications or any other factor affecting production capacity) shall be [*] to such Customer. If the Parties have agreed, in accordance with the terms of the Limited Partnership Agreement, to expand the production capacity of Becancour LP beyond the three (3) furnaces that are in operation as of the Effective Date, BSI shall be entitled to fifty-one percent (51%) and DCC shall be entitled to forty-nine percent (49%) of such additional Customer Output Capacity, unless the Customers mutually agree otherwise in writing.

(b)   [*]

(c)   [*]

2.3   Option to Purchase Unwanted and Unused Allocation

If either Customer elects not to purchase any portion of its allocation of Product that has not yet been produced (and is not in process) by Becancour LP, such Customer shall provide written notice to the other Customer and Becancour LP at least sixty (60) days prior to the scheduled production of such Product of the amount of Product it wishes not to purchase (the "Non-Purchased Product") and, subject to this Section 2.3, such Customer shall not be required to purchase the Non-Purchased Product. Within thirty (30) days following receipt of any such notice, the other Customer shall have the option, upon written notice to Becancour LP and the other Customer, to elect to purchase any or all of such allocation of Non-Purchased Product (which shall be produced according to such purchasing Customer's Specifications in the Product Line of such purchasing Customer's choosing), at [*], and Becancour LP shall invoice such purchase in accordance with Article IV herein. If such other Customer does not purchase all of the Non-Purchased Product, then:

(a)   the Customer that elects to purchase less than its full allocation of Product (the "Short Customer") shall [*];

(b)   the Short Customer shall [*]; and

(c)   [*].

An illustration of the shortfall amount attributable to unwanted Product allocation is attached as [*]. Notwithstanding the foregoing, the parties may, by mutual agreement, determine to change the total Product output of Becancour LP on a proportional basis and the related [*], without any Customer then being required to comply with the provisions of Section 2.3 (unless a Customer does not wish to purchase any portion of its allocation of Product based on the new arrangements then set). [*].

ARTICLE III

COMPLIANCE WITH LAW

3.1   Compliance with Laws

Becancour LP shall use its reasonable best efforts to comply in all material respects with, and shall ensure that the Product is manufactured in accordance with, all applicable Laws (as defined in the Framework Agreement), including the applicable provisions (as amended) of: An Act Respecting Labour Standards (R.S.Q. c. N-1.1); the Canada Labour Code (R.S.C. 1985, c. L-2); An Act Respecting Occupational Health and Safety (R.S.Q. c. S-2.1); An Act Respecting Industrial Accidents and Occupational Diseases (R.S.Q. c. A-3.001); the Charter of Human Rights and Freedoms (R.S.Q. c. C-12); the Canadian Environmental Protection Act, 1999 (S.C. 1999, c. 33); the Environment Quality Act (R.S.Q. c. Q-2); the Transportation of Dangerous Goods Act, 1992 (S.C. 1992, c. 34); the Transportation of Dangerous Goods Regulations (SOR/2001-286); and the Transportation of Dangerous Substances Regulation, 2002 (G.O.Q. 2, 4073).

3.2   Additional Obligations

Upon the request of a Customer, Becancour LP shall provide such Customer such information as may be reasonably required for the Customer to comply with all Laws with respect to the Product. Without limiting Becancour LP's obligation to comply with the Specifications, Becancour LP shall further:

(a)   adhere to industry standards for quality control and safe handling;

(b)   upon the request of a Customer or if required by Law, send each Customer (i) a copy of current Material Safety Data Sheets covering the Product and (ii) timely updates thereto; and

(c)   collaborate with each Customer in the implementation of environmental, health and safety practices relating to the Product. Such practices shall include, but without being limited thereto, handling, storage, use, disposal, recycling, waste minimization and waste management of the Product.

3.3   Responsible Care

Each Customer is committed to support a continuing effort to improve the chemical industry's responsible management of chemicals by following the principles of the Responsible Care® initiative of the American Chemistry Council and the Responsible Care® initiative of the Chemistry Industry Association of Canada, in each case as set forth in [*]. Becancour LP agrees to operate its business in a manner that is consistent with these principles or a similarly comprehensive health, safety and environmental program.

ARTICLE IV

PRICE AND PAYMENT

4.1   Price

Subject to Section 4.2, 4.3 and 4.4, for each metric ton of Product produced for a Customer, such Customer shall pay [*].

4.2   Budgeted Full Cost

[*]

4.3   Actual Full Cost

During each Price True-Up, the parties shall discuss and mutually agree to [*],

(a)   [*];

(b)   [*]; and

(c)   [*].

[*].

4.4   Price True-Up

[*].

4.5   Payment

Becancour LP shall invoice each Customer (a) within [*] days after the end of each month for Product produced according to such Customer's Specifications and delivered to such Customer during such month and any amounts required to be reimbursed or paid by such Customer to Becancour LP pursuant to this Agreement (including Section 2.3)with respect to activities during such month and (b) within [*]. Invoices shall be issued to both Customers on the same day and shall be due and payable no later than [*] days after the Customer's receipt of an invoice. If either Customer does not pay an invoice in full when due, Becancour LP shall be entitled to (a) charge interest on any unpaid amount at the rate of [*] per month, which interest shall accrue daily from the due date until such time as such amount is paid in full; and (b) in the event that a Customer's payment is more than [*] past due, refrain from [*].

ARTICLE V

PRODUCTION PLANNING AND MEETINGS

5.1   Annual Production Planning Meeting

(a)   Minimum Product Production

Becancour LP shall use commercially reasonable efforts to produce an aggregate of at least 47,000 metric tons of Product during each calendar year during the term of the Agreement, unless the Customers mutually agree otherwise pursuant to the Production Plan (the "Minimum Annual Production"). The Customers acknowledge that the Minimum Annual Production is a target, based on the initial benchmark production capacity as agreed upon by the Customers in connection with the Framework Agreement, and that actual annual production volumes shall be dependent upon such items as planned maintenance and downtime as well as the availability of raw materials, power, employees on commercially viable terms and other operational constraints that may arise, which events Becancour LP shall address in good faith and in the ordinary course of business. If Becancour LP is unable to produce the volume of Minimum Annual Production due to Force Majeure Event (as defined below), the shortfall in production during such year shall be applied to each Customer's allocated Customer Output Capacity (as defined below) in proportion to the allocation of Product set forth in Section 2.2.

(b)   Annual Production Planning Meeting

The parties shall, through the Operating Committee appointed pursuant to the Limited Partnership Agreement (the "Operating Committee"), hold an annual production planning meeting at a mutually convenient time in the last two (2) weeks of October of each year (the "Annual Production Planning Meeting") to discuss and mutually agree to Becancour LP's production and delivery schedule for the following calendar year (the "Production Plan"), including (i) the total Customer Output Capacity planned for the following calendar year, (ii) the volume of Product in each Product Line to be produced on a month-to-month basis according to each Customer's Specifications, (iii) the production schedules relating thereto, (iv) planned capital expenditures, (v) any planned shutdown of the Becancour LP plant, and (vi) whether a Customer believes that it can provide any key raw material used in the production of the Product (with equivalent or better quality) to Becancour LP at a lower cost than Becancour LP is paying at such time and, if so, the terms of such arrangement, and (vii) any changes to a Customer's Specifications and the effect of such changes on the production schedule and Price, including any changes to the cost allocation to equitably reflect the changes in the Specifications. The Production Plan and the other agreements of the parties with respect to the other items set forth in this Section 5.1(b) and Sections 4.2 and 4.3 shall be memorialized in writing. Without limiting the foregoing, during the Annual Production Planning Meeting, the parties shall discuss the scheduling of the production time of the plant to accommodate the output needs of each Customer consistent with the use of the capacity dedicated to each Customer, as specified in Section 2.2. For the fourth quarter of 2010, the Budgeted Full Cost for each Product Line and the Production Plan shall be as set forth in [*].

(c)   Key Raw Materials

If any Customer believes it can provide any key raw material (with equivalent or better quality) to Becancour LP at a lower cost than Becancour LP's current cost (and taking into consideration the raw materials requirements to meet the Specifications and any costs associated with terminating existing raw materials supply relationships, provided that any such costs associated with termination of affiliate supply relationships must be reasonable) and provides written notice to Becancour LP to such effect, then Becancour LP shall have the option in its discretion, acting in a commercially reasonable manner, to accept such key raw material from such Customer. If a Customer so supplies any key raw material, the price for the Product will be adjusted so that the economic benefit is applied to each Customer in proportion to the allocation of Product under Section 2.2; provided, that, if such economic benefit is only applicable to a particular Customer's Product (based on such Customer's Specifications), then the applicable Customer shall receive the entire economic benefit thereof.

5.2   Quarterly Meetings

The Customers and Becancour LP shall, through the Operating Committee, meet quarterly during the month immediately prior to the end of each calendar quarter to discuss and mutually agree to (a) any adjustments to the then-current Production Plan and/or (b) subject to Section 2.3, any changes in the total output production.

ARTICLE VI

SHIPMENT, DELIVERY AND STORAGE

6.1   Shipments and Packaging

Shipments of Product will be made Free Carrier at Becancour LP, Bécancour, Québec, Canada, loaded to each Customer's rail car, truck or shipping container. Each Customer shall select the carrier and the routing for its respective deliveries. Becancour LP shall load Product to the applicable Customer's rail cars, trucks or shipping containers at no additional cost to such Customer. To the extent any Customer requires a method of shipment or packaging (e.g., bulk totes) other than the foregoing, any additional costs of such shipment or packaging incurred by Becancour LP shall be considered special costs and shall be charged only to such Customer in accordance with Section 4.3(b), unless the Customers mutually agree otherwise in writing. All references in this Agreement to delivery terms shall use and refer to the Incoterms as published by the International Chamber of Commerce, 2000 edition.

6.2   Delivery

Becancour LP shall deliver the monthly volumes of Product to each Customer in accordance with the delivery schedule in the Production Plan. Delivery by Becancour LP of Product shall be deemed to have occurred: (a) for Product that is not stored pursuant to Section 6.4, at such time as such Product is delivered to the carrier of such Customer (or of such Customer's subsequent, third party customer (an "End-Customer")); and (b) for Product that is stored pursuant to Section 6.4, at such time as such Product is placed in storage. Upon request of the Customer that had requested storage of such Product, such Product shall be removed from storage and loaded onto such Customer's (or End-Customer's) carrier.

6.3   Product Inspection

All Product will be subject to final inspection and approval by the applicable Customer (or End-Customer) within [*] days after: (a) for deliveries made pursuant to Section 6.2(a), the date on which such Customer (or End-Customer) has received both the applicable Product delivery at such Customer's (or End-Customer's) site and the related certificate(s) of analysis; and (b) for deliveries made pursuant to Section 6.2(b), the date [*] and such Customer (or End-Customer) has received the related certificate(s) of analysis. A Customer may reject any such Product that does not meet the applicable Specifications or contains foreign material, even if such Customer [*]. In such case, Becancour LP shall, at the Customer's option, either: (a) replace the non-conforming Product, provided that such Customer shall designate, in its reasonable discretion, when such replacement shall be furnished to such Customer (or End-Customer), and provided further that such Customer shall provide Becancour LP with no less than ten (10) days prior written notice of such date; (b) refund the Price of the non-conforming Product and deduct the volume of the non-conforming Product from such Customer's Product commitment pursuant to Section 2.1 during the applicable calendar year; or (c) if Becancour LP cannot replace such non-conforming Product within [*] days of notice to Becancour LP of the rejection thereof, to the extent such Customer [*], Becancour LP shall, in accordance with Section 4.4, refund the Price of the non-conforming Product and [*], provided that, for purposes of this Section 6.3, such cost shall not exceed [*]. Any production capacity spent manufacturing replacement Product shall be allocated in proportion to the allocation of Product under Section 2.2. Without limiting the foregoing, Becancour LP shall arrange, at its own expense, for prompt return or disposal of any non-conforming Product, which disposal may include the sale by Becancour LP of such non-conforming Product to a third party.

6.4   Storage

(a)   Storage Services

At any time before Becancour LP has initiated shipment of Product to a Customer (or its End-Customer) pursuant to Section 6.1, such Customer may elect to store such Product at Becancour LP's facilities, up to a maximum of (i) for DCC, forty-nine percent (49%) or (ii) for BSI, fifty-one percent (51%) of the maximum storage space for Product at Becancour LP's facilities, provided that to the extent that a Customer does not use its allocated maximum, the other Customer may avail itself of such unused storage space until such time as the original Customer requires such storage space. Title to any such stored Product will shift to the applicable Customer at such time as such Product has been placed in storage and the applicable invoice has been issued to such Customer in accordance with Section 4.5. DCC may use the storage space afforded to it under this Agreement for Product produced for it under this Agreement or for product being supplied to it by BSI or its affiliates pursuant to other arrangements. Each Customer shall reimburse Becancour LP for all actual costs incurred by Becancour LP in providing off-site storage to such Customer pursuant to this Section 6.4.

(b)   Storage Conditions

Becancour LP shall comply with the following storage conditions:

(i)   the storage location shall be in a secure covered location with signs will be posted at all entrances to the storage location with the following language: "The Silicon stored within this Area is owned by [DCC/BSI]." Each Customer may inspect the storage location and Product stored therein upon reasonable notice and at reasonable times;

(ii)   the Product will be kept free from contamination by water, oil, scrap wood, scrap steel, concrete pieces or other contaminates; and

(iii)   Becancour LP shall identify the furnace taps associated with each storage location and will communicate the relevant tap quality data associated with Product loaded into each of Customer's containers.

ARTICLE VII

TERM AND TERMINATION

7.1   Term

This Agreement shall commence as of the Effective Date and shall continue in perpetuity until terminated pursuant to Section 7.2.

7.2   Automatic Termination

This Agreement shall automatically terminate upon the dissolution or liquidation of Becancour LP in accordance with the Limited Partnership Agreement.

7.3   Bankruptcy; Insolvency

The Parties acknowledge and agree that the bankruptcy or insolvency of one Customer shall not affect the rights of the other Customer pursuant to this Agreement.

ARTICLE VIII

AUDIT RIGHTS

8.1   Right to Audit

(a)   Upon reasonable prior written notice, each Customer and its representatives shall have the right to conduct in-depth audits of (a) Becancour LP's operations, including its facilities and books and records, and (b) the basis for the Actual Full Cost charged by Becancour LP to such Customer, in connection with this Agreement, one (1) time per calendar year or more frequently if reasonably required in order to comply or remain in compliance with any applicable Law. Each Customer shall bear the costs of all audits conducted by such Customer.

(b)   Becancour LP shall provide the auditing Customer and its employees, contractors, agents, or other representatives with such information, reasonable assistance and access to Becancour LP's premises, employees and books and records as is reasonably necessary in order for such Customer to fully and promptly carry out each audit. Becancour LP shall ensure that all of its personnel reasonably cooperate with any such audit.

(c)   If a Customer's exercise of its rights under this Section 8.1 results in audit findings that Becancour LP has failed to perform its obligations under this Agreement, the auditing Customer shall make the audit findings available to Becancour LP and the other Customer. The Customers and Becancour LP shall use commercially reasonable efforts to agree to a remedial plan and a timetable for achievement of the planned actions and/or improvements. Following such agreement, Becancour LP shall implement that plan in accordance with the agreed time table and shall confirm its completion by a notice in writing to such Customer.

(d)   If a Customer's exercise of its rights under this Section 8.1 results in audit findings that a Customer has overpaid or underpaid for Product (in each case after giving effect to a Price True-Up for the applicable period) then (i) in the event of an overpayment, Becancour LP shall pay such Customer's overpayment, or (ii) in the event of an underpayment, such Customer shall pay Becancour LP an amount equal to such underpayment, in each case within thirty (30) days following such delivery to Becancour LP of the audit findings unless disputed by Becancour LP, in which case, promptly following final determination of such dispute in accordance with Article X.

ARTICLE IX

CONFIDENTIALITY

9.1   Confidential Information

The contents of this Agreement and all information furnished to one party by any other party or derived from the information furnished by a party in the performance of this Agreement ("Confidential Information") are to be kept confidential between the parties, not disclosed to any third party and not used by a receiving party except as permitted herein and except for the specific purpose of performing its obligations or exercising its rights hereunder. Each party shall inform those performing services on its behalf in accordance with this Agreement of these obligations and shall be responsible for all violations by such persons of this Article IX. Each party agrees to furnish technical and business information as reasonably required to satisfy the requirements of this Agreement only to the extent that each party is legally free to disclose such information. Notwithstanding the foregoing, each party may share such Confidential Information with its affiliates (including for the purpose of this Section 9.1, entities owning directly or indirectly fifty percent (50%) or more of its stock). This Article IX shall survive the termination of this Agreement.

9.2   Exceptions

Each party may disclose (subject to applicable Laws) Confidential Information of another party if (a) any such Confidential Information is or becomes generally available to the public other than as a result of disclosure by a party (or any of its affiliates) that does not own such Confidential Information, (b) any such Confidential Information (including any report, statement, testimony or other submission to a governmental authority) is required by applicable Laws, including but not limited to applicable securities laws and accounting regulations, after prior notice of such intention to disclose has been given to the disclosing party to the extent such notice is permitted by applicable Law, provided that no such notice is required if prohibited by applicable Law, (c) any such Confidential Information is reasonably necessary to be disclosed in connection with any dispute with respect to this Agreement (including in response to any summons, subpoena or other legal process or formal or informal investigative demand issued to the disclosing party in the course of any litigation, arbitration, mediation, investigation or administrative proceeding), (d) any such Confidential Information was or becomes available to a party on a non-confidential basis and from a source (other than a party to this Agreement or any affiliate or representative of such party) that is not bound by a confidentiality agreement with respect to such information or (e) any such Confidential Information is in such party's lawful possession as of the Closing Date or independently developed after the Closing Date without the aid, application or use of any information that is to be kept confidential under this Article IX as evidenced by a written record proving such independent development.

ARTICLE X

DISPUTE RESOLUTION

10.1   Disputes

If a dispute arises under this Agreement such dispute shall first be referred for resolution to the Operating Committee. If the Operating Committee is unable to resolve such matter within ten (10) days, the parties shall escalate such dispute to the senior officers of each party, as applicable, set forth in [*], as may be amended by each party from time to time (the "Senior Officers"), by providing written notice of the dispute specifying the nature of the dispute to the other party's (ies') Senior Officer. Upon the other party's (ies') Senior Officer's receipt of this notice, the applicable Senior Officers shall, within five (5) business days, enter into discussions concerning the dispute. If the dispute is not resolved as a result of such discussions within ten (10) days, such dispute shall be referred by the Senior Officers to non-binding mediation (with such mediator to be reasonably agreed by the parties to such dispute), or if the dispute is with respect to pricing related matters, final and binding arbitration. The expense of mediation and/or arbitration shall be borne equally between or among the parties to the dispute. Each party shall pay the fees and expenses of its own counsel.

10.2   Arbitration Procedures.

(a)   In the event that both Customers and Becancour LP are parties to a dispute and the interests of Becancour LP and BSI are adverse in such dispute, there shall be five (5) arbitrators, three (3) of whom shall be appointed individually by each party to the dispute and two (2) of whom shall be neutral arbitrators appointed by the American Arbitration Association ("AAA"), in each case in accordance with the last sentence of this Section 10.2(a). In the event there are only two parties to the dispute, or in the event that both Customers and Becancour LP are parties to the dispute but the interests of Becancour LP and BSI are not adverse in such dispute (in which case Becancour LP and BSI shall be treated as one party for purposes of this Section 10.2), there shall only be three (3) arbitrators, two (2) of whom shall be appointed individually by each party to the dispute and the two (2) appointed arbitrators shall choose a third arbitrator. Each party to a dispute shall choose an arbitrator within thirty (30) days of receipt by a party of the demand for arbitration. If any party fails to appoint an arbitrator within the time periods specified herein, such arbitrator shall, at any party's request, be appointed by the AAA, pursuant to a listing, ranking and striking procedure in accordance with the Commercial Arbitration Rules of the AAA ("AAA Rules"). Any arbitrator appointed by the AAA shall have no less than fifteen (15) years of experience with large, complex commercial cases, and shall be an experienced arbitrator.

(b)   The language of the arbitration shall be English. The place of arbitration shall be New York, New York.

(c)   In addition to the authority conferred on the arbitral tribunal by the AAA Rules, the arbitral tribunal shall have the authority to order such production of documents and such depositions of witnesses as may reasonably be requested by either party or by the arbitral tribunal itself.

(d)   The award rendered in any arbitration commenced hereunder shall be final and binding upon the applicable parties and judgment thereon may be entered in any court of competent jurisdiction.

(e)   By agreeing to arbitration, the applicable parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings and/or the enforcement of any award. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the applicable parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any applicable party to respect the arbitral tribunal's orders to that effect.

(f)   Any arbitration hereunder shall be confidential, and the applicable parties, and their agents and the arbitrators shall not disclose to any non-party the subject of the arbitration, any information about the arbitration or the substance of the proceedings thereunder except (i) as may be required by Law, (ii) as necessary to enforce this Agreement to arbitrate or any award hereunder or (iii) to a party's shareholders, provided that the disclosing party reasonably believes that such information is material to the disclosing party's business.

ARTICLE XI

WARRANTIES, INDEMNIFICATION AND LIMITATION OF LIABILITY

11.1   Representations and Warranties.

Each party represents and warrants that it has (a) all rights and authority required to enter into this Agreement and (b) taken all requisite corporate and other action to approve the execution, delivery and performance of this Agreement and it is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation.

11.2   Additional Warranties from Becancour LP

Becancour LP warrants to each Customer that (a) the Product delivered to or on behalf of such Customer shall be free from defects in materials, (b) the Product shall conform to all Specifications or otherwise does not contain defects in workmanship and (c) the Customers shall receive good and valid title to the Product delivered hereunder. Any breach by Becancour LP of the warranties in Section 11.2(a) or (b) shall be handled in accordance with Section 6.3. The warranties of Becancour LP pursuant to 11.2(a) and 11.2(b) herein shall be in effect for a period of 18 months from the date of delivery of Product to a Customer (or End-Customer), whether into storage or to the Customer's (or End-Customer's) site.

11.3   Disclaimer of Warranties

EXCEPT AS SPECIFIED ABOVE, THERE ARE NO EXPRESS WARRANTIES BY ANY PARTY. EACH PARTY EXPRESSLY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE OF THE PRODUCT SUPPLIED.

11.4   Indemnification

Becancour LP shall indemnify, defend and hold harmless each Customer, and its respective personnel, successors and assigns from any and all losses, liabilities, damages and claims, and all related costs and expenses (including reasonable legal fees and disbursements and costs and expenses of investigation and litigation, and costs of settlement, judgment, interest and penalties) ("Losses") and threatened Losses to the extent resulting from or arising out of any action, suit, proceedings, claim, demand, investigation or assessment made or brought by a third party ("Third Party Claims") arising from, relating to or based on a claim that the manufacture or delivery of the Product by Becancour LP infringes the intellectual property rights of a third party.

11.5   Indemnification Procedures

(a)   Notice

A Customer seeking indemnification under Section 11.4 shall give Becancour LP prompt notice of any Third Party Claim that may give rise to an indemnification obligation under Section 11.4, together with an estimated amount of such claim (if then estimable). Failure to give such notice shall not affect the indemnification obligations hereunder in the absence of actual and material prejudice and in such case, only to the extent of such prejudice.

(b)   Defense against Third Party Claims

Becancour LP shall have the right to assume the defense (at its expense) of any such claim through counsel of Becancour LP's choosing by so notifying the indemnified Customer within fifteen (15) business days of the first receipt by Becancour LP of such notice from the indemnified Customer; provided, however, that any such counsel shall be reasonably satisfactory to the indemnified Customer. In addition, if under applicable standards of professional conduct, a conflict between an indemnified Customer and Becancour LP exists in respect of such Third Party Claim, Becancour LP shall pay the reasonable fees and expenses of such additional counsel as may be required to be retained in order to resolve such conflict (but not more than one firm of counsel). If Becancour LP assumes such defense, the indemnified Customer shall have the right to participate in the defense thereof (at its own expense). If Becancour LP chooses to defend or prosecute any Third Party Claim, Becancour LP shall not settle or compromise any litigation with respect to such Third Party Claim without the consent of the indemnified Customer.

11.6   Limited Liability

Except with respect to (a) Third Party Claims that are the subject of indemnification pursuant to Section 11.4, (b) claims arising out of Becancour LP's gross negligence or willful misconduct, (c) personal injury, death or damage to tangible property caused by Becancour LP or its personnel, (d) fraudulent or criminal acts by Becancour LP or its personnel or (e) claims arising out of Becancour LP's breach of the confidentiality provisions herein, Becancour LP's liability and each Customer's exclusive remedy shall be limited to, at each Customer's option, as applicable, (x) replacement of non-conforming Product, (y) in the case of delayed shipments, expediting costs pursuant to Section 6.2 or (z) a refund of the Price of the non-conforming Product plus reimbursement of the incremental increase in the cost of purchasing Product from another source, provided that with respect to clause (z) such liability shall not exceed [*].

11.7   No Special Damages

NO PARTY SHALL HAVE ANY LIABILITY FOR ANY LOSS OF PROFITS, SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR INCIDENTAL DAMAGES ARISING OUT OF THIS AGREEMENT OR ANY CONDITION OR, WARRANTY, EXPRESS OR IMPLIED, OR ANY DEFECT IN THE PRODUCT DELIVERED.

ARTICLE XII

MISCELLANEOUS

12.1   Amendments; No Waivers

(a)   Any provision of this Agreement (including the Schedules and Exhibits hereto) may be amended or waived at any time if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by all of the parties hereto or, in the case of a waiver, by the party against whom the waiver is to be effective.

(b)   No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law.

12.2   Notices

All notices, requests and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be deemed to have been duly given upon receipt when delivered in person, by facsimile or email (receipt confirmed) or by overnight courier or registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified by like notice):

If to BSI, to
	Becancour Silicon Inc.
	c/o Timminco Limited
	Sun Life Financial Tower
	150 King Street West
	Suite 2401
	Toronto ON M5H 1J9
	Attention:	General Counsel and Corporate Secretary
	Fax:	(416) 364-3451
	E-mail:	pkalins@timminco.com
a copy (which shall not constitute notice) to:
	Stikeman Elliott LLP
	199 Bay Street
	Suite 5300
	Toronto, ON M5L 1B9
	Attention:	Jay Kellerman
	Fax:	(416) 947-0866
	E-mail:	jkellerman@stikeman.com
if to DCC to:
	Dow Corning Corporation
	2200 W. Salzburg Road
	Midland, MI 48686-0994
	Attention:	Sue K. McDonnell
		Senior Vice President, General Counsel & Secretary
	Fax:	989-496-1709
with a copy (which shall not constitute notice) to:
	Skadden, Arps, Slate, Meagher & Flom LLP
	Four Times Square
	New York, New York 10036
	Attention:	David J. Friedman
	Fax:	212-735-2000
	E-mail:	David.Friedman@skadden.com
if to Becancour LP, to:
	6500 Rue Yvon Trudeau
	Bécancour, QC G9H 2V8
	Attention:	President and CEO
	Fax:	(819) 294-9001
	E-mail:	rboisvert@silbec.com

12.3   Successors and Assigns

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement, provided further that a Customer may assign its rights hereunder (a) in accordance with the terms of the Limited Partnership Agreement, in connection with a transfer of an interest in the equity of Becancour LP and (b) without consent to an affiliate of such Customer. In the event that DCC transfers any of its rights hereunder to an affiliate, DCC shall irrevocably and unconditionally guarantee to BSI the punctual and full performance of all the obligations (including performance of payment or contribution) of such affiliate pursuant to this Agreement. To the extent such affiliate of DCC fails to make any payment or contribution pursuant to this Agreement, DCC will make such payment or contribution specifically in accordance with the applicable provisions of the Agreement, as if such payment were being made by such affiliate.

12.4   Governing Law.

(a)   This Agreement, including all matters of construction, validity and performance, shall be construed in accordance with and governed by the law of the Province of Quebec (without regard to principles of conflicts or choice of laws) as to all matters, including but not limited to, matters of validity, construction, effect, performance and remedies.

(b)   The application to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods is excluded.

12.5   Jurisdiction

Except as otherwise provided in this Agreement, any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in any federal or state court located in New York, New York, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 12.2 shall be deemed effective service of process on such party.

12.6   Waiver of Jury Trial

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

12.7   Counterparts; Effectiveness

This Agreement may be executed and delivered in one or more counterparts, included by facsimile, each of which together shall be deemed an original, but all of which together shall constitute one and the same instrument.

12.8   Entire Agreement

Subject to Section 10 of the Limited Partnership Agreement, this Agreement (including the Schedules and Exhibits hereto) constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes and cancels all prior agreements, negotiations, correspondence, undertakings, understandings and communications of the parties, oral and written, with respect to the subject matter hereof and thereof. For the avoidance of doubt, this Section 12.8 does not apply to that certain [*], which shall continue in full force and effect in accordance with its terms.

12.9   Third Party Beneficiaries

Nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any Person that is not a party hereto or thereto or a permitted successor or assign of such a party.

12.10   Severability

If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

12.11   Force Majeure

(a)   Without limiting Section 2.1, if (i) Becancour LP is wholly or partially prevented from, or delayed in, providing Product or performing any of its obligations hereunder or (ii) a Customer is wholly or partially prevented from receiving Product or performing any of its obligations hereunder, in either case by reason of events beyond the applicable party's reasonable control (including acts of God, fire, explosion, accident, floods, earthquakes, embargoes, epidemics, war, acts of terrorism, nuclear disasters, shortage of raw materials or available energy, or work stoppage) (each, a "Force Majeure Event"), then, the applicable party shall not be responsible for such failure to perform caused by such Force Majeure Event, and the time for performance will be extended for a period equal to the duration of the Force Majeure Event. Upon the occurrence of a Force Majeure Event, the affected party shall promptly give written notice to the other parties of the Force Majeure Event and of the expected duration of such Force Majeure Event.

(b)   In the event Becancour LP is wholly or partially prevented from, or delayed in, providing Product due to a Force Majeure Event, Becancour LP shall use commercially reasonable efforts to (i) avoid or remove the applicable Force Majeure Event, and (ii) resume normal production and delivery of Product with the least possible delay and the applicable Customer(s) shall not be charged for any undelivered Product.

(c)   In the event Becancour LP is only partially able to provide Product due to a Force Majeure Event, Becancour LP shall provide such Product to each Customer in accordance with the allocation of Customer Output Capacity set forth in Section 2.2.

(d)   In the event Becancour LP is unable to produce the amount of Product scheduled to be produced pursuant to the Production Plan due to a Force Majeure Event, and such shortfall cannot be made up by Becancour LP during the applicable calendar year, such shortfall shall be applied to each Customer in proportion to the allocation of Customer Output Capacity set forth in Section 2.2.

12.12   Construction; Interpretation

(a)   The article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement. As used in this Agreement, (i) unless otherwise specified herein, the term "affiliate," with respect to any Person, shall mean and include any Person controlling, controlled by or under common control with such Person, (ii) the term "including" shall mean "including, without limitation," (iii) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other genders as the context requires, (iv) the words "hereof," "herein," and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including the Schedules and Exhibits hereto) and not to any particular provision of this Agreement, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of this Agreement, unless otherwise specified, (v) the word "or" shall not be exclusive, and (vi) each of BSI, DCC and Becancour LP will be referred to herein individually as a "party" and collectively as "parties" (except where the context otherwise requires). Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning. A reference to any party to this Agreement or any other agreement or document shall include such party's successors and permitted assigns. Any payment required to be made by any party hereto pursuant to this Agreement shall be made without setoff in United States Dollars, unless otherwise specified.

(b)   The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

(c)   Any reference to any federal, state, local or non-United States statute or Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context otherwise requires.

[Signature page follows]

IN WITNESS WHEREOF, BSI, DCC and Becancour LP have caused this Agreement to be executed by their respective duly authorized officers as of the date first written above.

BÉCANCOUR SILICON INC.
By:	/s/ Peter A.M. Kalins
	Name:	Peter A.M. Kalins
	Title:	General Counsel & Corporate Secretary
DOW CORNING CORPORATION
By:	/s/ Robert D. Hansen
	Name:	Robert D. Hansen
	Title:	Executive Vice President
QUÉBEC SILICON LIMITED PARTNERSHIP
By:	/s/ Peter A.M. Kalins
	Name:	Peter A.M. Kalins
	Title:	General Counsel and Corporate Secretary

EX-10.2

EXHIBIT 10.2

SHAREHOLDERS AGREEMENT

BETWEEN

ALL THE

SHAREHOLDERS

OF

QUÉBEC SILICON GENERAL PARTNER INC.

October 1, 2010

TABLE OF CONTENTS

1.           DEFINITIONS2

2.           BUSINESS AND AFFAIRS OF THE COMPANY8

3.           THE SHAREHOLDERS8

4.           ISSUANCE OF SHARES9

5.           SECURITY INTERESTS10

6.           TRANSFER OF SHARES10

7.           MANAGEMENT OF THE COMPANY11

8.           RECORDS, REPORTS AND REPORTING15

9.           DEFAULT OF A SHAREHOLDER17

10.           CONFIDENTIALITY18

11.           INDEMNIFICATION20

12.           DISPUTE RESOLUTION20

13.           GENERAL23

SHAREHOLDERS AGREEMENT

THIS SHAREHOLDERS AGREEMENT dated October 1, 2010,

BY AND BETWEEN: BÉCANCOUR SILICON INC., a company governed by the laws of Québec;

(hereinafter called "BSI")

AND: DOW CORNING NETHERLANDS, B.V., a corporation governed by the laws of the Netherlands;

(hereinafter called "DCC GP Co")

AND: QUÉBEC SILICON GENERAL PARTNER INC., a company governed by the laws of Québec;

(hereinafter called the "Company")

WHEREAS the Company has been incorporated under the Act (as defined herein);

WHEREAS BSI and the Company formed as of August 18, 2010, a limited partnership, "Silicium Québec Société en commandite", in its French language version, and "Québec Silicon Limited Partnership", in its English language version (the "Partnership"), under the laws of the Province of Québec, to operate the Business (as defined in the Amended and Restated Limited Partnership Agreement) pursuant to the terms of a limited partnership agreement (the "Original Limited Partnership Agreement");

WHEREAS at the time that the Original Limited Partnership Agreement was entered into, BSI was the sole shareholder of the Company, holding 51 Class A Shares (as defined below);

WHEREAS the Company is the general partner of the Partnership;

WHEREAS on the date hereof, BSI, DCC LP Canco (as defined below), and the Company entered into an amended and restated limited partnership agreement (as amended from time to time, the "Amended and Restated Limited Partnership Agreement") to, inter alia, introduce DCC LP Canco as a special partner of the Partnership;

WHEREAS on the date hereof, DCC GP Co subscribed for 49 Class B Shares of the Company;

WHEREAS BSI and DCC GP Co are the owners of all the issued and outstanding shares in the capital of the Company as follows:

Name	Class and number of shares issued	Percentage of Voting Securities
BSI	51 Class A shares	51%
DCC GP Co	49 Class B Shares	49%

WHEREAS the percentage of units held in the Partnership by BSI and DCC LP Canco (excluding the 100 units held by the Company as general partner of the Partnership) is also 51% and 49%, respectively;

WHEREAS the Company, as general partner of the Partnership, is authorized and required under the Amended and Restated Limited Partnership Agreement to manage, control, administer and operate the Partnership and its business and affairs and to represent the Partnership in accordance with the Amended and Restated Limited Partnership Agreement;

WHEREAS BSI, DCC GP Co and the Company desire to enter into this shareholders agreement to provide for the conduct of the business and affairs of the Company, to provide for restrictions on the transfer and ownership of shares in the capital of the Company and to govern their relationship as shareholders;

NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter contained, the Parties hereby agree as follows:

1.   DEFINITIONS

1.1   In this Agreement, the following expressions shall have the following meanings, unless there is something in the context inconsistent therewith:

"Absolute Control" means:

(i)   in relation to a Person that is a corporation, the ownership, directly or indirectly, of voting securities of such Person carrying all of the voting rights attaching to all voting securities of such Person (other than Qualifying Shares, if any) and which are sufficient, if exercised, to elect the entirety of its board of directors; and

(ii)   in relation to a Person that is a partnership, limited partnership, mutual fund trust, trust or other similar unincorporated entity or association of any nature, the ownership, directly or indirectly, of voting securities of such Person (including the general partner thereof, as the case may be) carrying all of the voting rights attaching to all voting securities of such Person (including the general partner thereof, as the case may be) or the ownership of all of the other interests or rights entitling the holder thereof to exercise exclusive control and direction over the management and policies of such Person, as the case may be; and "Absolutely Controls" and "Absolutely Controlled" shall have similar meanings;

"Absolutely Controlled Affiliate" means, in relation to any Person, any other Person that is Absolutely Controlled by the first-mentioned Person;

"Act" means the Canada Business Corporations Act, as the same may be amended, supplemented or restated from time to time;

"Affiliate" means, in relation to any Person, any other Person that, directly or indirectly, (i) Absolutely Controls the first-mentioned Person, (ii) is an Absolutely Controlled Affiliate of the first-mentioned Person or (iii) is under common Absolute Control with the first-mentioned Person;

"Affiliated Person" means, in relation to any Person, any other Person that, directly or indirectly, Controls or is Controlled by or under common Control with the first-mentioned Person;

"Agreement" means this shareholders agreement, all schedules attached hereto and any agreement or schedule amending this Agreement; the words "hereto", "herein", "hereinabove", "hereinafter", "hereof", "hereby" and "hereunder" and similar expressions refer to this Agreement and not to any particular section, clause or part of it;

"Amended and Restated Limited Partnership Agreement" has the meaning ascribed thereto in the preamble;

"AMG" means Advanced Metallurgical Group N.V. or its Affiliated Persons;

"Annual Budget" has the meaning ascribed thereto in Section 7.8.4;

"applicable Law" has the meaning ascribed thereto in the definition of Laws;

"Board" means the board of directors of the Company;

"BSI" means Bécancour Silicon Inc.;

"BSI Parent" means Timminco Limited, a corporation organized under the laws of Canada;

"BSI Representatives" has the meaning ascribed thereto in Section 7.1;

"Business Day" means any day of the year, other than a Saturday, Sunday or other day on which banks are closed for business in Montreal, Québec or New York, New York;

"Class A Shares" means the class A shares in the capital of the Company;

"Class B Shares" means the class B shares in the capital of the Company;

"Company" has the meaning ascribed thereto in the preamble;

"Confidential Information" has the meaning ascribed thereto in Section 10.1;

"Control" means:

(i)   in relation to a Person that is a corporation, the ownership, directly or indirectly, of voting securities of such Person carrying more than 50% of the voting rights attaching to all voting securities of such Person (Qualifying Shares, if any, in the capital of such Person being deemed to be owned by the largest shareholder of such Person) or which are sufficient, if exercised, to elect the majority of its board of directors; and

(ii)   in relation to a Person that is a partnership, limited partnership, mutual fund trust, trust or other similar unincorporated entity or association of any nature, the ownership, directly or indirectly, of voting securities of such Person (including the general partner thereof, as the case may be) carrying more than 50% of the voting rights attaching to all voting securities of such Person (including the general partner thereof, as the case may be) or the ownership of more than 50% of other interests or rights entitling the holder thereof to exercise, control and direction over the management and policies of such Person, as the case may be; and "Controls", "Controlled" and "Controlling" shall have similar meanings; provided that Dow Chemical Company and Corning Incorporated each shall be deemed to be a Person in Control of DCC GP Co Parent so long as it owns at least 50% of the outstanding share capital of DCC GP Co Parent and AMG shall be deemed to be a Person in Control of BSI Parent so long as it owns at least 40% of the outstanding share capital of BSI Parent;

"Controlled Affiliated Person" means, in relation to any Person, any other Person that is Controlled by the first-mentioned Person;

"Corresponding Pro-Rata Share" means a percentage determined by dividing the number of Units Transferred by a Shareholder or an Affiliate, as a Special Partner, to a third party or any Affiliate thereof, by the total number of issued and outstanding Units held by such Shareholder or Affiliate at the time the calculation is made;

"DCC GP Co" has the meaning ascribed thereto in the preamble;

"DCC GP Co Parent" means Dow Corning Corporation;

"DCC GP Co Representatives" has the meaning ascribed thereto in Section 7.1;

"DCC LP Canco" means Dow Corning Canada, Inc., a corporation organized under the laws of Canada;

"Defaulting Partner" means a Special Partner in respect of which a Default, as defined in the Amended and Restated Limited Partnership Agreement, has occurred;

"Facility" means the silicon metal facility located at 6500 Rue Yvon Trudeau, Bécancour, Québec;

"Framework Agreement" means that certain Framework Agreement, dated as of August 10, 2010, by and among DCC GP Co Parent, BSI Parent and BSI, as the same may be amended from time to time;

"GAAP" means the accounting principles generally accepted in Canada from time to time, including the policies and standards of disclosure recommended by the Canadian Institute of Chartered Accountants from time to time, applied in a consistent manner from period to period;

"Governmental Authority" means any: (i) federal, provincial, regional, local, municipal, foreign, international, multinational, territorial, state or other government, governmental or public department, central bank, court, tribunal, arbitral body, statutory body, commission, board, bureau or agency, domestic or foreign; (ii) subdivision, agent, commission, board or authority of any of the foregoing; or (iii) quasi-governmental, private body or regulatory entity exercising any regulatory, expropriation or taxing authority under, or for the account of, any of the foregoing, including any stock exchange;

"IFRS" means International Financial Reporting Standards, as in effect from time to time;

"Including", "include" and words of similar import, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as "without limitation", or "but not limited to", or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter;

"Insolvent" means, with respect to the applicable Person on any date of determination, satisfying the definition of an "insolvent person" contained in Section 2 of the Bankruptcy and Insolvency Act (Canada), and "Insolvency" means the condition of being Insolvent;

"Laws" means all statutes, codes, treaties, directives, ordinances, decrees, rules, regulations, municipal by-laws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, terms and conditions of any grant, approval, permission, authority or license, rulings or awards, policies, voluntary restraints, guidelines, or any provisions of the foregoing, of any Governmental Authority or self-regulatory entity, in each case which have the force of law, including any interpretation thereof and any decision, doctrine or recommendations from any Governmental Authority or self-regulatory entity, in each case which have the force of law, and general principles of common and civil law and equity, in each case which have the force of law; and "Law" means any one of the foregoing, and the term "applicable," with respect to such Law and in the context that refers to one or more Persons, means that such Law applies to such Person or Persons or its or their business, undertaking, property, assets or securities and emanates from a Governmental Authority or self-regulatory entity having jurisdiction over the Person or Persons or its or their business, undertaking, property, assets or securities;

"Management" means the management of the Company, consisting of individuals either appointed by the Board or acting as officers pursuant to the Services Agreement;

"Non-Defaulting Partner" means any Special Partner which is not a Defaulting Partner;

"Operating Committee" has the meaning ascribed thereto in Section 7.9;

"Original Limited Partnership Agreement" has the meaning ascribed thereto in the preamble;

"Partnership" has the meaning ascribed thereto in the preamble;

"Partnership Interest" means the interest of a Partner in the Partnership consisting of: (i) such Partner's interest and share in profits, losses, reserves, holdbacks, allocations and distributions of the Partnership and its common stock (as referred to in the Civil Code); (ii) such Partner's capital account maintained on the books of the Partnership; (iii) such Partner's right to vote or grant or withhold consents or approvals with respect to Partnership matters (if any) as provided herein or in the Civil Code; and (iv) such Partner's other rights, obligations and privileges as provided herein or in the Civil Code, and includes Units;

"Party" means any of BSI, DCC GP Co or the Company and any other Person which may hereafter agree to be bound by the terms of this Agreement in accordance with the provisions hereof; and "Parties" means all of them;

"Person" means any individual, sole proprietorship, partnership, corporation or company, with or without share capital, trust, foundation, joint venture or any other incorporated or unincorporated entity or association of any nature;

"Qualifying Shares" means shares that a Person must hold to qualify as a director of the issuing corporation under applicable Law, or shares held by a Person or Persons (equal to no more than 1% of the issued and outstanding share capital of the issuing corporation) so that the issuing corporation has the minimum number of shareholders or members required under applicable Law;

"Representative" means a BSI Representative or a DCC GP Co Representative;

"Securities Act" means the Securities Act (Québec);

"Security Interest" means any mortgage, pledge, assignment by way of security, security granted under the Bank Act (Canada), hypothec (legal or conventional, immovable or movable, with or without delivery), pledge, security agreement, financing or any other security interest on any property and any and all similar arrangements, conditions or encumbrances on any property that in substance secure payment or performance of an obligation, including any and all similar arrangements, conditions or encumbrances on any property under any Law applicable to any Shareholder;

"Services Agreement" means the services agreement or agreements between the Partnership and BSI or Timminco, as the case may be, that sets forth the agreed personnel and other shared services to be provided to, or by, the Partnership;

"Shareholders" means BSI and DCC GP Co and any other holder of Shares from time to time which agrees to be bound by the terms of this Agreement in accordance with the provisions hereof; and "Shareholder" means any one of the Shareholders;

"Shares" means any shares in the share capital of the Company of any class;

"Special Majority of the Board" means a majority of the Board which includes at least one BSI Representative and one DCC GP Co Representative;

"Special Partner" means BSI and DCC LP Canco, for so long as they remain special partners of the Partnership, and any other Person which becomes and remains a special partner of the Partnership in accordance with the provisions of the Amended and Restated Limited Partnership Agreement; and "Special Partners" is the collective reference to all such parties;

"Special Pro-Rata Share" means, in relation to a Special Partner, a percentage determined by dividing the number of Units held by such Special Partner in the Partnership by the total number of issued and outstanding Units which are held by all Special Partners in the Partnership at the time the calculation is made, provided that the total of all Special Pro Rata Shares shall always be equal to 100%;

"Supply Agreement" means the agreement among the Partnership, BSI and DCC GP Co Parent (or their permitted designees) entered into on the date hereof, as the same may be amended from time to time, regarding the supply and allocation of silicon metal output from the Business (as defined in the Amended and Restated Limited Partnership Agreement);

"Transfer" means, in respect of a Partnership Interest or Shares, a transfer, sale, exchange, assignment, creation of a Security Interest or other encumbrance or disposition, including the grant of an option or other right, whether directly or indirectly through the transfer of equity interests of an Affiliate substantially all of whose assets are comprised of a Partnership Interest or GP Shares, whether voluntarily, involuntarily, by operation of law or pursuant to a merger, consolidation or similar business combination, of or in relation to such Partnership Interest and/or Shares; provided, that (i) a transfer of equity interests in BSI Parent shall not be deemed a Transfer (although may represent a Change of Control Event), (ii) a transfer of the equity interests of DCC GP Co Parent shall not be deemed a Transfer, (iii) a reorganization involving BSI and BSI Parent whereby BSI is merged or wound-up into BSI Parent shall not be deemed a Transfer and a reorganization of DCC GP Co and DCC GP Co Parent (or one of its Affiliates) whereby DCC GP Co is merged or wound-up into DCC GP Co Parent (or one of its Affiliates) shall not be deemed a Transfer and (iv) "Transferred", "transferred" "Transferor" and "Transferee" each have a correlative meaning. The foregoing notwithstanding, the grant of a Security Interest in a Partnership Interest or Shares to a financial institution in connection with any bona fide loan to a Shareholder or its Affiliates from such financial institution in which such financial institution does not have the power to vote or dispose of such Partnership Interest or Shares other than in case of a default caused by the action or inaction of such Shareholder, and, in such case, such financial institution holds the Partnership Interest or Shares subject to the terms and conditions of the Amended and Restated Limited Partnership Agreement or this Agreement (including, without limitation, subject to the provisions of Section 6 hereof), as applicable, and which Security Interest shall be automatically released upon a Special Partner's exercise of any call rights under Sections 10.7 and 16.5 (or any successor provisions) of the Amended and Restated Limited Partnership Agreement, shall not be deemed a Transfer;

"Ultimate Parent" means in respect of DCC GP Co, Dow Corning Corporation, and in respect of BSI, BSI Parent; and in respect of any other Person which shall become a Shareholder, the Person designated by such Shareholder as being its Ultimate Parent and accepted by all of the other Shareholders; and

"Units" means the units evidencing the Partnership Interest of a partner in the Partnership.

2.   BUSINESS AND AFFAIRS OF THE COMPANY

2.1   Purpose of the Company.  The Company was established for the purpose of acting as general partner of the Partnership. The business of the Company will be limited to fulfilling the obligations and carrying out the duties of the general partner under the Amended and Restated Limited Partnership Agreement, and in engaging in any activities directly or indirectly related thereto.

2.2   Head Office.  The head office of the Company shall be located at 6500 Rue Yvon Trudeau, Bécancour, Québec, or at such other location approved by the Board.

2.3   Fiscal Year.  The fiscal year of the Company will end on December 31 of each year, or at such other date approved by the Board.

3.   THE SHAREHOLDERS

3.1   Status and Capacity of the Shareholders and the Company. Each Shareholder hereby represents and warrants to and covenants with the Company and the other Shareholder, and the Company hereby represents and warrants to and covenants with the Shareholders (excluding the provisions of Section 3.1.8 as regards the Company), that:

3.1.1   Subsistence.  It is duly formed, constituted, created, incorporated, amalgamated or continued, as the case may be, and validly existing under the Laws of its jurisdiction of formation, constitution, creation, incorporation, amalgamation or continuation, and it has the capacity to own its assets and properties;

3.1.2   Capacity.  It has the capacity and authority to enter into and be bound by this Agreement;

3.1.3   Authorizations.  This Agreement has been duly authorized, executed and delivered by it;

3.1.4   No Conflict.  The signing, delivery and performance by it of this Agreement do not violate any of its articles, by-laws or other constating documents, or any agreements to which it is a party or any Law applicable to it, except for such violations which would not have a material adverse effect on the Company or the Shareholders;

3.1.5   Legally Binding.  This Agreement constitutes legal, valid and binding obligations of such Person, enforceable against it in accordance with its terms;

3.1.6   No Bankruptcy or Insolvency.  It is neither bankrupt nor Insolvent, and there are no proceedings pending or being contemplated by it, and/or to its knowledge, threatened against it, which would result in it being or becoming bankrupt or Insolvent;

3.1.7   Legal Proceedings.  There is not pending or, to its knowledge, threatened against it any legal proceedings that could have a material adverse effect on the Company or the Shareholders; and

3.1.8   Title to Shares.  Each Shareholder owns the Shares registered in its name free and clear of any Security Interest.

3.2   Each Shareholder hereby covenants and agrees that it shall not change its status under Section 3.1.6 as represented and warranted herein and, in addition to the Transfer restrictions set out in Section 6, shall not Transfer any of its Shares to any Person which would be unable to make the representations and warranties set forth in this Section 3.1.

4.   ISSUANCE OF SHARES

4.1   General Rule.  Unless otherwise agreed in writing between all Shareholders and except as provided in this Agreement, the Shareholders hereby agree that no Shares of the Company shall be issued from the Company's treasury unless issued pro-rata to the number of Shares held by each Shareholder and for a nominal price.

4.2   Number of Shares to be held by any Shareholder.  The Company shall take all necessary action, including issuing Shares for a nominal value and splitting Shares if necessary, in order to ensure that each Shareholder holds at any time a number of Shares corresponding to the Special Pro-Rata Share that it (or an Affiliate) holds as a Special Partner of the Partnership. Each Shareholder hereby constitutes and appoints the Company its true and lawful attorney, agent and mandatary, with full power and authority, in its name, place and stead, and for its use and benefit, to execute such instruments and documents as may be necessary to carry on the intent of this Section 4.1.

5.   SECURITY INTERESTS

5.1   Limitation on Security Interests.  Except with the prior written agreement of the other Shareholder, no Shareholder shall create or suffer to be created any Security Interest on any of its Shares or its rights under this Agreement, the Amended and Restated Limited Partnership Agreement or the Supply Agreement, if such granting would not constitute a permitted Transfer hereunder. Any purported Security Interest that is not in compliance with this Section 5.1 shall be void as between the Shareholders and the Company.

5.2   Security Interest by Operation of Law.  Section 5.1 shall not apply to any Security Interest on the Shares or the rights under this Agreement, the Amended and Restated Limited Partnership Agreement or the Supply Agreement arising from or imposed by any applicable Law which secures payment or performance of any obligations by any Shareholder and is contested in good faith by appropriate proceedings.

6.   TRANSFER OF SHARES

6.1   Prohibition on Transfer.  For a period of five years after the date hereof, no Shareholder shall Transfer all or any of its Shares except with the prior written agreement of the other Shareholder (which consent may be withheld for any or no reason), except as provided in Section 6.5. In addition, no Shareholder may at any time Transfer less than all of its Shares. All permitted Transfers (other than Transfers contemplated by Section 6.5) are subject to a corresponding Transfer of all of a Shareholder's (or, as applicable, its Affiliate's) Partnership Interest and, except as otherwise expressly provided, rights and obligations under the Supply Agreement.

6.2   No Violation of Applicable Laws.  Notwithstanding anything herein to the contrary, no Shareholder shall be entitled to Transfer any Shares at any time if such Transfer would violate applicable Laws.

6.3   Transfers in Violation of this Agreement.  Any purported Transfer by a Shareholder of all or any of its Shares other than in accordance with this Agreement (including, without limitation, a Transfer of Shares without a corresponding Transfer of all of a Shareholder's (or, as applicable, its Affiliate's) Partnership Interest and rights and obligations under the Supply Agreement) shall be null and void, and the Company shall refuse to recognize any such Transfer of such Shares for any purpose and shall not reflect in the Register any change in ownership of such Shares pursuant to any such Transfer. Any purported Transferee of a Transfer which is null and void pursuant to this Agreement shall have no rights as a Shareholder pursuant to this Agreement.

6.4   Transfer to a Third Party.  Notwithstanding any other provisions of this Agreement, upon the Transfer by a Shareholder or its Affiliate of all or any part of that Person's Partnership Interest to a third party in accordance with the provisions of Section 10 of the Amended and Restated Limited Partnership Agreement, the Shareholder shall concurrently Transfer its Corresponding Pro-Rata Share of the Shares they hold in the Company to such third party or to an Affiliate thereof, for a cash purchase price, and such Transferee shall be automatically bound by the provisions of this Agreement upon the occurrence of such Transfer. Furthermore, the right of first refusal under Section 10.4 (or any successor provisions) of the Amended and Restated Limited Partnership Agreement; tag-along rights under Section 10.5 (or any successor provisions) of the Amended and Restated Limited Partnership Agreement; put rights under Section 10.6 (or any successor provisions) of the Amended and Restated Limited Partnership Agreement; and call rights under Sections 10.7 and 16.5 (or any successor provisions) of the Amended and Restated Limited Partnership Agreement; shall apply, mutatis mutandis to the Transfer of Shares by Shareholders to third parties.  As a condition to any such Transfer, the Transferor shall enter into any such agreements reasonably requested to acknowledge such Transferee's obligations hereunder.

6.5   Transfer to Affiliates.  Notwithstanding anything herein to the contrary, a Shareholder may Transfer any Shares to an Affiliate of such Shareholder without triggering any rights under Section 6.4; provided that such Affiliate agrees to be bound to the terms of this Agreement as if it were the Transferor and executes a copy of this Agreement so providing.

6.6   Expenses.  Any Shareholder that proposes to Transfer any Shares in accordance with the terms and conditions hereof shall be responsible for any expenses incurred by the Company in connection with such Transfer.

7.   MANAGEMENT OF THE COMPANY

7.1   Board of Directors.  Unless the Shareholders by unanimous decision otherwise agree, there will be five (5) directors of the Company and, subject to Section 7.2, three (3) of such directors will be appointed by BSI (each director so appointed, a "BSI Representative") and two (2) of such directors will be appointed by DCC GP Co (each director so appointed, a "DCC GP Co Representative"). Subject to Section 7.8, an affirmative vote of a majority of directors or the written consent of all directors shall constitute Board action. The Board shall meet quarterly (unless otherwise requested to meet more frequently by any director) for the purpose of reviewing the operations and financial status of the Company and for receiving reports from Management and the Operating Committee regarding operational matters including the parameters of a budget, pricing of output and related production schedules under the Supply Agreement and any disputes between the parties to this Agreement, the Amended and Restated Limited Partnership Agreement and the Supply Agreement. Any committees or subcommittees of the Board may be formed and shall be comprised of an equal number of BSI Representatives and DCC GP Co Representatives, and shall have such power and authority as is delegated by the Board; provided that any action requiring a Special Majority of the Board may only be approved by the Board upon receipt of the required vote.

7.2   Modification to Number of Appointees.

7.2.1   The number of directors that DCC GP Co will be entitled to appoint to the Board will be increased from two (2) to three (3) and the number of directors that BSI will be entitled to appoint to the Board will be reduced from three (3) to two (2) upon the occurrence of any of the following events:

7.2.1.1   the foreclosure by any lender to BSI or any of its Affiliates regarding the Partnership Interest or Class A Shares of BSI or its Affiliates or their interests in the Supply Agreement;

7.2.1.2   BSI and its Affiliates fail to take at least twenty-five percent (25%) of the output of the Facility over a two-year period (unless and until BSI and its Affiliates acquire at least forty percent (40%) of the output for a subsequent two-year period of time); or

7.2.1.3   BSI fails to make a Mandatory Capital Contribution (as defined in the Amended and Restated Limited Partnership Agreement), unless DCC GP Co also fails to make its corresponding Mandatory Capital Contribution.

7.2.2   To the extent that any Shareholder fails to elect the required number of directors, the size of the board of directors shall be automatically adjusted to reflect such failure (but only for so long as such failure continues) and the provisions of Section 6 shall not be applicable for so long as such Shareholder has failed to elect any directors.

7.3   [Reserved].

7.4   Initial Representatives.  The initial BSI Representatives and DCC GP Co Representatives are set out at Schedule 7.4 hereto.

7.5   Replacement of Directors.  A Representative may be removed and replaced by his or her nominating Shareholder at any time by written notice to the other Shareholders. If a director should be or become unavailable to serve or otherwise fail to vote or act as a director to carry out the terms of this Agreement, then at the written request of any Shareholder, the Shareholder whose Representative has not acted will immediately designate by notice in writing to the other Shareholder an individual to serve as a replacement Representative to carry out the terms of this Agreement.

7.6   Executive Officers.  Subject to the Services Agreement, the directors will appoint one or more executive officers to manage or execute the business of the Company consistent with Section 2.1. The officers may include a president, a vice president, a controller/treasurer, a secretary and such other officers as the Board may determine. Notwithstanding the Services Agreement, DCC GP Co will have the right, but not the obligation, to appoint, from time to time, the Company's chief financial officer or a senior financial officer.

7.7   Officers to Manage.  Unless otherwise provided in this Agreement, the conduct of the business of the Company will be governed in accordance with the articles of the Company and managed by Management under the direction of the Board. The Board shall monitor the affairs of the Company and provide ongoing direction to Management as required.

7.8   Significant Corporate Action.  The following actions of the Company may only be taken after obtaining the approval of a Special Majority of the Board:

7.8.1   Termination, Liquidation or Dissolution.  Except as otherwise provided in this Agreement, any action or steps to terminate, dissolve, wind-up or liquidate the Company or the Partnership, including the filing of any petition under the applicable bankruptcy or insolvency laws;

7.8.2   Acquisitions.  Any action or steps to have the Company or the Partnership acquire (by merger, consolidation, or acquisition of equity or assets) any corporation, partnership or other business organization or division thereof;

7.8.3   Formation of Subsidiaries.  The formation of any subsidiary by the Company;

7.8.4   Annual Budgets.  The approval or material modification of the annual operating and capital budget of the Partnership and of the Company (the "Annual Budget");

7.8.5   Cash Calls.  The adoption or modification of any cash-call forecast of the Partnership and the effecting of any cash calls by the Partnership, other than as contemplated in the Annual Budget or the provisions of the Amended and Restated Limited Partnership Agreement;

7.8.6   Intellectual Property.  The sale, disposition, license, transfer or encumbrance by the Partnership of any material intellectual property;

7.8.7   Change to Partnership's Operations.  A change to the Partnership's operations that would materially adversely affect the overall output or production levels of the products contemplated by the Supply Agreement (without the consent of the relevant third parties to the various output agreements);

7.8.8   Acquisition or Sale of Assets.  The acquisition, sale, lease or disposition of any material assets by the Company or the Partnership which, individually or in the aggregate, have a value of over $500,000, individually, or $2,000,000 in the aggregate in any twelve-month period, except (i) as contemplated in the Annual Budget, or (ii) for acquisitions, sales, leases or dispositions in the ordinary course of business;

7.8.9   Indebtedness.  Any borrowing of money by the Partnership or by the Company or the issuing of promissory notes, evidences of indebtedness or other negotiable or non-negotiable instruments by the Partnership or the Company (except for working capital borrowings in the ordinary course of business) and, in each case, the aggregate consideration therefor exceeding $500,000, other than as contemplated in the Annual Budget (if pursuant to a facility or facilities then in effect);

7.8.10   Contractual Obligations.  The entering into of any agreement by the Company or the Partnership (other than purchase orders in the ordinary course of business) with annual payment obligations expected to exceed $500,000 or which has a duration of three years or more and under which payments are expected to exceed $1,500,000 in the aggregate or the entering into by the Company or the Partnership of any power supply agreement or collective bargaining agreement, other than as contemplated in the Annual Budget;

7.8.11   Guarantees, Loans.  The assumption, guarantee or endorsement of the obligations of any other Person by the Company or the Partnership, or the making by the Company or the Partnership of any loans, advances or capital contributions, or investments in, any other Person, other than short-term investments of cash on hand in the ordinary course of business;

7.8.12   Dividends and Distributions.  The declaration, setting aside or payment of any dividend or other distribution to equity-holders by the Company or the Partnership, irrespective of the form of such dividend or distribution, other than certain special distributions expressly permitted by the Amended and Restated Limited Partnership Agreement, distributions for the payment of taxes in accordance with the Amended and Restated Limited Partnership Agreement or otherwise pursuant to dividend or distribution policies agreed to by the Shareholders from time to time;

7.8.13   Settlement of Debt.  The repurchase or redemption by the Company or the Partnership of any security or debt (except to the extent such debt is due according to its terms) other than the Note (as defined in the Amended and Restated Limited Partnership Agreement);

7.8.14   Issuance of Securities.  The issuance or sale by the Company or the Partnership of any security, the registration of any security under the Securities Act or the grant of registration rights with respect to any security;

7.8.15   Related Party Transactions.  The entrance into by the Company or the Partnership of any transaction or series of related transactions with a value greater than $500,000 with any Shareholder or partner of the Partnership or any of their Affiliates (other than pursuant to an existing agreement contemplated by the Framework Agreement to remain in effect following the Closing thereunder or any Ancillary Agreement) or any amendment of an existing agreement;

7.8.16   Guarantee by the Partnership.  The entrance into any agreements where the Company or the Partnership is, directly or indirectly, assuming responsibility for the performance of any obligation of its partners or Shareholders or any of their Affiliates, as applicable;

7.8.17   Amendment to Organizational Documents.  The amendment of any provision of the Company's organizational documents;

7.8.18   Litigation.  The settlement of any litigation to which the Company or the Partnership is a party for an amount in excess of $750,000 or on terms which may reasonably have a material adverse effect on the Partnership's ability to perform its obligations under the Supply Agreement;

7.8.19   Accounting. Any material change in accounting or tax practices of the Company or the Partnership, except as may be required by applicable Law or in connection with the conversion to IFRS as of January 1, 2011;

7.8.20   Auditors.  Any change in the auditors of the Company or the Partnership; and

7.8.21   Compensation.  Any material increase in the compensation or benefits of any officer of the Company.

7.9   Operating Committee. Each of BSI and DCC GP Co shall appoint three (3) members of their respective senior management teams to an executive operating committee (the "Operating Committee").  The Operating Committee shall meet not more often than once a quarter (unless requested to meet more frequently by any Representative) and shall be generally responsible for receiving reports upon and discussing operational matters between the parties, including, without limitation, the parameters of a budget, pricing of output and related production schedules, and disputes or differences between the Shareholders under this Agreement, the Amended and Restated Limited Partnership Agreement, the Supply Agreement or any of the other Ancillary Agreements (as defined in the Framework Agreement).  The Operating Committee, which shall not have any power or authority to bind the Company, shall report the results of its discussions to the Board, and shall endeavour in good faith to provide a consensus view on issues.  The manager of the Facility shall be an ex-officio member of the Operating Committee.  The Operating Committee is a working committee of the Company whose members need not be Representatives.  The initial Operating Committee members are set forth on Schedule 7.9 hereto.

8.   RECORDS, REPORTS AND REPORTING

8.1   Records and Books of Account.  The Company shall keep at the principal office of the Company appropriate books and records with respect to the Company's business. Any books and records maintained by the Company in the regular course of its business, including books of account and records of the Company proceedings, may be kept on, or be in the form of, computer disks, hard disks, magnetic tape or any other information storage device, provided that the books and records so maintained are convertible in to clearly legible written form within a reasonable period of time. The books of the Company shall be maintained, for financial reporting purposes, on an accrual basis in accordance with GAAP up to and including December 31, 2010, and with IFRS thereafter. The Shareholders shall have access to, and may take copies from, all such books and records at all reasonable times during regular business hours.

8.2   Reports.

8.2.1   Annual Financial Statements.  As soon as practicable, but in no event later than twenty (20) days after the end of each fiscal year, the Company shall cause to be delivered to each holder of a Share, a financial report and unaudited financial statements (with notes attached thereto) of the Company for such fiscal year, presented in accordance with GAAP up to and including December 31, 2010, and with IFRS thereafter, including a balance sheet and statements of operations. The financial statements (with the notes attached thereto) shall be audited and reported upon by the auditor of the Company and certified by one or more officers or directors of the Company, in accordance with applicable Laws, no later than twenty (20) Business Days after the end of each such fiscal year and shall be sent to each holder of a Share no later than forty-five (45) days after the end of such fiscal year.

8.2.2   Quarterly Financial Statements.  As soon as practicable, but in no event later than twenty (20) days after the end of each calendar quarter, the Company shall cause to be delivered to each holder of a Share, a financial report and unaudited financial statements of the Company for such calendar quarter, presented in accordance with GAAP up to and including December 31, 2010, and with IFRS thereafter, including a balance sheet and statements of operations, such statements to be approved or certified by the directors or one or more officers of the Company, in accordance with applicable Laws and such other information as the Company determines to be necessary or appropriate.

8.2.3   Other Information. In the event that any Shareholder requires any of the foregoing reports or statements presented in a manner other than as described above, the Company shall use its reasonable best efforts to satisfy such needs, and such Shareholder shall reimburse the Company for any additional costs incurred by the Company on its behalf.

8.3   Accounting Policies.  Subject to Sections 7.8 and 8.4, the Company is authorized to establish from time to time accounting policies with respect to the financial statements of the Company and to change from time to time any policy that has been so established so long as such policies are consistent with GAAP up to and including December 31, 2010, and with IFRS thereafter.

8.4   Auditor.  The Company shall cause the auditor of the Company to review and report to the Shareholders upon the financial statements of the Company for and as at the end of each fiscal year, and to advise upon and make determinations with regard to financial questions relating to the Company or required by this Agreement to be determined by the auditor of the Company. Until its successor is appointed, the auditor of the Company shall be Ernst & Young LLP. The Shareholders hereby agree that any successor auditor of the Company shall be selected among the four (4) largest auditors in Canada.

8.5   Audit.  The Shareholders (either directly or indirectly through an auditor or legal counsel) shall have the right, at all reasonable times, to audit the books, the registers and records of the Company and to discuss its affairs with officers of the Company. In furtherance of the foregoing, the Shareholders (either directly or indirectly through an auditor or legal counsel) shall have the right to audit any transactions between the Company, on the one hand, and any Shareholder (or Affiliate thereof), on the other.

9.   DEFAULT OF A SHAREHOLDER

9.1   Defaulting Partner.  Upon a Shareholder (or its Affiliate) becoming a Defaulting Partner under the Amended and Restated Limited Partnership Agreement, such Shareholder: (i) shall cease to nominate Representatives to the Board in accordance with Section 7.1 and each director designated by such Shareholder then in place shall be deemed to have resigned from office; and (ii) shall not exercise voting rights attaching to the Shares, and its Shares shall be disregarded for the purposes of any such vote. The Company shall release and discharge each such director who is deemed to have resigned from any and all claims, debts, liabilities, rights of action and other obligations and demands whatsoever past, present or future, known or unknown, that the Company had or may then or thereafter have against any or all of them for or by reason of their being a director of the Company, as the case may be, other than in respect of fraud, wilful misconduct and criminal acts.

9.2   Purchase of a Defaulting Special Partner.  If a Shareholder (or its Affiliate) becomes a Defaulting Partner under the Amended and Restated Limited Partnership Agreement and the other Shareholder (as Non-Defaulting Partner under the Amended and Restated Limited Partnership) or any Affiliate thereof elects to purchase the Partnership Interest of the Defaulting Partner in accordance with the provisions of Section 16.5 of the Amended and Restated Limited Partnership Agreement, the Shareholder which is (or which is the Affiliate of) the Defaulting Partner shall, concurrently and in the same proportions, Transfer all Shares they hold in the share capital of the Company to the Shareholder which is (or which is an Affiliates of) the non-Defaulting Partners, for a cash purchase price equal to the amount appearing in the stated capital account of the Company for such Transferred Shares.

The acquisition of the Shares of a Shareholder which is (or which is an Affiliate of) a Defaulting Partner shall not release such Shareholder from any of its obligations under this Agreement, to the extent that such obligations existed prior to or arose from anything done or omitted to be done prior to the time of purchase of such Shares pursuant hereto.

9.3   Default of a Shareholder.  For the purposes of the provisions of Section 16.1(j) of the Amended and Restated Limited Partnership Agreement, a default shall be deemed to have occurred in respect of a Shareholder, if:

9.3.1   an order, judgment or decree, is voluntarily obtained by a Shareholder or an effective resolution is passed by such Shareholder pursuant to the Laws of any applicable jurisdiction, for the winding-up, liquidation or dissolution of such Shareholder; or

9.3.2   a Shareholder makes an assignment for the benefit of its creditors, is deemed to have made an assignment for the benefit of its creditors, files an assignment in bankruptcy, or files a proposal or a notice of intention to file a proposal under the Bankruptcy and Insolvency Act (Canada) or any successor legislation or any similar legislation of any applicable jurisdiction, or applies for an order under the Companies' Creditors Arrangement Act (Canada) or any similar legislation of any applicable jurisdiction; or

9.3.3   an order, judgment or decree is entered or obtained adjudging a Shareholder a bankrupt, or granting a motion seeking the liquidation, winding-up, dissolution, reorganization, arrangement, adjustment or composition of a Shareholder under the Companies' Creditors Arrangement Act (Canada), the Bankruptcy and Insolvency Act (Canada), or the Winding Up and Restructuring Act (Canada) or any successor legislation or any similar legislation of any applicable jurisdiction; or

9.3.4   proceedings are begun by a third party (i) for the appointment of a liquidator, trustee in bankruptcy, custodian, sequestrator, receiver, receiver and manager or any other Person with similar powers for a Special Partner or all or substantially all of a Shareholder's assets or properties, or (ii) to have an order for relief entered against such Shareholder as debtor or to adjudicate it bankrupt or seeking the liquidation, winding-up, dissolution, reorganization, arrangement, adjustment or composition under the Companies' Creditors Arrangement Act (Canada), the Bankruptcy and Insolvency Act (Canada) or the Winding-up and Restructuring Act (Canada) or any successor legislation or any similar legislation of any applicable jurisdiction, unless the Shareholder is, within ten (10) days and in good faith, disputing such proceedings and in any event such proceedings are dismissed or withdrawn within ninety (90) days after the commencement thereof; or

9.3.5   a Shareholder applies for or consents to, approves or accepts the appointment of a liquidator, trustee in bankruptcy, custodian, sequestrator, receiver, receiver and manager or any other Person with similar powers for itself or all or substantially all of its assets or properties; or

9.3.6   a seizure or execution or any similar process, other than pursuant to a Security Interest, whether or not permitted, contemplated or acknowledged under this Agreement, is levied or enforced upon or against the Shares of such Shareholder and the same remains unsatisfied for the shorter of a period of ninety (90) days or such period as would permit the same to be sold, unless the Shareholder is, within ten (days) and in good faith, disputing such process; or

9.3.7   any Shares are Transferred (including, for greater certainty, the granting of a Security Interest), except in compliance with the provisions of this Agreement; or

9.3.8   if any Shareholder's Absolutely Controlled Affiliate, the Ultimate Parent of a Shareholder or any Absolutely Controlled Affiliate thereof would be in default under the provisions of Sections 9.3.1 through 9.3.7 assuming it were a party hereto, mutatis mutandis.

10.   CONFIDENTIALITY

10.1   Confidentiality.  Each Shareholder hereby agrees that it shall use Confidential Information only for the purposes of fulfilling its obligations hereunder and that it shall not, except as required by applicable Law in the opinion of such Shareholder's counsel, directly or indirectly, disclose, divulge, reveal, report, publish, transfer or use any Confidential Information for any other purpose whatsoever; provided that this shall not prevent a Shareholder from disclosing Confidential Information to its Affiliated Persons, advisors, accountants, attorneys and, subject to the provisions of Section 5, bona fide lenders, provided that in any such case the Person to whom Confidential Information is disclosed is advised of the proprietary nature of the Confidential Information and the restrictions contained in this Section 10.1, and the disclosing Shareholder shall be responsible for any breach of this Section 10.1 by such Person. For the purposes of this Agreement, the term "Confidential Information" shall mean all data or information whatsoever concerning the Partnership, the Company, and their respective Affiliated Persons, Controlled Affiliated Persons and their respective businesses, which is non-public, confidential or proprietary in nature in whatever form or manner provided, whether or not reduced to writing, whether tangible or intangible, together with analyses, compilations, forecasts, studies or other documents or records that contain or are based on such information or data prepared by the Partnership, a partner of the Partnership, the Company, a Shareholder or any other Person at the Partnership's, the partner of the Partnership, the Company's or the Shareholder's request, disclosed by one Person to another, including (i) financial statements and other financial and operating information, (ii) processes, intellectual property, methods, techniques and arrangements relating to such businesses and activities and the manner in which the Partnership, the partner of the Partnership, the Company, the Shareholders and their Controlled Affiliated Persons do business, (iii) any other materials or information that is not generally known to others engaged in similar businesses or activities, and (iv) all information that contains, is derived from or relates to any of the above enumerated materials and information. Notwithstanding the foregoing, each Shareholder may disclose (subject to applicable Laws) Confidential Information if (a) any such Confidential Information is or becomes generally available to the public other than as a result of disclosure by a Shareholder (or any of its Affiliated Persons) that does not own such Confidential Information, (b) any such Confidential Information (including any report, statement, testimony or other submission to a governmental authority) is required to be disclosed by applicable Laws, including but not limited to applicable securities laws, applicable tax laws and accounting regulations, after prior notice has been given to the other Shareholder to the extent such notice is permitted by applicable Law, provided that no such notice is required if prohibited by applicable Law, (c) any such Confidential Information is reasonably necessary to be disclosed in connection with any dispute with respect to this Agreement or the Amended and Restated Limited Partnership Agreement (including in response to any summons, subpoena or other legal process or formal or informal investigative demand issued to the disclosing Shareholder in the course of any litigation, arbitration, mediation, investigation or administrative proceeding), (d) any such Confidential Information was or becomes available to a Shareholder on a non-confidential basis and from a source (other than the other Shareholder or any Affiliated Person or representative of such Shareholder) that is not bound by a confidentiality agreement with respect to such information or (e) any such Confidential Information that was previously or is after the date hereof independently developed without the aid, application or use of any information that is to be kept confidential under this Section 10 is evidenced by a written record proving such independent development.  For the purposes of this Section 10, "Affiliated Persons" shall include, with respect to DCC GP Co, Dow Chemical Company and Corning Incorporated and, with respect to BSI, AMG.  The provisions of this Section 10.1 shall not otherwise affect any rights granted pursuant to any other agreement.

11.   INDEMNIFICATION

11.1   General Indemnity.  Subject to the limitations contained in the Act, the Company shall indemnify each director and officer of the Company, each former director and officer of the Company and each individual who acts or acted at the Company's request as a director or officer of a body corporate of which the Company is or was a shareholder or creditor (or an individual who undertakes or has undertaken any liability on behalf of the Company or any such body corporate) and his or her heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him or her in respect of any civil, criminal or administrative action or proceeding to which he or she is made a party by reason of being or having been a director or officer of the Company or such body corporate, if: (i) he or she acted honestly and in good faith; and (ii) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he or she had reasonable grounds for believing that his or her conduct was lawful.

For greater certainty, any indemnity paid by the Company under this Section 11.1 shall not include the fees and expenses of legal counsels other than these of the legal counsel retained by the Company to defend the claim against all such Persons.

11.2   Advance by the Company.  To the fullest extent permitted by law, expenses (including legal fees and expenses other than these mentioned in the second paragraph of Section 11.1) incurred by an indemnitee in defending any claim, demand, action, suit or proceeding shall, in the circumstances of any claim, demand, action, suit or proceeding made against all directors and officers of the Company (including, where the context so requires or permits, former director(s) and officer(s) of the Company and an individual who acts or acted at the Company's request as a director or officer of a body corporate of which the Company is or was a shareholder or creditor (or an individual who undertakes or has undertaken any liability on behalf of the Company)) and his or her heirs and legal representatives, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the indemnitee to repay such amount if it shall be determined that the indemnitee is not entitled to be indemnified as authorized in Section 11.1.

12.   DISPUTE RESOLUTION

12.1   Amicable Resolution.  The Shareholders mutually desire that friendly collaboration will continue among them with respect to the relationship created by this Agreement and the Amended and Restated Limited Partnership Agreement.  Accordingly, they will try, and they will cause their respective Affiliates to try, to resolve in an amicable manner all disagreements and misunderstandings connected with their respective rights and obligations under this Agreement and the Amended and Restated Limited Partnership Agreement, including any amendments hereto and thereto.  In furtherance thereof, in the event of any dispute or disagreement between the Shareholders or their affiliates, as to the interpretation of any provision of this Agreement or the Amended and Restated Limited Partnership Agreement or any other agreements related hereto or thereto or arising out of the transactions contemplated hereby or thereby, or the performance of obligations hereunder or thereunder, including for the purposes of an inability to obtain a Special Majority of the Board when required, other than disputes with respect to any determination of book value, fair market value or Valuation Price pursuant to the Amended and Restated Limited Partnership Agreement, which shall be resolved in the manner set forth in Section 21.4 thereof (each a "Dispute"), then unless otherwise expressly provided in such other agreement related hereto (it being understood that Disputes under the Supply Agreement and the Framework Agreement shall be resolved in accordance with the terms thereof), upon written request of either party, the matter will be referred for resolution to the Operating Committee.  The Operating Committee will make a good faith effort to promptly resolve all Disputes referred to it.  Operating Committee decisions will be unanimous and will be binding on the Company.  If the Operating Committee does not agree to a resolution of a Dispute within thirty (30) days after the reference of the matter to it, the Dispute will be referred to a senior officer of each Shareholder (as so designated by each Shareholder).  If the specified senior officers of the Shareholders do not agree to a resolution of the Dispute within thirty (30) days after the reference of the matter to them, then the parties will be free to exercise the remedies available to them under applicable Law, subject to Sections 12.2 and 12.3.

12.2   Mediation.  In the event any Dispute (other than a Dispute relating to Section 7.8) cannot be resolved in an amicable manner as set forth in Section 112.1, the Shareholders intend that such Dispute be resolved by mediation.  If the Operating Committee and the applicable senior officers of each Shareholder are unable to resolve the Dispute as contemplated by Section 12.1, any of the Shareholders may demand mediation of the Dispute by written notice to the other in which case the parties will select a mediator within ten (10) days after the demand.  The mediator shall be a single qualified mediator experienced in the matters at issue, such mediator to be mutually agreed upon by the Shareholders.  Neither party may unreasonably withhold consent to the selection of the mediator.  Each Shareholder will bear its own costs of mediation but both parties will share the costs of the mediator equally.

12.3   Arbitration.

12.3.1   In the event that the Dispute is not resolved in accordance with Section 12.1 or 12.2, either party involved in the Dispute may submit the Dispute to binding arbitration pursuant to this Section 12.3; provided that no Dispute arising out of the failure to obtain a Special Majority of the Board pursuant to Section 7.8 shall be eligible for or submitted to binding arbitration pursuant to this Section 12.3.  All Disputes submitted to arbitration pursuant to this Section 12.3 shall be resolved in accordance with the Commercial Arbitration Rules (the "Rules") of the American Arbitration Association (the "AAA").  All cost and expenses incurred by the arbitrators shall be shared equally by the applicable parties and each party shall bear its own costs and expenses in connection with any such arbitration proceeding.

12.3.2   In any Dispute submitted to binding arbitration pursuant to this Section 12.3, there shall be three (3) arbitrators: (i) one (1) appointed by BSI, (ii) one (1) appointed by DCC GP Co and (iii) one (1) appointed by the two (2) arbitrators appointed by the Shareholders.  Each party to a Dispute shall choose an arbitrator within thirty (30) days of receipt by a party of the demand for arbitration.  If any party fails to appoint an arbitrator within the time periods specified herein or if the two arbitrators appointed by the Shareholders are unable to agree upon a third, such arbitrator shall, at any party's request, be appointed by the AAA, pursuant to a listing, ranking and striking procedure in accordance with the Rules.  Any arbitrator appointed by the AAA shall have no less than fifteen (15) years of experience with large, complex commercial cases, and shall be an experienced arbitrator.

12.3.3   The language of the arbitration shall be English.  The place of arbitration shall be New York, New York.  Except as set forth in this Section 12, the parties agree that arbitration shall be their exclusive remedy with respect to Disputes.  In addition to the authority conferred on the arbitral tribunal by the Rules, the arbitral tribunal shall have the authority to order such production of documents and such depositions of witnesses as may reasonably be requested by either party or by the arbitral tribunal itself.  The award rendered in any arbitration commenced hereunder shall be final and binding upon the applicable parties and judgment thereon may be entered in any court of competent jurisdiction.  By agreeing to arbitration, the parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings and/or the enforcement of any award.  Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the applicable parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any applicable party to respect the arbitral tribunal's orders to that effect.  Any arbitration hereunder shall be confidential and all information about the arbitration or the substance of the proceedings thereunder shall be treated as Confidential Information pursuant to Section 10 hereof.

12.4   Non-Exclusive Remedy.  The Shareholders acknowledge and agree that money damages would not necessarily be a sufficient remedy for any breach of this Agreement or the Amended and Restated Limited Partnership Agreement by the Shareholders or any of their affiliates.  Accordingly, nothing in this Agreement will prevent the Shareholders from seeking injunctive or similar relief in the event: (i) any delay resulting from efforts to resolve such Dispute pursuant to Section 12.2 and Section 12.3 could result in serious and irreparable injury to either party; or (ii) of any actual or threatened breach of any provisions of this Agreement or the Amended and Restated Limited Partnership Agreement.  All actions for such injunctive or interim relief shall be brought in a court of competent jurisdiction in accordance with this Agreement.  Such remedy shall not be deemed to be the exclusive remedy for breach of this Agreement or the Amended and Restated Limited Partnership Agreement.

12.5   Enforcement by Shareholders.  Notwithstanding anything to the contrary in this Agreement, the Amended or Restated Limited Partnership Agreement or the Supply Agreement, each Shareholder shall have the right, but not the obligation, to enforce this Agreement, the Amended or Restated Limited Partnership Agreement and the Supply Agreement on behalf of the Company with respect to the obligations of the other Shareholder and its affiliates hereunder and thereunder.

13.   GENERAL

13.1   Conflicts.  Should any provision of this Agreement conflict with any article or any by-law of the Company, the provisions of this Agreement shall prevail. The Parties agree to be bound by the terms of the Amended and Restated Limited Partnership Agreement that shall relate to them as shareholders of the Company.

13.2   No Waiver.  No consent or waiver, expressed or implied, by any Party of any breach or default by any Party in the performance of its obligations hereunder shall be deemed or construed to be a consent to or waiver of any other breach or default in the performance by such other Party of the same or any other obligations of such Party. Failure on the part of any Party to complain of any act or failure to act of any other Party or to declare the other Party in default, irrespective of how long such failure continues, shall not constitute a waiver by the first mentioned Party of its rights hereunder.

13.3   Notices.  Any notice, request, demand or other communication given or made pursuant to this Agreement shall be in writing and delivered to the addresses below, and shall be deemed to have been duly given or made as follows: (i) if sent by registered or certified mail, postage and fees prepaid, on the fifth (5th) Business Day after same was deposited with the post office; (ii) if sent by reputable overnight courier, when delivered; (iii) if sent by facsimile transmission or by any other written form of electronic communication, return receipt requested, the Business Day next following receipt; or (iv) if otherwise actually personally delivered, when delivered.  Any Party may change its address for service from time to time by notice given to the other Parties in accordance with the above.

if to BSI, to:

Bécancour Silicon Inc.

c/o Timminco Limited

Sun Life Financial Tower

150 King Street West

Suite 2401

Toronto ON M5H 1J9

Attention:                      General Counsel and Corporate Secretary

Fax:                      (416) 364-3451

E-mail:                      pkalins@timminco.com

a copy (which shall not constitute notice) to:

Stikeman Elliott LLP

5300 Commerce Court West

199 Bay Street

Toronto, ON M5L 1B9

Attention:                      Jay C. Kellerman

Fax:                      (416) 947-0866

E-mail:                      jkellerman@stikeman.com

if to DCC GP Co, to:

c/o Dow Corning Corporation

2200 W. Salzburg Road

Midland, Michigan 48686-0994

Attention:                      Sue K. McDonnell

Senior Vice President, General Counsel & Secretary

Fax:                      (989) 496-8307

E-mail:                      sue.mcdonnell@dowcorning.com

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York  10036

Attention:                      David J. Friedman

Fax:                      212-735-2000

E-mail:                      David.Friedman@skadden.com

if to GP, to:

Québec Silicon General Partner Inc.

c/o Bécancour Silicon Inc.

c/o Timminco Limited

Sun Life Financial Tower

150 King Street West

Suite 2401

Toronto ON M5H 1J9

Attention:                      General Counsel and Corporate Secretary

Fax:                      (416) 364-3451

E-mail:                                pkalins@timminco.com

with a copy (which shall not constitute notice) to DCC GP Co together with a copy to the legal advisor of DCC GP Co and the legal advisor of BSI.

13.4   Preamble.  The preamble forms an integral part of this Agreement.

13.5   Entire Agreement.  The Parties agree that this Agreement and the Amended and Restated Limited Partnership Agreement constitute the complete and exclusive statement of the agreements between them with respect to their relationship as Shareholders in the Company. This Agreement supersedes all prior negotiations, agreements and communications, written or oral between the Shareholders, including their Affiliates, with respect to their relationship as shareholders in the Company.

13.6   Sections and Headings.  The division of this Agreement into articles and sections and the insertion of headings in this Agreement are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

13.7   Amendment.  No amendments, changes or modifications to this Agreement shall be valid except if the same are in writing and signed by a duly authorized representative of each of the Parties.

13.8   Severability.  If any of the provisions contained in this Agreement are found by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, the validity, legality or enforceability of the remaining provisions contained herein shall not be in any way affected or impaired thereby. In addition, if any provision of this Agreement is found by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, the Shareholders shall negotiate in good faith appropriate modifications to this Agreement to replace the invalid, illegal or unenforceable provision by a valid, legal and enforceable provision the effect and purpose of which is as close as possible to the intended effect and purpose of the invalid, illegal or unenforceable provision.

13.9   Currency.  Except as otherwise explicitly provided in this Agreement, all dollar amounts referred to in this Agreement are stated in the lawful currency of Canada.

13.10   Number and Gender.  Words in the singular include the plural and vice versa and words in one gender include all genders.

13.11   Successors and Assigns.  This Agreement shall enure to the benefit of and be binding upon the Parties and their personal representatives, successors and permitted assigns and any reference to a right or an obligation of a Party shall be deemed to include a reference to such personal representatives, successors and permitted assigns to the extent that the context requires.

13.12   Governing Law.  This Agreement and the rights, obligations and relations of the Parties shall be governed and construed in accordance with the laws of the Province of Québec and the federal laws of Canada applicable therein.

13.13   Jurisdiction.  The Parties agree to submit to the jurisdiction of the courts of the Province of Québec (within the judicial district of Montreal) with respect to all matters that relate to this Agreement.

13.14   Counterparts.  This Agreement and any amendment, supplement, restatement or termination of this Agreement in whole or in part may be signed and delivered in any number of counterparts (including facsimile counterparts), each of which when signed and delivered is an original but all of which taken together constitute one and the same instrument.

13.15   Other Documents.  Each Shareholder agrees to sign all such documents and do all such things as may be necessary or desirable to more completely and effectively carry out the terms and intentions of this Agreement and to cause the Company to act in the manner contemplated by this Agreement and the Amended and Restated Limited Partnership Agreement.

13.16   Voting.  Each Shareholder agrees to vote its respective shares in the share capital of the Company so that the decisions, acts, resolutions, things, by-laws or other documents of the Company be in conformity with the provisions of this Agreement.

13.17   Legend on Certificates.  The certificate for shares issued or to be issued by the Company shall bear the following legend:

"The transfer of the shares represented by this certificate is subject to the provisions of and restrictions on transfer set forth in the articles of the Company and the Shareholders Agreement dated as of October 1, 2010."

(signature page follows)

IN WITNESS WHEREOF, THE PARTIES HAVE DULY EXECUTED THIS AGREEMENT ON THE DAY FIRST WRITTEN ABOVE.

BÉCANCOUR SILICON INC.

Per:           /s/ Peter Kalins_________________________

duly authorized

Name:                      Peter Kalins

Title: General Counsel and Corporate Secretary

QUÉBEC SILICON GENERAL PARTNER INC.

Per:           /s/ Peter Kalins _________________________

duly authorized

Name:                      Peter Kalins

Title: General Counsel and Corporate Secretary

(signature page to the Shareholders Agreement)

DOW CORNING NETHERLANDS, B.V.

Per:           /s/ B. Anderson_________________________

duly authorized

Name: B. Anderson

Title: Managing Director B

Per:           /s/ Brian B. Tessin_______________________

duly authorized

Name: Brian B. Tessin

Title: Director - Class A

(signature page to the Shareholders Agreement)

SCHEDULE 7.4

INITIAL REPRESENTATIVES

SHAREHOLDER	REPRESENTATIVES
BSI	John Fenger Robert J. Dietrich Peter A. M. Kalins
DCC GP CO	David R. Soldan Andrew E. Tometich

SCHEDULE 7.9

INITIAL OPERATING COMMITTEE MEMBERS

John Fenger

Millicent Poon

William E. Boardwine

Paul J. Marion

EX-10.3

EXHIBIT 10.3

AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

SILICIUM QUÉBEC SOCIÉTÉ EN COMMANDITE/

QUÉBEC SILICON LIMITED PARTNERSHIP

October 1, 2010

TABLE OF CONTENTS

ARTICLE 1 INTERPRETATION 2

1.1           Definitions2

ARTICLE 2 TERM 11

2.1           Effective date and Term11

ARTICLE 3 THE PARTNERSHIP 11

3.1           Formation of Partnership.11

3.2           Name12

3.3           United States Tax Classification12

ARTICLE 4 BUSINESS OF THE PARTNERSHIP 12

4.1           Business12

4.2           Registered domicile and principal executive office12

4.3           Fiscal Year12

ARTICLE 5 MANAGEMENT OF THE PARTNERSHIP 13

5.1           General13

5.2           Restrictions on Special Partners13

5.3           Restrictions on General Partner13

5.4           Limited Liability of a Special Partner13

ARTICLE 6 THE GENERAL PARTNER 14

6.1           Power of Attorney14

6.2           General Provisions Concerning Power of Attorney15

6.3           Specific Power and Authority of the General Partner15

6.4           Duty of Care17

6.5           Limitation of Liability18

6.6           Payments to the General Partner of Expenses18

6.7           Other Matters Concerning the General Partner18

6.8           Status and Capacity of the General Partner and the Partnership18

6.9           Insurance20

6.10           Transactions Involving the General Partner and its Controlled Affiliated Persons20

6.11           Safekeeping of Assets20

6.12           Payments20

6.13           Restrictions upon the General Partner21

6.14           Prohibition from Commingling Funds21

ARTICLE 7 THE SPECIAL PARTNERS 21

7.1           Status and Capacity of the Special Partners21

7.2           Competing Businesses22

ARTICLE 8 CAPITAL 22

8.1           Capital22

8.2           Attributes of the Units22

8.3           Units Fully-Paid and Non-Assessable23

8.4           [Reserved]23

8.5           Individual Capital Accounts23

8.6           Units Issued and Outstanding23

8.7           Admission of Additional Partners23

8.8           Additional Units24

8.9           Registrar and Transfer Agent; and Amendments to the Register24

8.10           Inspection of Register24

8.11           Certificates24

8.12           Lost Certificates24

8.13           Effect of Registration25

8.14           Retirement of Note25

ARTICLE 9 SECURITY INTERESTS 25

9.1           Limitation on Security Interests25

9.2           Security Interest by Operation of Law25

ARTICLE 10 TRANSFER OF PARTNERSHIP INTEREST 25

10.1           Prohibition on Transfer25

10.2           No Violation of Applicable Laws26

10.3           Transfers in Violation of this Agreement26

10.4           Rights of First Refusal26

10.5           Tag Along Rights27

10.6           Put Rights Upon a Change of Control Event28

10.7           Other Call Rights29

10.8           Transfers to Affiliates30

10.9           Rights and Obligations of Transferees31

10.10           Expenses Relating to Transfer31

10.11           Application to Affiliates31

ARTICLE 11 RESIGNATION OR REMOVAL OF GENERAL PARTNER 31

11.1           Resignation or Withdrawal of the General Partner31

11.2           Removal of the General Partner31

11.3           Transfer of Management and Title to New General Partner32

11.4           Condition Precedent32

11.5           Successor32

11.6           Release33

ARTICLE 12 ALLOCATIONS AND DISTRIBUTIONS 33

12.1           Allocation of Profits and Losses33

12.2           United States Federal Income Tax Allocations34

12.3           Annual Tax Distribution34

12.4           Quarterly Advances of Distributable Cash34

12.5           Special Distributions35

12.6           Other Distributions of Distributable Cash35

12.7           Auditor's Determination35

12.8           Return of Capital Contribution35

12.9           Repayments35

12.10           Negative Distributable Cash35

12.11           Offset35

12.12           Capital Cost Allowance36

12.13           Tax Elections36

12.14           Adjustment Indemnity36

ARTICLE 13 MEETINGS OF THE PARTNERS 37

13.1           Calling of Meetings37

13.2           Quorum38

13.3           Notice38

13.4           Voting38

13.5           Decisions39

13.6           Proxies39

13.7           Record Dates39

13.8           Chairman40

13.9           Form of Proxy40

13.10           Additional Rules and Procedures40

13.11           Authorized Attendance40

13.12           Resolutions in Writing40

ARTICLE 14 RECORDS, REPORTS AND REPORTING 40

14.1           Records and Books of Account40

14.2           Reports41

14.3           Income Tax Information42

14.4           Accounting Policies43

14.5           Auditor43

14.6           Audit43

14.7           Banking43

14.8           Internal Controls44

ARTICLE 15 CASH CALLS 44

15.1           Cash Call Notice44

15.2           Non-Contributing Special Partner44

15.3           Funds for Special Projects45

ARTICLE 16 DEFAULT OF A SPECIAL PARTNER 45

16.1           Default45

16.2           No Default46

16.3           Acts of Insolvency46

16.4           Rights of Defaulting Special Partner upon a Default47

16.5           Right to Purchase of Non-Defaulting Special Partners47

16.6           Default Payments by Non-Defaulting Special Partners47

16.7           Waiver 2229 Civil Code47

ARTICLE 17 TERMINATION OF THE PARTNERSHIP 48

17.1           No Dissolution or Termination48

17.2           Termination48

ARTICLE 18 CONFIDENTIALITY 49

18.1           Confidentiality49

ARTICLE 19 DISPUTE RESOLUTION 50

19.1           Amicable Resolution50

19.2           Mediation50

19.3           Arbitration51

19.4           Non-Exclusive Remedy52

19.5           Enforcement by Partners52

ARTICLE 20 INDEMNIFICATION 52

20.1           General Indemnity52

20.2           General Partner's Indemnity52

20.3           Advance by the Partnership53

20.4           Insurance53

20.5           Exclusivity53

ARTICLE 21 GENERAL 53

21.1           Notices53

21.2           Preamble55

21.3           Execution of Documents55

21.4           Determinations of Book Value and Fair Market Value55

21.5           Entire Agreement56

21.6           Amendment56

21.7           No Waiver56

21.8           Severability56

21.9           Currency56

21.10           Number and Gender56

21.11           Date for Any Action57

21.12           Accounting Principles57

21.13           Successors and Assigns57

21.14           Public Announcements57

21.15           Governing Law57

21.16           Jurisdiction57

21.17           Further Assurances57

21.18           Third Parties58

21.19           Counterparts58

()

AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT dated October 1, 2010,

BY AND BETWEEN: BÉCANCOUR SILICON INC., a company governed by the laws of Québec;

(hereinafter called "BSI")

AND: DOW CORNING CANADA, INC., a corporation governed by the laws of Canada;

(hereinafter called "DCC LP Canco")

AND: QUÉBEC SILICON GENERAL PARTNER INC., a company governed by the laws of Québec;

(hereinafter called "GP")

WHEREAS Silicium Québec Société en commandite / Québec Silicon Limited Partnership (the "Partnership") is a limited partnership that has been formed according to the laws of the Province of Québec to operate the Business (as defined below) and is governed by a limited partnership agreement entered into on August 18, 2010 between BSI, as special partner, and GP, as general partner, as amended by the Intermediate Agreement of Limited Partnership dated September 30, 2010 (collectively, the "Original Limited Partnership Agreement");

WHEREAS (i) concurrently with the entering into of the above-referred Intermediate Agreement of Limited Partnership, BSI transferred to the Partnership its silicon metal production operations (excluding solar grade silicon purification operations) that it owned and operated at the Facility (as defined below) (the "Business") pursuant to the Business Transfer Agreement (as defined below) in exchange for the issuance by the Partnership to BSI of 51,000 Units (as defined below) and the Note in the principal amount of US $40,254,751 and (ii) GP has contributed CAD $10,000 to the capital of the Partnership in exchange for the issuance by the Partnership to GP of 10 Units;

WHEREAS BSI Parent (as defined below) owns all of the issued and outstanding shares in the share capital of BSI;

WHEREAS on the date hereof, pursuant to the Framework Agreement (as defined below), DCC LP Canco contributed US $40,254,751, which amount will be subject to adjustment in accordance with the Framework Agreement, to the capital of the Partnership in exchange for the issuance by the Partnership to DCC LP Canco of 49,000 Units (the "DCC LP Canco Unit Acquisition");

WHEREAS Dow Corning Corporation, a corporation organized under the laws of the State of Michigan ("DCC LP Canco Parent"), owns, directly or indirectly, all of the issued and outstanding shares in the share capital of DCC LP Canco;

WHEREAS BSI, DCC LP Canco and GP desire to amend, supplement and restate the Original Limited Partnership Agreement to, inter alia, introduce DCC LP Canco as a special partner of the Partnership;

NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter contained, the parties hereto hereby agree as follows:

ARTICLE 1

INTERPRETATION

1.1Definitions

In this Agreement, the following expressions shall have the following meanings, unless there is something in the context inconsistent therewith:

"AAA" has the meaning attributed thereto in Section 19.3(a);

"Absolute Control" means:

(i)   in relation to a Person that is a corporation, the ownership, directly or indirectly, of voting securities of such Person carrying all of the voting rights attaching to all voting securities of such Person (other than Qualifying Shares) and which are sufficient, if exercised, to elect the entirety of its board of directors; and

(ii)   in relation to a Person that is a partnership, limited partnership, mutual fund trust, trust or other similar unincorporated entity or association of any nature, the ownership, directly or indirectly, of voting securities of such Person (including the general partner thereof, as the case may be) carrying all of the voting rights attaching to all voting securities of such Person (including the general partner thereof, as the case may be) or the ownership of all of the other interests or rights entitling the holder thereof to exercise exclusive control and direction over the management and policies of such Person, as the case may be; and "Absolutely Controls" and "Absolutely Controlled" shall have similar meanings;

"Absolutely Controlled Affiliate" means, in relation to any Person, any other Person that is Absolutely Controlled by the first-mentioned Person;

"Accounting Firm" has the meaning ascribed thereto in Section (b);

"Act of Insolvency" has the meaning ascribed thereto in Section 16.3;

"Affiliate" means, in relation to any Person, any other Person that, directly or indirectly, (i) Absolutely Controls the first-mentioned Person, (ii) is an Absolutely Controlled Affiliate of the first-mentioned Person or (iii) is under common Absolute Control with the first-mentioned Person;

"Affiliated Person" means, in relation to any Person, any other Person that, directly or indirectly, Controls or is Controlled by or under common Control with the first-mentioned Person;

"Agreement" means this Amended and Restated Limited Partnership Agreement, all schedules attached hereto and any agreement or schedule amending this Agreement; the words "hereto", "herein", "hereinabove", "hereinafter", "hereof", "hereby" and "hereunder" and similar expressions refer to this Agreement and not to any particular section, clause or part of it;

"applicable Law" has the meaning ascribed thereto in the definition of Laws;

"arm's length" has the meaning ascribed thereto in the Income Tax Act;

"BSI" means Becancour Silicon Inc.;

"BSI Parent" means Timminco Limited, a corporation organized under the laws of Canada, including any successor thereto;

"Business" has the meaning ascribed thereto in the preamble;

"Business Day" means any day of the year, other than a Saturday, Sunday or other day on which banks are closed for business in Montreal, Québec or in New York, New York;

"Call Rights" has the meaning ascribed thereto in Section 10.7;

"Called Interests" has the meaning ascribed thereto in Section 10.7;

"Called Interests Valuation Price" has the meaning ascribed thereto in Section 10.7(d);

"Calling Partner" has the meaning ascribed thereto in Section 10.7;

"Canadian Dollar", "CAD" or "$" means, unless otherwise indicated, dollars in the lawful currency of Canada;

"Capital Contribution" means any contributions of cash, assets or property made to the capital of the Partnership by the Partners or any one Partner, as the case may be, (including the predecessor holders of a Partnership Interest of such Partners, as applicable) net of any liabilities secured by such contributed assets or property assumed by the Partnership or subject to which the Partnership takes or has taken the contributed assets or properties;

"Cash Call Notice" has the meaning ascribed thereto in Section 15.1;

"Change of Control Event" means the occurrence of any of the following: (a) the direct or indirect transfer, conveyance or other disposition (other than by way of merger, amalgamation or other consolidation), in one or a series of related transactions, of all or substantially all of the properties and assets of: (i) BSI Parent and its subsidiaries, or (ii) the Change of Control Member and its subsidiaries, taken as a whole, to any Person or group of Persons acting together for the purpose of acquiring such properties and assets; (b) the consummation of any transaction or series of related transactions (including, without limitation, any merger, amalgamation or other consolidation) the result of which is that any Person or group of Persons acting together for the purpose of acquiring, holding or disposing of the securities of BSI Parent or the Change of Control Member acquires Control of BSI Parent or the Change of Control Member, as applicable, other than an Affiliated Person of BSI Parent or the Change of Control Member on the date hereof (but including any holding company formed by BSI Parent subsequent to the date hereof as part of an internal restructuring); (c) the consummation of any transaction or series of related transactions (including, without limitation, any merger, amalgamation or other consolidation) the result of which is that the beneficial owners of the share capital or other equity interests of BSI Parent or the Change of Control Member, as applicable, immediately prior to such transaction or transactions cease to be the beneficial owners, in the aggregate, of at least such number of voting securities sufficient to Control the surviving or resulting entity of such transaction or transactions; or (d) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of BSI Parent (together with any new directors whose election by the Board of Directors or whose nomination for election by the shareholders of BSI Parent was approved by a vote of a majority of the directors then still in office who were directors at the beginning of such period or whose election or nomination for election was previously approved) cease to constitute a majority of the directors then in office; provided, that in the case of any of clauses (a)(ii), (b) or (c) above, if the Partnership Interests held by the Change of Control Member constitute all or substantially all of the assets of the Change of Control Member, then such event shall not constitute a Change of Control Event, but rather shall be deemed a Transfer. Notwithstanding the above, (x) no purchase of securities of BSI Parent by Advanced Metallurgical Group N.V. or its Affiliated Persons (collectively, "AMG") shall constitute a Change of Control Event and a public sale of equity interests in BSI Parent shall not, in and of itself, represent a Change of Control Event, and (y) the acquisition of beneficial ownership of 40% or more of the outstanding shares of BSI Parent by any Person or group of related Persons shall constitute a Change of Control Event if said position is greater than that held by AMG. The Special Partners agree and acknowledge that, as of the date hereof, the sale or other transfer of the securities of BSI to any Person or group of Persons other than an Affiliate of BSI constitutes a Transfer rather than a Change of Control Event and that any such sale or transfer at a future date would be a Change of Control Event or Transfer, as the case may be, depending on the circumstances at such time;

"Change of Control Member" means any affiliate of BSI Parent that, directly or indirectly, owns Partnership Interests or GP Shares, so long as Partnership Interests and/or GP Shares do not constitute all or substantially all of its assets;

"Civil Code" means the Civil Code of Québec, as the same may be amended, supplemented or restated from time to time;

"Code" means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder;

"Confidential Information" has the meaning ascribed thereto in Section 18.1;

"Contribution Deadline" has the meaning ascribed thereto in Section 15.1;

"Control" means:

(i)   in relation to a Person that is a corporation, the ownership, directly or indirectly, of voting securities of such Person carrying more than 50% of the voting rights attaching to all voting securities of such Person (Qualifying Shares in the capital of such Person being deemed to be owned by the largest shareholder of such Person) or which are sufficient, if exercised, to elect the majority of its board of directors; and

(ii)   in relation to a Person that is a partnership, limited partnership, mutual fund trust, trust or other similar unincorporated entity or association of any nature, the ownership, directly or indirectly, of voting securities of such Person (including the general partner thereof, as the case may be) carrying more than 50% of the voting rights attaching to all voting securities of such Person (including the general partner thereof, as the case may be) or the ownership of more than 50% of other interests or rights entitling the holder thereof to exercise, control and direction over the management and policies of such Person, as the case may be; and "Controls", "Controlled" and "Controlling" shall have similar meanings; provided that Dow Chemical Company and Corning Incorporated each shall be deemed to be a Person in Control of DCC LP Canco Parent so long as it owns at least 50% of the outstanding share capital of DCC LP Canco Parent and AMG shall be deemed to be a Person in Control of BSI Parent so long as it owns at least 40% of the outstanding share capital of BSI Parent;

"Controlled Affiliated Person" means, in relation to any Person, any other Person that is Controlled by the first-mentioned Person;

"DCC Customer" means DCC LP Canco Parent or any Affiliate thereof to which DCC LP Canco Parent from time to time assigns its rights and obligations under the Supply Agreement or otherwise designates to be a party thereto;

"DCC GP Co" means Dow Corning Netherlands, B.V., a corporation organized under the laws of the Netherlands;

"DCC LP Canco" has the meaning ascribed to it in the preamble;

"DCC LP Canco Parent" has the meaning ascribed to it in the preamble, including any successor thereto;

"DCC LP Canco Unit Acquisition" has the meaning ascribed thereto in the preamble;

"Default" has the meaning ascribed thereto in Section 16.1;

"Default Payments" has the meaning ascribed thereto in Section 16.6;

"Defaulting Special Partner" has the meaning ascribed thereto in Section 16.1, in fine;

"Dispute" has the meaning ascribed thereto in Section 20.1;

"Distributable Cash" means, at the time of determination, the positive cash balances available in excess of anticipated working capital needs (including, as working capital needs, any funds necessary to satisfy any payment obligations under working capital and other debt facilities and, if payable by the Partnership, for taxes), anticipated capital requirements and reasonable reserves established, from time to time, to meet anticipated expenses and unforeseen costs; it being understood that draw downs on working capital and other debt facilities are not intended to increase the amount of Distributable Cash (other than to provide funds for the payment of taxes by the Partnership, if any), as determined by the GP in respect of a Fiscal Quarter or a Fiscal Year;

"Distribution" means: (i) any distribution of the income of the Partnership to any Partner; or (ii) any distribution or payment made by the Partnership to or at the direction of a Partner in connection with the purchase, redemption or retirement by the Partnership of any outstanding Units, including in each case any distribution made from Distributable Cash;

"Facility" means the silicon metal facility located at 6500 Rue Yvon-Trudeau, Bécancour, Québec (as more fully defined in the Framework Agreement);

"Fiscal Quarter" means each of the three-month periods ending on March 31, June 30 and September 30 in each Fiscal Year;

"Fiscal Year" has the meaning ascribed thereto in Section 4.3;

"Framework Agreement" means that certain Framework Agreement, dated as of August 10, 2010, by and among DCC LP Canco Parent, BSI Parent and BSI, as the same may be amended from time to time;

"GAAP" means the accounting principles generally accepted in Canada from time to time, including the policies and standards of disclosure recommended by the Canadian Institute of Chartered Accountants from time to time, applied in a consistent manner from period to period;

"General Partner" means GP, acting in its capacity as a general partner of the Partnership under this Agreement, or any successor or other Person admitted to the Partnership as a successor to the General Partner in accordance with the provisions of this Agreement;

"Governmental Authority" means any: (i) federal, provincial, regional, local, municipal, foreign, international, multinational, territorial, state or other government, governmental or public department, central bank, court, tribunal, arbitral body, statutory body, commission, board, bureau or agency, domestic or foreign; (ii) subdivision, agent, commission, board or authority of any of the foregoing; or (iii) quasi-governmental, private body or regulatory entity exercising any regulatory, expropriation or taxing authority under, or for the account of, any of the foregoing, including any stock exchange;

"GP" means Québec Silicon General Partner Inc., a company organized under the laws of Québec;

"GP Board" means the board of directors of GP;

"GP Class A Shares" means the class A shares in the share capital of GP;

"GP Class B Shares" means the class B shares in the share capital of GP;

"GP Organizational Documents" means the Articles of Incorporation of GP in effect from time to time;

"GP Shares" means the shares in the share capital of GP;

"IFRS" means International Financial Reporting Standards, as in effect from time to time;

"including", "include" and words of similar import when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as "without limitation", or "but not limited to", or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter;

"Income Tax Act" means the Income Tax Act (Canada) as the same may be amended, supplemented or restated from time to time, and includes all regulations promulgated thereunder, and any reference to the Income Tax Act also refers to any successor or replacement federal legislation;

"Insolvent" means, with respect to the applicable Person on any date of determination, satisfying the definition of an "insolvent person" contained in Section 2 of the Bankruptcy and Insolvency Act (Canada), and "Insolvency" means the condition of being Insolvent;

"Laws" means all statutes, codes, treaties, directives, ordinances, decrees, rules, regulations, municipal by-laws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, terms and conditions of any grant, approval, permission, authority or license, rulings or awards, policies, voluntary restraints, guidelines, or any provisions of the foregoing, of any Governmental Authority or self-regulatory entity, in each case which have the force of law, including any interpretation thereof and any decision, doctrine or recommendations from any Governmental Authority or self-regulatory entity, in each case which have the force of law, and general principles of common and civil law and equity, in each case which have the force of law; and "Law" means any one of the foregoing, and the term "applicable" with respect to such Law and in the context that refers to one or more Persons, means that such Law applies to such Person or Persons or its or their business, undertaking, property, assets or securities and emanates from a Governmental Authority or self-regulatory entity having jurisdiction over the Person or Persons or its or their business, undertaking, property, assets or securities;

"Mandatory Contribution" has the meaning ascribed thereto in Section 15.1;

"Negative Distributable Cash" means, at the time of determination, the negative cash balances short of anticipated working capital needs (including, as working capital needs, any funds necessary to satisfy any payment obligations under working capital and other debt facilities and, if payable by the Partnership, for taxes), anticipated capital requirements and reasonable reserves established, from time to time, to meet anticipated expenses and unforeseen costs; it being understood that draw downs on working capital and other debt facilities are not intended to increase the amount of Distributable Cash (other than to provide funds for the payment of taxes), as determined by the GP in respect of a Fiscal Quarter or a Fiscal Year;

"New Shareholders Agreement" has the meaning ascribed thereto in Section 11.5;

"Non-Defaulting Special Partners" has the meaning ascribed thereto in Section 16.1, in fine;

"Note" means the promissory note issued by the Partnership to BSI pursuant to the Business Transfer Agreement;

"Offer Notice" has the meaning ascribed thereto in Section 10.4(a);

"Original Limited Partnership Agreement" has the meaning ascribed thereto in the preamble;

"Partners" means the General Partner and the Special Partners, and "Partner" means any one of them;

"Partnership" has the meaning ascribed thereto in the preamble;

"Partnership Interest" means the interest of a Partner in the Partnership consisting of: (i) such Partner's interest and share in profits, losses, reserves, holdbacks, allocations and distributions of the Partnership and its common stock (as referred to in the Civil Code); (ii) such Partner's capital account maintained on the books of the Partnership; (iii) such Partner's right to vote or grant or withhold consents or approvals with respect to Partnership matters (if any) as provided herein or in the Civil Code; and (iv) such Partner's other rights, obligations and privileges as provided herein or in the Civil Code, and includes Units;

"Partnership Property" means the assets and property (including monies) of the Partnership, from time to time;

"Partnership Publicity Act" means the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (Québec) as the same may be amended, supplemented or restated from time to time, and includes all regulations promulgated thereunder; and any reference to the Partnership Publicity Act also refers to any successor or replacement legislation of the Province of Québec;

"Paying Non-Default Special Partner" has the meaning ascribed thereto in Section 16.6;

"Person" means any individual, sole proprietorship, partnership, corporation or company, with or without share capital, trust, foundation, joint venture or any other incorporated or unincorporated entity or association of any nature;

"Prime Rate" means, in respect of any day, the annual rate of interest established from time to time by the Royal Bank of Canada or its successor as being its reference rate then in effect for determining interest rates on commercial loans in Canadian Dollars made in Canada by Royal Bank of Canada or its successors;

"Pro-Rata Share" means, with respect to any Partner, (i) the percentage determined by dividing the number of Units held by such Partner by the total number of issued and outstanding Units at such time, and (ii) as of the date of this Agreement, the percentage set forth next to such Partner's name as its Pro-Rata Share in Section 8.5; provided that the total of all Pro-Rata Shares shall always be equal to 100%;

"Put Notice" has the meaning ascribed thereto in Section 10.6(b);

"Put Trigger Date" has the meaning ascribed thereto in Section 10.6(c);

"Qualifying Shares" means shares that a Person must hold to qualify as a director of the issuing corporation under applicable Law, or shares held by a Person or Persons (equal to no more than 1% of the issued and outstanding share capital of the issuing corporation) so that the issuing corporation has the minimum number of shareholders or members required under applicable Law;

"Register" means the register of, inter alia, the names and domicile of each of the Special Partners, the number of Units held by each of the Special Partners, any information concerning their contributions to the common stock of the Partnership, and such other information which the General Partner is required to keep under the Civil Code;

"Rules" has the meaning ascribed thereto in Section 19.3(a);

"Schedules" means the Schedules attached hereto;

"Security Interest" means any mortgage, pledge, assignment by way of security, security granted under the Bank Act (Canada), hypothec (legal or conventional, immovable or movable, with or without delivery), pledge, security agreement, financing or any other security interest on any property and any and all similar arrangements, conditions or encumbrances on any property that in substance secure payment or performance of an obligation, including any and all similar arrangements, conditions or encumbrances on any property under any Law applicable to any Partner;

"Selling Partner" has the meaning ascribed thereto in Section 10.7;

"Series A Partner" means the Special Partner that holds, or whose Affiliate holds, the GP Class A Shares (being BSI as at the date of this Agreement);

"Series B Partner" means the Special Partner that holds, or whose Affiliate holds, the GP Class B Shares (being DCC LP Canco as at the date of this Agreement);

"Shareholders Agreement" means the shareholders agreement with respect to GP entered into concurrently with this Agreement between BSI, DCC GP Co and GP, as the same may be amended from time to time;

"Special Partner" means the special partners of the Partnership as at the date of this Agreement, namely BSI and DCC LP Canco, for so long as they remain special partners of the Partnership, and any other Person which becomes and remains a special partner of the Partnership in accordance with the provisions of this Agreement; and "Special Partners" is the collective reference to all such parties;

"Supply Agreement" means the agreement between the Partnership, DCC Customer and BSI entered into on the date hereof, as the same may be amended from time to time, regarding the supply and allocation of silicon metal output from the Business;

"Tagging Partner" has the meaning ascribed thereto in Section 10.5;

"Taxation Act" means the Taxation Act (Québec) as the same may be amended, supplemented or restated from time to time, and includes all regulations promulgated thereunder; and any reference to the Taxation Act also refers to any successor or replacement legislation of the Province of Québec;

"Third Party Offer" has the meaning ascribed thereto in Section 10.4;

"Transfer" means, in respect of a Partnership Interest or GP Shares, a transfer, sale, exchange, assignment, creation of a Security Interest or other encumbrance or disposition, including the grant of an option or other right, whether directly or indirectly through the transfer of equity interests of an Affiliate substantially all of whose assets are comprised of a Partnership Interest or GP Shares, whether voluntarily, involuntarily, by operation of law or pursuant to a merger, amalgamation, consolidation or similar business combination, of or in relation to such Partnership Interest and/or GP Shares; provided, that (i) a transfer of equity interests in BSI Parent shall not be deemed a Transfer (although may represent a Change of Control Event), (ii) a transfer of the equity interests of DCC LP Canco Parent shall not be deemed a Transfer, (iii) a reorganization involving BSI and BSI Parent whereby BSI is merged or wound-up into BSI Parent shall not be deemed a Transfer and a reorganization of DCC LP Canco and DCC LP Canco Parent (or one of its Affiliates) whereby DCC LP Canco is merged or wound-up into DCC LP Canco Parent (or one of its Affiliates) shall not be deemed a Transfer and (iv) "Transferred", "transferred", "Transferee", and "transferee" each have a correlative meaning. The foregoing notwithstanding, the grant of a Security Interest in a Partnership Interest or GP Shares to a financial institution in connection with any bona fide loan to a Partner or its Affiliates from such financial institution in which such financial institution does not have the power to vote or dispose of such Partnership Interest or GP Shares other than in case of a default caused by the action or inaction of such Partner, and, in such case, such financial institution holds the Partnership Interest or GP Shares subject to the terms and conditions of this Agreement and the Shareholders Agreement (including, without limitation, subject to the provisions of Article 10 hereof), and which Security Interest shall be automatically released upon a Special Partner's exercise of any call rights under Sections 10.7 and 16.5, shall not be deemed a Transfer;

"Unanimous Resolution" means:

(i)   a resolution passed by the votes of both Special Partners at a duly constituted meeting of the Partners or any adjournment thereof; or

(ii)   a written resolution signed in one or more counterparts by both Special Partners;

"Units" means the units evidencing the Partnership Interest of a Partner; and

"Valuation Price" has the meaning ascribed thereto in Section 10.6(d).

ARTICLE 2

TERM

2.1Effective date and Term

This Agreement will be effective from the date hereof and, unless it is terminated earlier in accordance with the terms of this Agreement, will continue for a period of 99 years commencing as and from October 1, 2010. To the fullest extent permitted under applicable Law, each of the Partners hereby waives its rights under Article 2228 of the Civil Code with respect to withdrawal from the Partnership.

ARTICLE 3

THE PARTNERSHIP

3.1Formation of Partnership.

GP, as general partner, and BSI, as special partner, constituted themselves as a limited partnership under the Civil Code and the Partnership Publicity Act on August 18, 2010 and subject to the terms and conditions of the Original Limited Partnership Agreement. Each of GP and BSI hereby acknowledge and agree that it has executed such declarations, certificates, statements and other documents, and has done such filings, registrations and recordings and performed such other acts that were required in order to comply with the requirements of Laws applicable in the Province of Québec for the formation and maintenance of the Partnership as a limited partnership. The Partners hereby acknowledge and agree that henceforth they shall execute such other declarations, certificates, statements and other documents, and do such further filings, registrations and recordings and perform such further acts that shall be required in order to comply with the requirements of Laws applicable in the Province of Québec for the maintenance of the Partnership as a limited partnership.

3.2Name

The Partnership shall carry on business under the name of "Silicium Québec Société en commandite" in its French language version and "Québec Silicon Limited Partnership" in its English language version or such other name as may, from time to time, be designated by all the Partners. Subject to applicable Law, the French and English language versions may be used alone or together.

3.3United States Tax Classification

It is the intention of the parties hereto that the Partnership be treated as a partnership for United States federal, state and local income tax purposes. The Partnership shall not elect to be treated as other than a partnership under Treasury Regulations Section 301.7701-3(c) (or any corresponding applicable provisions of United States state or local law) unless the Series B Partner instructs the Partnership otherwise, in which case the Partnership shall make such election and timely file any required Internal Revenue Service Forms, as instructed by the Series B Partner. Subject to such election, neither the Partnership nor any Partner shall take any other action that may cause the Partnership to be treated as other than a partnership for United States federal, state and local income tax purposes.

ARTICLE 4

BUSINESS OF THE PARTNERSHIP

4.1Business

The Partnership was formed and is hereby continued for the purpose of carrying out the Business. Except as otherwise provided in this Agreement, the Partnership will have the power to do any and every act necessary, proper, convenient or incidental to the pursuit or accomplishment of the Business under this Agreement. The Partnership shall carry on business in such a manner as to ensure, to the greatest extent possible, the limited liability of the Special Partners, and the General Partner shall register the Partnership in any jurisdiction where the General Partner considers it appropriate or is required to do so.

4.2Registered domicile and principal executive office

The registered domicile of the Partnership shall be located at 6500, Yvon-Trudeau Street, Bécancour, Québec, or at such other location approved by all the Partners.

4.3Fiscal Year

The fiscal year of the Partnership will end on December 31 of each year, subject to amendment by the GP Board in accordance with the Shareholders Agreement (the "Fiscal Year").

ARTICLE 5

MANAGEMENT OF THE PARTNERSHIP

5.1General

Subject to the provisions of the Civil Code, the business and affairs of the Partnership will be managed solely by the General Partner. Subject to the terms of this Agreement, the Shareholders Agreement and the GP Organizational Documents, the General Partner shall have exclusive authority to manage, control and administer the business, affairs and undertaking of the Partnership and, subject to decisions of the Special Partners under this Agreement (when required), to make all decisions regarding the business, affairs and undertaking of the Partnership. Pursuant to the foregoing, the General Partner shall have all of the rights and powers of a general partner as provided in the Civil Code and as otherwise provided by applicable Law, and, subject to the foregoing, any action taken by the General Partner shall constitute the act of, and serve to bind, the Partnership.

5.2Restrictions on Special Partners

Subject to the provisions of the Civil Code, no Special Partner shall have any right or authority to:

(a)   borrow or use the funds of the Partnership; or

(b)   except as permitted or contemplated under this Agreement, compel or seek a partition or sale, judicial or otherwise, of any Partnership Property, or otherwise require any Partnership Property to be distributed to any Partner in kind.

5.3Restrictions on General Partner

Notwithstanding the provisions of Section 5.1, the General Partner shall not, without the prior written consent of all of the Special Partners:

(a)   do any act in contravention of this Agreement;

(b)   do any act which makes it impossible to carry on the business, affairs and undertaking of the Partnership; or

(c)   carry-on any business, affairs and undertaking other than the Business.

5.4Limited Liability of a Special Partner

Subject to the provisions of the Civil Code, the liability of a Special Partner for the debts, liabilities and other obligations of the Partnership is limited to its agreed contribution to the Partnership pursuant to this Agreement and a Special Partner will not as such or otherwise be liable for any further assessment, claim or contribution to the Partnership. For greater certainty, the approval, whether express or implied, if any, by any Special Partner of any cash call forecast presented to the Special Partners shall in no event constitute or be construed as an amount which such Special Partner has agreed to contribute to the Partnership.

ARTICLE 6

THE GENERAL PARTNER

6.1Power of Attorney

Each Special Partner hereby constitutes and appoints the General Partner, with, subject to the Civil Code, full power and authority to delegate, without however in any way relieving the General Partner from any of its obligations and liabilities hereunder or under any applicable Law, its true and lawful attorney, agent and mandatary, with full power and authority, in its name, place and stead, and for its use and benefit, to:

(a)   execute, swear to, record and file in the appropriate public offices any and all of the following:

(i)   all declarations, including declarations of change, and other instruments necessary to form, qualify, continue and keep in good standing the Partnership as a valid and subsisting limited partnership under Laws applicable in the Province of Québec and in all jurisdictions where it carries on business;

(ii)   all declarations, including declarations of change, and other instruments necessary to reflect any amendment to this Agreement, provided, that such amendments were duly authorized pursuant to this Agreement; and

(iii)   any elections under the Income Tax Act, the Taxation Act, and under any analogous legislation on behalf of the Partnership as may be necessary, prudent or advisable in connection with the business, assets, properties, affairs and undertaking of the Partnership, including its dissolution, winding-up, liquidation and termination (if such dissolution, winding-up, liquidation or termination is authorized pursuant to this Agreement), as the case may be, provided, that the General Partner does not exceed its authority, in executing any such elections;

(b)   execute and file with any governmental authority any documents necessary to be filed in connection with the business, assets, properties, affairs and undertaking of the Partnership as authorized in this Agreement;

(c)   subject to the provisions of this Agreement, execute and deliver such documents for, on behalf of and in the name of the Partnership as may be necessary to carry on the Business;

(d)   execute and deliver such documents as are necessary to give effect to any duly authorized amendment to this Agreement; and

(e)   execute and deliver such instruments, documents, conveyances and other instruments as may be necessary in the discretion of the General Partner to give effect to any dissolution, winding-up, liquidation or termination of the Partnership authorized pursuant to this Agreement. The authority granted to the General Partner pursuant to this Section 6.1(e) shall not cease on the dissolution, winding-up, liquidation or termination of the Partnership, but shall continue in full force and effect thereafter. The provisions of this Section 6.1, however, shall not permit the General Partner to delegate authority for matters requiring a special vote of the GP Board pursuant to the GP Organizational Documents or the Shareholders Agreement, unless any such approval is obtained.

6.2General Provisions Concerning Power of Attorney

The grant of power and authority contained in Section 6.1:

(a)   has been granted in connection with the performance of a specific obligation, namely the obligation to administer and manage the business, assets, properties, affairs and undertaking of the Partnership;

(b)   may be exercised by the General Partner on behalf of each Special Partner by a facsimile signature or by listing all of the Special Partners executing any instrument with a single signature as attorney and agent for all of them; and

(c)   will extend to and be binding upon the heirs, executors, administrators, legal representatives, successors and assigns of the Special Partners.

Notwithstanding Section 6.1(e), the power of attorney shall continue only as long as the attorney, agent and mandatary is the general partner of the Partnership, and shall terminate thereafter with respect to that attorney, agent and mandatary upon substitution therefor of a replacement general partner of the Partnership, and shall also terminate with respect to a Special Partner on any Transfer by the Special Partner of all of its Partnership Interest except with respect to such actions as are necessary to effect substitution of the transferee or assignee as a Special Partner in the Partnership.

6.3Specific Power and Authority of the General Partner

(a)   Subject to the terms and conditions of this Agreement and subject to obtaining any requisite approval of the GP Board in accordance with the GP Organizational Documents and/or Shareholders Agreement, it is hereby acknowledged and agreed that the General Partner has been authorized to do for or on behalf of or in the name of the Partnership all things which, in its sole judgment, are necessary, proper or desirable to manage and carry on the Business (including the day-to-day business, affairs and undertaking of the Partnership), with the right, power and authority for and on behalf of and in the name of the Partnership, and responsibility and obligation, to:

(i)   maintain proper and complete accounting records for the Partnership, including as required by the Partnership and/or by applicable Law;

(ii)   authorize the payment of operating expenses incurred on behalf of the Partnership in connection with the Business;

(iii)   calculate the amount of allocations and distributions by the Partnership;

(iv)   prepare financial statements, regulatory filings, income tax returns, information returns, compliance reports and financial and accounting information as required by the Partnership and/or by applicable Law;

(v)   ensure that the Partners are provided with financial statements and other reports as are required from time to time by applicable Law or under this Agreement;

(vi)   ensure that the Partnership is operated at a level commensurate with industry standards and, in all cases, complies with all applicable regulatory requirements and applicable Laws (including, without limitation, those related to labour, safety and environmental matters);

(vii)   ensure that the Partnership adopts, and adheres to, the code of conduct governing the operations of BSI (including the portions of such code relating to laws comparable to the United States Foreign Corrupt Practices Act);

(viii)   negotiate and enter into contracts and agreements with third-party providers of services, including attorneys, auditors, contractors and engineers, with respect to the Business;

(ix)   negotiate, execute and perform all agreements which require execution by the Partnership involving matters or transactions with respect to the Business;

(x)   open and manage bank accounts in the name of the Partnership and spend the capital of the Partnership in the exercise of any right or power exercisable by the General Partner hereunder, in connection with the Business;

(xi)   except as expressly limited in this Agreement, incur such liabilities in the name of the Partnership from time to time as the General Partner may determine without limitation with regard to amount, cost or conditions of reimbursement of such liabilities, in connection with the Business;

(xii)   purchase, lease, or otherwise deal with assets and properties for the Business;

(xiii)   transfer, assign, encumber, hypothecate or pledge all or any of the Partnership Property now owned or hereafter acquired, to secure any present and future liabilities and related expenses of the Partnership and to sell all or any of such Partnership Property pursuant to a foreclosure or other realization upon the foregoing transfers, assignments, encumbrances, hypothecations and pledges;

(xiv)   establish cash reserves that are determined to be necessary or appropriate for the proper management and operation of the Partnership;

(xv)   see to the sound management of the Partnership, and manage, control and develop all the activities of the Partnership and take all measures necessary or appropriate for the Business or ancillary thereto;

(xvi)   incur costs and expenses in the name of or for the account of the Partnership, provided, that such costs and expenses are incurred in connection with the Business;

(xvii)   employ, retain, engage or dismiss from employment personnel, counsel, auditors, agents, contractors, subcontractors, engineers, representatives or professionals with the powers and duties, as may be necessary, prudent or advisable in the carrying on of the Business (including, without limitation, pursuant to any services agreement which may be in effect from time to time);

(xviii)   invest cash assets of the Partnership that are not immediately required for the Business in investments which the General Partner considers appropriate;

(xix)   act as attorney in fact or agent and mandatary of the Partnership in disbursing and collecting monies for the Partnership and fulfilling the obligations of the Partnership and handling and settling any claims of the Partnership;

(xx)   commence or defend any act or proceeding in connection with the Partnership (including, subject to Section 19, defend any action taken against the directors and officers of the General Partner);

(xxi)   file returns or other documents required by any governmental, regulatory or like authority;

(xxii)   do anything that is in furtherance or incidental to the Business or that is provided for in this Agreement;

(xxiii)   obtain and maintain insurance coverage (including directors and officers insurance) commensurate with industry standards;

(xxiv)   execute, acknowledge and deliver the documents necessary to effect any or all of the foregoing or otherwise in connection with the Business;

(xxv)   generally carry out the objects, purposes, business and undertaking of the Partnership; and

(xxvi)   provide office facilities and personnel to carry out any of the foregoing acts, functions or services.

6.4Duty of Care

The General Partner shall exercise the powers and authorities and discharge its duties under this Agreement honestly and in good faith, and in the best interests of the Special Partners, and in connection therewith, exercise the degree of care, diligence and skill that a reasonable prudent general partner of a partnership, the principal business and undertaking of which is the Business, would exercise in comparable circumstances. The General Partner shall manage and operate the Partnership in such a manner as to ensure that the limited liability of the Special Partners is retained.

6.5Limitation of Liability

(a)   Neither the General Partner nor any Affiliated Persons thereof nor their respective shareholders, officers, directors, or employees shall be liable, responsible or accountable in damages or otherwise to the Partnership or any Special Partner for any action taken or failure to act on behalf of the Partnership within the scope of the power and authority conferred on the General Partner by this Agreement or by applicable Law unless such action or omission was performed or omitted fraudulently or constituted an intentional or gross fault.

(b)   The General Partner is not personally liable for the return of any Capital Contribution made by a Partner to the Partnership.

(c)   The General Partner may exercise any of the powers or authority granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its mandataries and agents, and the General Partner shall not be responsible for any misconduct or negligence on the part of any such mandatary or agent appointed by the General Partner honestly, in good faith and in the best interests of the Special Partners.

6.6Payments to the General Partner of Expenses

All expenses incurred by the General Partner in managing and operating the Partnership, including the cost of such professional, technical, administrative and other services and advice as it shall deem necessary, shall be paid by the Partnership.

6.7Other Matters Concerning the General Partner

(a)   The General Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed, delivered or presented by the proper Person.

(b)   The General Partner may consult with reputable legal counsel, accountants, investment bankers and other consultants, experts and advisers selected by it, and any act taken or omitted in reliance upon the opinion of such Persons as to matters that the General Partner reasonably believes to be within such Person's professional or expert competence shall be conclusively presumed to have been done or omitted in good faith.

6.8Status and Capacity of the General Partner and the Partnership

The General Partner hereby represents and warrants to and covenants with each Special Partner that:

(a)   Subsistence (General Partner). The General Partner is and will continue to be a valid and subsisting company under the Companies Act (Québec) or such other jurisdiction under which the General Partner may be continued or under which a successor to the General Partner may be formed, incorporated, amalgamated or continued, and has the capacity to own its assets and properties;

(b)   Subsistence (Partnership). The Partnership is, and subject to the provisions of this Agreement, will continue to be, a valid and subsisting limited partnership under the Laws applicable in the Province of Québec or such other jurisdiction under which the Partnership may become registered;

(c)   Capacity (General Partner). The General Partner has the full capacity and authority to act as the general partner of the Partnership, to perform its obligations under this Agreement and to enter into and be bound by this Agreement;

(d)   Capacity (Partnership). The Partnership has the full capacity and authority to perform its obligations under this Agreement and to be bound by this Agreement;

(e)   Residency (General Partner). The General Partner is and will continue to be a "corporationdeemed resident" in Canada for the purposes of the Income Tax Act;

(f)   Activities. The General Partner has not conducted and will not conduct any business or activities other than business or activities related to the business, affairs and undertaking of the Partnership and has no assets or liabilities of any nature other than assets or liabilities acquired in connection with the business, affairs and undertaking of the Partnership (which assets may include Partnership Interest); and the General Partner, while the general partner of the Partnership, will carry on no business and incur no liabilities other than for the purposes set forth in this Agreement or resulting, directly or indirectly, from it being the General Partner;

(g)   Extra-Jurisdictional Registration (Partnership). The Partnership is, and will continue to be, qualified to carry on business in any jurisdiction in which the Partnership carries on business if such qualification is required under the laws of that jurisdiction;

(h)   Extra-Jurisdictional Registration (General Partner). The General Partner holds and will maintain the registrations necessary for the conduct of its business and has and will continue to have all licenses and permits necessary to carry on its business as the general partner of the Partnership in all jurisdictions where the activities of the General Partner or the Partnership require licensing or some other form of registration of the General Partner;

(i)   Authorizations. This Agreement has been duly authorized, executed and delivered by the General Partner;

(j)   No Conflict. The signing, delivery and performance by the General Partner of this Agreement do not violate any of the articles, by-laws or other constating documents of the General Partner, or any agreements to which it is a party or any applicable Law, except for such violations which would not have a material adverse effect on the Partners or the Partnership;

(k)   Legally Binding. This Agreement constitutes legal, valid and binding obligations of the General Partner, enforceable against it in accordance with its terms;

(l)   No Bankruptcy or Insolvency. The General Partner is not bankrupt or Insolvent and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming bankrupt or Insolvent; and

(m)   Legal Proceedings. There is not pending against the General Partner or, to its knowledge, threatened against it any legal proceedings that could have a material adverse effect on the Partners or the Partnership.

The General Partner hereby covenants and agrees that it will not change its status as represented and warranted herein and shall promptly provide evidence of such status to any Special Partner that may reasonably request such evidence.

6.9Insurance

The General Partner, at the expense of the Partnership, shall, subject to any requisite approval of the GP Board under the GP Organizational Documents and/or Shareholders Agreement, at all times maintain or cause to be maintained public liability insurance and "all risks" physical loss or damage insurance against all Partnership Property and such other insurance, in such amount and type as is customary for a business similar to the Business and as is otherwise deemed by the General Partner to be prudent in the circumstances.

6.10Transactions Involving the General Partner and its Controlled Affiliated Persons

Subject to the other provisions of this Agreement and the Shareholders Agreement, the validity of a transaction, agreement or payment involving the Partnership, on the one hand, and the General Partner and/or its Controlled Affiliated Persons, on the other hand, shall not be affected by reason of the relationship between the Partnership, the General Partner and its Controlled Affiliated Persons, including by reason of the approval of the transaction, agreement or payment by the directors of the General Partner, all of whom may be officers or directors of or otherwise interested in or related to the Controlled Affiliated Person.

6.11Safekeeping of Assets

The General Partner is responsible for the safekeeping and use of all Partnership Property, whether or not in its immediate possession or control, and will not employ or permit another Person to employ or use Partnership Property except for the exclusive benefit of the Partnership.

6.12Payments

The General Partner shall pay or cause to be paid out of the funds of the Partnership, on hand or borrowed for the purpose of the Business, costs or expenses as and when they become due.

6.13Restrictions upon the General Partner

The General Partner's power and authority does not extend to any matter, power, action or authority set forth in Section 7.8 of the Shareholders Agreement, unless and until the requisite approval of the GP Board is obtained in accordance with the Shareholders Agreement and/or the GP Organizational Documents.

6.14Prohibition from Commingling Funds

The funds of the Partnership shall not be commingled with the funds of the General Partner or any other Person.

ARTICLE 7

THE SPECIAL PARTNERS

7.1Status and Capacity of the Special Partners

Each Special Partner hereby represents and warrants to and covenants with the General Partner and each other Special Partner that, as of the date hereof:

(a)   Subsistence. It is duly formed, constituted, created, incorporated, amalgamated or continued, as the case may be, and validly existing under the laws of its jurisdiction of formation, constitution, creation, incorporation, amalgamation or continuation, as the case may be, and it has the capacity to own its assets and properties;

(b)   Capacity. It has the capacity and authority to enter into and be bound by this Agreement;

(c)   Residency. It is and will continue to be (i) "resident" in Canada for the purposes of the Income Tax Act or (ii) a "Canadian partnership" within the meaning of the Income Tax Act;

(d)   Authorizations. This Agreement has been duly authorized, executed and delivered by it;

(e)   No Conflict. The signing, delivery and performance by it of this Agreement do not violate any of its articles, by-laws or other constating documents, or any agreements to which it is a party or any applicable Law, except for such violations which would not have a material adverse effect on the Partnership or the Partners;

(f)   Legally Binding. This Agreement constitutes legal, valid and binding obligations of such Special Partner, enforceable against it in accordance with its terms;

(g)   No Bankruptcy or Insolvency. It is neither bankrupt nor Insolvent, and there are no proceedings pending or being contemplated by it, and/or to its knowledge, threatened against it, which would result in it being or becoming bankrupt or Insolvent;

(h)   Legal Proceedings. There is not pending or, to its knowledge, threatened against it any legal proceedings that could have a material adverse effect on the Partnership or the Partners; and

(i)   Title to Partnership Interest. It owns the Partnership Interest registered in its name free and clear of any Security Interest other than Security Interest permitted by Section 9.1.

Each Special Partner hereby covenants and agrees that it shall not change its status under Sections 7.1(b) and 7.1(g) as represented and warranted herein, shall promptly provide evidence of its status under Section 7.1(b) to the General Partner upon reasonable request and shall not Transfer its Partnership Interest or any part thereof to any Person which would be unable to make the representations and warranties set forth in this Section 7.1.

7.2Competing Businesses

Each Special Partner agrees that, except as expressly provided in this Agreement, the Framework Agreement, the Shareholders Agreement or the Supply Agreement, no Special Partner shall have any duty to disclose any information to the Partnership or permit the Partnership to participate in any projects or investments or any other opportunity that may be of interest to the Partnership if it were aware of such information or opportunity, and GP hereby waives, on behalf of the Partnership to the extent permitted by law, any claim based on the corporate opportunity doctrine or any similar legal doctrine. The Special Partners agree that, subject to fulfillment of their obligations in this Agreement, the Framework Agreement, the Shareholders Agreement and the Supply Agreement, any Special Partner may compete or engage in activities that are competitive, directly or indirectly, with the Partnership or any other Special Partner. Notwithstanding the foregoing, whenever this Agreement requires any Person (including GP and the GP Board) to make any determination or take any action in "good faith", such requirement shall include the obligation to not favour any Special Partner over any other Special Partner.

ARTICLE 8

CAPITAL

8.1Capital

The Partnership may issue an unlimited number of Units. The interests of the Partners in the assets, profits and losses of the Partnership shall be divided into and represented by Units issued in accordance with this Agreement, each representing a proportionate share of the aggregate interests of the Partners in the assets, profits and losses of the Partnership.

8.2Attributes of the Units

Except as otherwise expressly provided herein, each Unit shall be non-transferable and non-redeemable. To the fullest extent permitted under applicable Law, each of the Special Partners hereby waives its rights under Article 2241 of the Civil Code with respect to the withdrawal of capital contributions. Each Unit shall be identical to all other Units in all respects and, accordingly, shall entitle the holder to the same rights and obligations as a holder of any other Unit; provided, however, that each Partner hereby acknowledges and agrees that the ownership of Units by the Special Partners shall not in any event affect the status and rights and obligations pursuant to this Agreement of the Special Partners as special partners of the Partnership, notwithstanding the fact that the Units held by the Special Partners have the same attributes as the Units held by the General Partner.  Each Unit is a security for the purposes of An Act respecting the transfer of securities and the establishment of security entitlements (Québec).

For greater certainty and subject to and without limiting any other provisions of this Agreement, each Unit shall have equal voting, distribution, liquidation and other rights and shall have no preference, conversion, exchange, pre-emptive or redemption rights.

8.3Units Fully-Paid and Non-Assessable

The Partnership shall issue Units only as fully-paid and non-assessable.

8.4[Reserved]

8.5Individual Capital Accounts

An individual capital account shall be maintained for each Partner and shall be credited with the amount of its Capital Contribution to the Partnership. Each capital account shall be maintained in Canadian currency for tax, accounting and any other purpose.  Any Capital Contribution in United States currency by DCC LP Canco is to be converted to Canadian currency in its capital account on the date hereof using a United States dollar/Canadian dollar exchange rate equal to the internal rate of Dow Corning Corporation as at September 30, 2010. No Partner shall be entitled to withdraw any part of its capital account or to receive any Distribution except as provided or permitted in this Agreement. The Partnership Interest of a Partner shall not terminate by reason of there being a negative or a zero balance in its capital account. The Partners shall not be entitled to interest on any amounts standing to their credit in the capital accounts of the Partnership.

8.6Units Issued and Outstanding

The following table sets out the name of the holder of Units, the number of Units held by each such Person and the Pro Rata Share held by each such Person, as at the date hereof following the DCC LP Canco Unit Acquisition:

Name of holder of Units	Number of Units held by each such Partner	Pro Rata Share held by each such Partner
GP	10	.01%
BSI	51,000	50.9949%
DCC LP Canco	49,000	48.9951%
TOTAL	100,010	100%

8.7Admission of Additional Partners

No Person shall be admitted to the Partnership as either a Special Partner or a General Partner without approval by a Unanimous Resolution or otherwise as expressly permitted under this Agreement or the Shareholders Agreement.

8.8Additional Units

No additional Units may be issued without approval by a Unanimous Resolution or otherwise as expressly provided in this Agreement or the Shareholders Agreement.

8.9Registrar and Transfer Agent; and Amendments to the Register

The General Partner shall act as registrar and transfer agent for the Partnership and shall maintain such books and records as are necessary and appropriate to record the names and domicile of the Special Partners, the number of Units held by each Special Partner, any information concerning their contributions to the common stock of the Partnership, any advances made by the Special Partners to the Partnership, particulars of any transfers of Units, and such other information which the General Partner is required to keep under the Civil Code. Without limiting the generality of the foregoing, the General Partner shall promptly register and give effect to all Transfers which are permitted under this Agreement (including additions, removals and amendments required to be made to the Register and the Declaration which result therefrom), proceed with the issuance of all Units resulting therefrom and ensure that a Register is maintained in accordance with the Civil Code and the Partnership Publicity Act. The said registrar and transfer agent shall perform all duties usually and customarily performed by transfer agents and registrars of certificates of shares in a corporation, except as the same may be modified or adapted to take into consideration the existence of units, instead of shares, and a partnership instead of a corporation.

8.10Inspection of Register

The General Partner shall permit any Special Partner or its agent duly appointed in writing at the expense of the Special Partner to inspect the Register at any reasonable time during normal business hours.

8.11Certificates

The form of certificate evidencing a Unit shall be in such form as is from time to time approved by the General Partner and shall be signed by the General Partner. Every Partner shall be entitled to receive a certificate evidencing the Units of such Partner. Each certificate shall be endorsed with a legend to the effect that the Units evidenced thereby may not be sold, exchanged, transferred, assigned, donated, encumbered, hypothecated, mortgaged, pledged, alienated or monetized except as permitted under this Agreement.

8.12Lost Certificates

Where a Partner claims that the certificate for its Units has been defaced, lost, destroyed or wrongly taken, the registrar and transfer agent shall cause a new certificate to be issued in substitution for the original certificate if the Partner satisfies such other reasonable requirements imposed by the registrar and transfer agent including a requirement to deliver a form of proof of loss and an indemnity.

8.13Effect of Registration

The receipt by the Person in whose name any Unit is recorded on the Register shall be a sufficient discharge for all monies, securities and other property payable, issuable or deliverable in respect of such Unit and from all liability therefor. The Partnership and the General Partner are entitled to treat the Person in whose name a Unit is registered as the absolute owner thereof.

8.14Retirement of Note

Promptly following the execution of this Agreement and the issuance of LP Interests to DCC LP Company, the Partnership shall pay to BSI US $40,254,751, in full satisfaction of the Note.

ARTICLE 9

SECURITY INTERESTS

9.1Limitation on Security Interests

Except (i) for Security Interests created in favour of Affiliates, (ii) as otherwise provided in Section 9.2, (iii) with approval by Unanimous Resolution or (iv) for Security Interests the creation of which would not constitute a Transfer pursuant to the definition thereof, no Partner shall create or suffer to be created any Security Interest on any of its Partnership Interest, its rights under this Agreement, the Shareholders Agreement or the Supply Agreement. Any purported Security Interest that is not in compliance with this Section 9.1 shall be void as between the Partners and the Partnership.

9.2Security Interest by Operation of Law

Section 9.1 shall not apply to any Security Interest on the Partnership Interests or the rights under this Agreement or the Shareholders Agreement or the Supply Agreement arising from or imposed by any applicable Law which secures payment or performance by any Partner of any obligations that are not overdue, delinquent or payable.

ARTICLE 10

TRANSFER OF PARTNERSHIP INTEREST

10.1Prohibition on Transfer

Notwithstanding Article 2243 of the Civil Code, for a period of five years after the date hereof, no Partner shall Transfer all or any part of its Partnership Interest except with the prior written agreement of all of the other Partners (which consent may be withheld for any or no reason), except as provided in Section 10.8. In addition, no Partner may at any time Transfer less than all of its Partnership Interest. All permitted Transfers (other than Transfers contemplated by Section 10.8) are subject to a corresponding Transfer of all of a Partner's (or, as applicable, one of its Affiliate's) GP Shares and, except as otherwise expressly provided, its (or, as applicable, one of its Affiliate's) rights and obligations under the Supply Agreement.

10.2No Violation of Applicable Laws

Notwithstanding anything herein to the contrary, no Partner shall be entitled to Transfer any Partnership Interest at any time if such Transfer would violate applicable Laws.

10.3Transfers in Violation of this Agreement

Any purported Transfer by a Partner of all or any part of its Partnership Interest (and its, or, as applicable, an Affiliate's, rights under the Supply Agreement) other than in accordance with this Agreement shall be null and void, and the General Partner shall refuse to recognize any such Transfer of such Partnership Interest (and rights under the Supply Agreement) for any purpose and shall not reflect in the Register any change in ownership of such Partnership Interest pursuant to any such Transfer. Any Partner purporting to make a Transfer of all or any part of its Partnership Interest which is null and void pursuant to this Agreement shall (until such time as such Partner agrees in a writing executed by such Partner and delivered to the Partnership that such purported Transfer is rescinded and shall have no force or effect) cease to have any rights and powers otherwise provided to such Partner pursuant to this Agreement with respect to the Partnership, except that such Partner shall have the right to share in such profits and losses, to receive such Distributions, and to receive such allocation of income, gain, loss, deduction, or credit or similar item to which such Partner is otherwise entitled pursuant to this Agreement. Any purported Transferee of a Transfer which is null and void pursuant to this Agreement shall have no rights or powers with respect to the Partnership pursuant to this Agreement.

10.4Rights of First Refusal

Following the five-year period immediately following the date hereof, if a Special Partner desires to Transfer all (but not less than all) of its Partnership Interest and all (but not less than all) of its (or one of its Affiliate's) GP Shares and such Partner shall have received a bona fide written proposal from a third party to acquire its Partnership Interest and its (or one of its Affiliate's) GP Shares and its rights under the Supply Agreement which otherwise complies with the terms of this Agreement (a "Third Party Offer"), then the Transfer shall be permitted as provided herein, subject to a right of first refusal in favor of the other Special Partner in accordance with the following provisions:

(a)   The transferring Special Partner shall provide the other Special Partner having a right of first refusal under this Section 10.4 with written notice (an "Offer Notice") of its desire to Transfer its Partnership Interest. The Offer Notice shall state that such Special Partner wishes to Transfer its Partnership Interest, the name and identity of the transferees, the proposed purchase price for its Partnership Interest and any other terms and conditions material to the sale set forth in the bona fide offer and contain a copy of the bona fide offer.

(b)   The other Special Partner shall have a period of up to 30 days following receipt of an Offer Notice from the transferring Special Partner to elect to purchase (or to cause one of its Affiliates to elect to purchase) all of such transferring Special Partner's Partnership Interest and to acquire all of the transferring Special Partner's (or, if applicable, its Affiliate's) related rights under the Supply Agreement on the terms and conditions set forth in the Offer Notice, by delivering to the transferring Special Partner a written notice of such election.

(c)   If the Special Partner elects to purchase (or to cause one or more of its Affiliates to elect to purchase) all of the Partnership Interest and to acquire the related rights under the Supply Agreement which are the subject of the Third-Party Offer, on the terms and conditions set forth in the Offer Notice within the applicable 30-day period, such purchase shall be consummated within three months (or such longer period as may be reasonably required to obtain any necessary regulatory approval) after the date on which the purchasing Special Partner notifies the transferring Special Partner of such election.

(d)   If neither the other Special Partner nor any of its Affiliates elects to purchase, in the aggregate, all of the transferring Special Partner's Partnership Interest and to acquire its rights under the Supply Agreement on such terms and conditions within such initial 30-day period, the transferring Special Partner and, as applicable, its Affiliate, may Transfer such Partnership Interest and rights under the Supply Agreement to the proposed transferee at any time within six months following such period on terms and conditions, including purchase price, no more favorable to the transferee than those specified in the Offer Notice.

(e)   For the avoidance of doubt, references in this Section 10.4 to the Partnership Interest of a Partner shall also include all GP Shares directly or indirectly owned by such Partner (or its Affiliates), as well as all direct and indirect rights of such Partner in the Supply Agreement.

10.5Tag Along Rights

If, following the five-year period immediately following the date hereof and after complying with the conditions of Section 10.4, a Special Partner proposes to accept a Third-Party Offer, the other Special Partner may exercise tag-along rights with respect to its Partnership Interest in accordance with the following provisions (any such Special Partner exercising such rights, a "Tagging Partner").

(a)   The Tagging Partner shall have a period of 10 days following the expiration of the period in which it must determine whether to elect to purchase all of the transferring Partner's Partnership Interest pursuant to Section 10.4(b) within which to elect (and if so, to provide the transferring Partner with an irrevocable written notice to that effect) to sell its Partnership Interest on the same terms, conditions and price per Unit to the proposed Transferee. If the transferring Partner is unable to cause the proposed Transferee to purchase all the Partnership Interests proposed to be Transferred by the transferring Partner and the Tagging Partner, then the transferring Partner may not make such Transfer. The transferring Partner shall have a period of 60 days following the expiration of the 10-day period mentioned above to sell all the Partnership Interests agreed to be purchased by the Transferee, on the payment terms specified in the Third-Party Offer. The sale of the Tagging Partners' Partnership Interest shall occur simultaneously with the sale of the transferring Partners' Partnership Interest.

(b)   The Tagging Partner shall agree to (i) make substantially the same representations and warranties to the Transferee with respect to itself and related items as the transferring Partner makes with respect to itself and related items in connection with the Transfer, (ii) substantially the same covenants, indemnities and agreements with respect to itself and related items as agreed by the transferring Partner with respect to themselves and related items in connection with the Transfer (other than any non-competition or similar agreements or covenants that would bind such Tagging Partner or its Affiliates), and (iii) substantially the same terms and conditions to the Transfer of Partnership Interests as the transferring Partner agrees. Notwithstanding the foregoing, however, all such representations, warranties, covenants, indemnities and agreements shall be made by the Tagging Partner and the transferring Partner severally and not jointly. Notwithstanding anything herein to the contrary, there shall be no liability on the part of the transferring Partner in the event that the proposed Transfer shall not be consummated for whatever reason. Whether a sale of the Partnership Interest is effected by a transferring Partner shall be in the sole discretion of such transferring Partner.

(c)   For the avoidance of doubt, references in this Section 10.5 to the Partnership Interest of a Partner shall also include all GP Shares directly or indirectly owned by such Partner (or its Affiliates), as well as all direct and indirect rights of such Partner (or its Affiliates) in the Supply Agreement.

10.6Put Rights Upon a Change of Control Event

A put right in favor of the Series B Partner with respect to its Partnership Interest (including, for these purposes, any direct or indirect interest in GP held by it or its Affiliates) shall be applicable in accordance with the following provisions if BSI Parent or a Change of Control Member is the subject of a Change of Control Event.

(a)   In the event that the Series B Partner elects to sell its Partnership Interest to the Series A Partner in accordance with this Section 10.6, the Series B Partner (or its Affiliate) shall have the right, at its sole option, to retain all or any portion of its rights (and the corresponding obligations) under the Supply Agreement for a period of up to two years, with any amendments or modifications as may be mutually agreed to by the Partners.

(b)   Not later than two Business Days following either (x) the execution of a definitive agreement providing for a Change of Control Event or (y) in the event there is no definitive agreement for the Change of Control Event or the Change of Control Event occurs without the consent of the board of directors of BSI Parent or the Change of Control Member, receipt of notice by BSI Parent or the Change of Control Member of the occurrence of a Change of Control Event, BSI Parent shall, or shall cause the Change of Control Member to, as applicable, provide the Series B Partner and the GP Board with written notice (a "Put Notice") describing in reasonable detail the material terms of a contemplated Change of Control Event or all material information with respect to the Change of Control Event. In the event the Series B Partner is interested in the possibility of selling its Partnership Interest to the Series A Partner, the Series B Partner shall notify BSI Parent or such Change of Control Member, as applicable, that it wishes to consider such a sale of its Partnership Interest in the manner described below in this Section, provided that such notice must be provided within 30 Business Days of the date the Series B Partner received the Put Notice (the date that such notice of consideration of a sale is provided by the Series B Member, the "Put Trigger Date"). BSI Parent shall use its reasonable efforts to, or cause Change of Control Member to use its reasonable efforts to, as applicable, make available to the Series B Partner representatives of the other party to the Change of Control Event.

(c)   During the 15-day period following the Put Trigger Date, the Series B Partner and BSI Parent or Change of Control Member, as applicable, will negotiate in good faith to determine the fair market value (the "Valuation Price") of the Series B Partner's Partnership Interest. If the Series B Partner and BSI Parent or Change of Control Parent, as applicable, agree on such valuation, then such agreed-upon amount shall be the Valuation Price. If the Series B Partner and BSI Parent or Change of Control Member, as applicable, are unable to agree on such valuation by the end of such discussion period, such parties shall submit such valuation for determination by appraisal pursuant to the procedures set forth in Section 21.4. The Partnership and the General Partner shall make available to the Series B Partner and BSI Parent or Change of Control Member, as applicable, such information that may be reasonably requested by either of them for the purposes of making this determination.

(d)   The Series B Partner shall have up to 15 days following the determination of the Valuation Price to elect to sell (or to cause an Affiliate to elect to sell) all of its Partnership Interest to the Series A Partner for an amount in cash equal to the Valuation Price by delivering to BSI Parent or Change of Control Member, as applicable, a written notice of such election within such 15-day period.

(e)   If the Series B Partner elects to sell its Partnership Interest to the Series A Partner, the closing of the sale of its Partnership Interest, for an amount in cash equal to the Valuation Price, shall occur within 30 days of delivery to BSI Parent or Change of Control Member, as applicable, of the written notice of such election as provided in Section 10.6(d), or such longer period as may be required to permit receipt of any required regulatory approval and such closing shall be conditioned on the closing of the Change of Control Event (to the extent that such Change of Control Event has not already occurred). At the closing of the transactions contemplated by this Section 10.6, the Partners, the Partnership and the General Partner shall execute all documents reasonably required to effectuate such transactions. Notwithstanding anything herein to the contrary, there shall be no liability on the part of BSI Parent or Change of Control Member, as applicable, in the event that the Change of Control Event shall not be consummated for whatever reason, and whether BSI Parent or a Change of Control Member consummates a transaction constituting a Change of Control Event shall be in the sole discretion of BSI Parent or such Change of Control Member, as applicable.

10.7Other Call Rights

A Special Partner or one of its Affiliates (the "Calling Partner") shall be entitled to exercise rights ("Call Rights") to purchase all of the Partnership Interest of the other Special Partner (the "Selling Partner"), together with all rights of the Selling Partner and its Affiliates under the Supply Agreement (the "Called Interests"), at a price equal to the Valuation Price of the Called Interests as follows:

(a)   The Series B Partner shall have Call Rights upon any failure by the Series A Partner, following timely delivery by the Series B Partner of notice of its intent to sell its Partnership Interest pursuant to Section 10.6(d), to comply with its obligations under Section 10.6 within the 30-day period provided for in Section 10.6(e); provided that, following such sale, the Series A Partner (or its Affiliate) shall have the right, at its sole option, to retain all or any portion of its rights (and the corresponding obligations) under the Supply Agreement for a period of up to two years, with any amendments or modifications as may be mutually agreed to by the Partners.

(b)   A Special Partner shall have Call Rights upon any continuing and material failure by the other Special Partner or its Affiliates to (a) pay for output taken under the Supply Agreement or (b) make the Partnership whole for a failure to take output under the Supply Agreement, all in accordance with the terms of the Supply Agreement; provided, that, if such failure to pay or make whole is as a result of a dispute as to the amount due, such Call Right shall not be exercisable unless and until the dispute is resolved in accordance with the dispute resolution procedures set forth in the Supply Agreement and such Special Partner remains in default.

(c)   If a Special Partner elects to call (or to cause one of its Affiliates to elect to call) the Called Interests as permitted hereunder, the closing of the sale of the Called Interests, for an amount in cash equal to the Called Interests Valuation Price, shall occur within 30 days of delivery to the Selling Partner of a written notice of such election, or such longer period as may be required to permit receipt of any required regulatory approval. At the closing of the transactions contemplated hereby, the Partners, the Partnership and the General Partner and their applicable Affiliates shall execute all documents reasonably required to effectuate such transactions, including, as applicable, the substitution of the Calling Partner (or its Affiliate) as the Partner in the Partnership, the shareholder in the General Partner and the party entitled to all of the Selling Partner's output under the Supply Agreement.

(d)   During the 30-day period following notification from the Calling Partner under Section 10.7(c), the Special Partners will negotiate in good faith to determine the fair market value of the Called Interests (the "Called Interests Valuation Price"). If the Special Partners agree on such valuation, then such agreed-upon amount shall be the Called Interests Valuation Price. If the Special Partners are unable to agree on such valuation by the end of such discussion period, such parties shall submit such valuation for determination by appraisal pursuant to the procedures set forth in Section 21.4. The Partnership and the General Partner shall make available to the Special Partners such information that may be reasonably requested by either of them for the purposes of making this determination.

10.8Transfers to Affiliates

Notwithstanding anything herein to the contrary, any Partner may Transfer any Partnership Interest to an Affiliate of such Partner, other than any Affiliate that is a non-resident of Canada, unless all the Special Partners agree otherwise. Any Transfer pursuant to this Section 10.8 need not result in a Transfer of all of such Partner's rights under the Supply Agreement.

10.9Rights and Obligations of Transferees

Any Transferee of a Partnership Interest pursuant to a Transfer made in accordance with this Agreement shall be required, at the time of and as a condition to such permitted Transfer, to become a party to this Agreement by executing and delivering such documents as may be necessary, in the reasonable opinion of the non-transferring Partner, to effect such matters, whereupon such Transferee will be admitted as a Partner for all purposes of this Agreement. Upon such permitted Transfer and admission, such Transferee shall be entitled to receive distributions and allocations of income, gain, loss, deduction, credit or similar items to which the transferring Partner would be entitled with respect to such Units and shall be entitled to exercise any of the other rights of a Partner with respect to such transferring Partner's Partnership Interest.

10.10Expenses Relating to Transfer

Any Partner that proposes to Transfer its Partnership Interest in accordance with the terms and conditions of this Agreement shall be responsible for any expenses incurred by the General Partner, as the case may be, in connection with such Transfer.

10.11Application to Affiliates

For the purposes of this Article 10, reference to a Special Partner shall mean a Special Partner and any of its Affiliates that holds Units issued to it by the Partnership or transferred to it by an Affiliate in accordance with this Agreement.

ARTICLE 11

RESIGNATION OR REMOVAL OF GENERAL PARTNER

11.1Resignation or Withdrawal of the General Partner

The General Partner shall not be permitted to resign or withdraw as general partner of the Partnership unless it gives 30 days' advance written notice to the Partnership and to the Special Partners, and such resignation or withdrawal is accepted by all the Special Partners.

11.2Removal of the General Partner

Save and except as herein provided, the General Partner may only be removed or replaced as general partner, and a new general partner may be appointed, by unanimous consent of the Special Partners.

Upon the passing of any resolution of the directors or shareholders of the General Partner requiring or relating to the bankruptcy, dissolution, liquidation or winding-up or the making of any assignment for the benefit of creditors of the General Partner, or the filing of a proposal or a notice of intention to file a proposal under the Bankruptcy and Insolvency Act (Canada) or any successor legislation or any similar legislation of any applicable jurisdiction or the application for an order under the Companies' Creditors Arrangement Act (Canada) or any similar legislation of any applicable jurisdiction, or upon the appointment of a receiver of the assets and undertaking of the General Partner, or upon the General Partner failing to maintain its status under Section 6.8, the General Partner shall cease to be qualified to act as general partner hereunder and shall be deemed to have been removed thereupon as the general partner of the Partnership effective upon the appointment of a new general partner. The Insolvency or bankruptcy of the General Partner shall not cause the Partnership to be dissolved or terminated and such Insolvency or bankruptcy shall not be a ground for applying to any court of competent jurisdiction to have the Partnership wound up or dissolved or its interest in the Partnership Property partitioned. A new general partner shall, in such instances, be appointed by the Special Partners in accordance with the provisions of Section 13.5 after receipt of written notice of such event (which written notice shall be provided by the General Partner forthwith upon the occurrence of such event).

The General Partner may also be removed if the General Partner has committed a material breach of this Agreement or any other material agreement now or hereafter entered between the General Partner, in its capacity of general partner of the Partnership, and all of the Special Partners, in their capacity as special partners of the Partnership, which breach subsists for a period of 30 days after notice, and if such removal is approved by the Special Partners; provided, however, that in the event the default is incapable of being cured in 30 days, the General Partner may not be removed if it commences to cure the default within such 30-day period and diligently pursues such curative measures. Any such action by the Special Partners for removal of the General Partner under this Section 11.2 must also provide for the election and succession of a new general partner. Such removal shall be effective immediately following the admission of the successor general partner to the Partnership.

11.3Transfer of Management and Title to New General Partner

On the admission of a new general partner to the Partnership or the resignation, removal or withdrawal of the General Partner, the outgoing general partner of the Partnership shall (i) do all things and shall take all steps to immediately and effectively transfer the administration, management and operation, assets, property, books, records and accounts of the Partnership to the new general partner of the Partnership including the execution of all registrations, bills of sale, certificates, declarations and other documents whatsoever which may be necessary to effect such change and to convey all Partnership Property held by the General Partner to the new general partner of the Partnership and (ii) assign to the new general partner all Units owned by the resigning general partner, for the fair market value thereof as determined by the auditors of the Partnership. All costs of such transfer shall be for the account of the Partnership.

11.4Condition Precedent

As a condition precedent to the resignation or removal of the General Partner, the Partnership shall pay all amounts payable by the Partnership to the General Partner pursuant to this Agreement accrued to the date of resignation or removal.

11.5Successor

In the event of a change of general partner of the Partnership, the new general partner of the Partnership shall execute a counterpart of this Agreement and enter into a new shareholders agreement with the shareholders of the new general partner which is otherwise identical to the Shareholders Agreement (the "New Shareholders Agreement") and shall from that time forward, for all purposes and in all ways, assume the liabilities, duties and obligations of the General Partner under this Agreement and shall be subject to the terms of this Agreement and the New Shareholders Agreement as of and from the effective time the new general partner becomes a party to this Agreement and the New Shareholders Agreement. A new general partner shall either be (i) "resident" in Canada for the purposes of the Income Tax Act or (ii) a "Canadian partnership" within the meaning of the Income Tax Act.

11.6Release

Upon the resignation, removal or withdrawal of the General Partner, the Partnership and the Special Partners shall release and hold harmless the General Partner from all actions, claims, costs, demands, losses, damages and expenses suffered or incurred by the General Partner as a result of or arising out of events (other than all actions, claims, costs, demands, losses, damages and expenses which relate to the period prior to the resignation, removal or withdrawal) which occur in relation to the Partnership after the effective time of such resignation, removal or withdrawal.

ARTICLE 12

ALLOCATIONS AND DISTRIBUTIONS

12.1Allocation of Profits and Losses

All items of income, gain, loss, deduction, credit and capital and other allocable items for tax and accounting purposes shall be allocated to the Partners (including Persons who were Partners at any time during the relevant Fiscal Year and were no longer Partners at the end of such Fiscal Year) at the end of each Fiscal Year in accordance with the following rules:

(a)   if there has been no change in the Pro-Rata Shares of the Partners during such Fiscal Year, such allocation will be based upon each Partner's Pro-Rata Share at the end of such year; and

(b)   if there has been any change in the Pro-Rata Shares of the Partners during such Fiscal Year, such allocations shall be based upon the assumptions:

(i)   that, for the purposes of the Income Tax Act, a new fiscal period of the Partnership had commenced at the time of each such change and the current fiscal period had ended immediately before such change,

(ii)   that any allocable item determined on a periodic basis was notionally allocated between such notional fiscal periods based on the number of days in each notional fiscal period and any other allocable item was allocated treating each such notional fiscal period as a separate fiscal year,

(iii)   that notional allocations were made in respect of each such notional fiscal period based on the respective Pro-Rata Shares of the Partners at the end of each such notional fiscal period, and

(iv)   that each Partner was allocated for such Fiscal Year the aggregate net amount of such notional allocations.

12.2United States Federal Income Tax Allocations

All items of income, gain, loss, deduction, and credit shall, for each Fiscal Year, be allocated, for United States federal income tax purposes, to the Partners in the same manner as such items were allocated to the Partners pursuant to Section 12.1; provided, however, that any such item with respect to property contributed to the Partnership, at a time in which there was a difference between the adjusted basis and the fair market value of such property for United States federal income tax purposes, shall be allocated in accordance with Section 704(c) of the Code and the Treasury Regulations promulgated thereunder as determined by the GP Board, taking into account the provisions of Treasury Regulations Section 1.704-3(a)(2); and further provided, that any such item with respect to property, or any portion thereof, that is treated as contributed by the Series A Partner to the Partnership on or prior to the date hereof for United States federal income tax purposes after taking into account the Treasury Regulations promulgated under Section 707 of the Code shall be allocated in accordance with the traditional method with curative allocations or with the remedial allocation method set forth in Treasury Regulations Section 1.704-3(c) and (d), respectively, as instructed by the Series B Partner. The Partners acknowledge that they are aware of the United States federal income tax consequences of the allocations made by this Section 12.2 and hereby agree to be bound by the provisions of this Section 12.2 in reporting their respective shares of items of Partnership income, gain, loss, deduction and expense.

12.3Annual Tax Distribution

On or before the sixtieth day following the end of the Fiscal Year, to the extent that the Partnership has sufficient Distributable Cash, the Partnership shall distribute to each Partner Distributable Cash in an amount equal to the product of (i) the income earned by the Partnership during such Fiscal Year and allocable to the Partner in accordance with Section 12.1 and (ii) the highest of the effective tax rates applicable to either of the Partners for such Fiscal Year (unless the Partners agree by a Unanimous Resolution on a different rate).

12.4Quarterly Advances of Distributable Cash

At the written request of any Partner, on or before the thirtieth day following the end of each Fiscal Quarter of a particular Fiscal Year, to the extent that the Partnership has sufficient Distributable Cash in respect of that particular Fiscal Quarter, the Partnership shall make advances to each Partner by way of non-interest bearing loans (each an "Advance"). The Advance to each Partner shall be equal to the product of (i) the higher of (a) the estimated income earned by the Partnership during the particular Fiscal Year and allocable to the Partner in accordance with Section 12.1 and (b) the income earned by the Partnership during the previous Fiscal Year and allocable to the Partner in accordance with Section 12.1, (ii) the highest of the effective tax rates applicable to either of the Partners for such Fiscal Year (unless the Partners agree by a Unanimous Resolution on a different rate), and (iii) ¼. If the Partnership does not have sufficient Distributable Cash in respect of a particular Fiscal Quarter to make Advances to all the Partners, the Partnership shall only make an Advance to each Partner equal to their Pro Rata Share of the Distributable Cash for that Fiscal Quarter. Any such shortfall shall be advanced, without duplication, in the immediately succeeding Fiscal Quarter(s) of the particular Fiscal Year, to the extent that the Partnership has sufficient Distributable Cash in respect of those succeeding Fiscal Quarter(s).

12.5Special Distributions

Promptly following receipt of any additional contribution by a Special Partner pursuant to Sections 2.3, 2.4 or 9.5 of the Framework Agreement, the Partnership shall make a special distribution of any such amount, as a return of capital, to the other Special Partner, as the case may be.

12.6Other Distributions of Distributable Cash

Any Distributions to the Partners other than those provided at Sections 12.3 and 12.5 shall be made at such times and in such amounts as the GP Board shall determine in its sole discretion and in accordance with the Shareholders Agreement and the GP Organizational Documents, pro rata to the Partners based on their Pro-Rata Shares at the date designated by the GP Board.

12.7Auditor's Determination

Absent manifest error, the opinion of the auditor retained by the Partnership from time to time shall be final and binding with respect to all computations and determinations required to be made under this Article 12.

12.8Return of Capital Contribution

Except as set forth in this Agreement, no Partner shall have the right to demand a return prior to the winding-up, liquidation or dissolution of the Partnership of its Capital Contribution.

12.9Repayments

If, as determined by the auditor of the Partnership, it appears that any Partner has received an amount which is in excess of its entitlement, such Partner shall forthwith reimburse the Partnership to the extent of such excess upon notice by the General Partner.

12.10Negative Distributable Cash

If the GP determines that there is Negative Distributable Cash at the end of any Fiscal Quarter of a particular Fiscal Year or at the end of a Fiscal Year, then each Partner shall repay the Advances previously made in respect of such Fiscal Year in an amount not exceeding each Partner's Pro-Rata Share of such amount of Negative Distributable Cash, within 10 days of such determination.

12.11Offset

Whenever the Partnership is to pay any sum to any Partner by way of Distribution or otherwise, any amounts such Partner owes the Partnership or any of its Affiliates pursuant to this Agreement (including Advances), as determined by the GP Board in its good faith reasonable judgment, may be deducted from such sum before payment, to the extent permitted by applicable Law, and the amount so deducted shall be treated as distributed to such Partner for purposes of this Agreement.

12.12Capital Cost Allowance

In connection with the determination of the net income for income tax purposes of the Partnership for each fiscal period, the General Partner shall cause the Partnership to claim the maximum amount allowable in each year for income tax purposes in respect of capital cost allowance and expenses incurred by the Partnership; provided, however, that the General Partner shall have the right, for income tax purposes, to adopt any different method of accounting from that otherwise used by the Partnership or to adopt a different treatment of particular items as the General Partner may deem appropriate and in the best interests of the Special Partners and not inconsistent with the other provisions of this Agreement.

12.13Tax Elections

The General Partner shall have the authority to act, and shall act with due diligence, for the Partnership for the purpose of making or executing any agreement, designation or election on behalf of the Partners or the Partnership pursuant to the Income Tax Act and any applicable provincial income tax Laws, and each Partner agrees to act reasonably and co-operatively with the other Partners for the purpose of making any tax elections that are required to be made jointly by all of the Partners; provided, however, that, in the case of any such agreement, designation or election that either (i) could have a material effect on the amount and/or timing of realizing, for tax purposes, any items of income, gain, deduction, loss or credit of the Partnership, or (ii) relates to any such material items, the General Partner shall obtain the prior consent of the Series B Partner for making or executing such agreement, designation or election.

12.14Adjustment Indemnity

To the extent that a transaction between the Partnership and any one of the Special Partners or its Affiliates results in an adjustment that increases the income of the Partnership for tax purposes, the resulting incremental income for tax purposes shall be specially allocated to such Special Partner to which the transaction relates, such that the corresponding tax liability is borne by such Special Partner. In the event that such an adjustment occurs, the Special Partner to which, or to whose Affiliate, the transaction and corresponding adjustment relate shall indemnify the other Partners from any incremental tax liability, together with penalties and interest, if any, resulting from or relating to such adjustment such that the other Partners will not be worse off than if the adjustment had never occurred and all the Partners shall work together to ensure that any settlement payment or mechanism required by any tax authority to settle the adjustment item is handled in the most tax efficient manner. In no circumstance shall the indemnified Partners be unduly enriched by such indemnification or such settlement payment or mechanism.

ARTICLE 13

MEETINGS OF THE PARTNERS

13.1Calling of Meetings

Meetings of the Partners may be called at any time by any Partner. Physical meetings shall be held in Bécancour, at the office designated for such purpose by the Partnership, or at such other place as the Partners shall agree in accordance with the provisions of Section 13.5, and any Partner may at any time prior to the meeting require that such meeting be held not only physically at any place, but also at the same time by telephone, video-conference, electronic or other means of communication (auditory and/or visual) that permits all participants to communicate adequately with each other during the meeting and to be identified. There shall be an annual meeting of the Partners, which shall be held each year not more than 30 days following the end of the financial year of the Partnership. At each annual meeting of the Partners, the business which may be transacted is receiving the annual financial statements of the Partnership which have been approved by the General Partner, the appointment of the auditor of the Partnership and such other matters that require the approval of the Partners. At any other meeting of the Partners, such matters that require the approval of the Partners may be considered, subject to the provisions set forth in Section 13.3.

Subject to such guidelines and procedures as the Partners may from time to time adopt, Partners and proxyholders not physically present at the meeting may by means of remote communication:

(i)   participate in a meeting of Partners;

(ii)   be deemed present in person and vote at a meeting of the Partners, whether such meeting is to be held at a designated place and/or by telephone, video-conference, electronic or other means of communication (auditory and/or visual) that permits all participants to communicate adequately with each other during the meeting and to be identified, provided, that (a) the General Partner shall implement reasonable measures to verify that each Person deemed present and permitted to vote at the meeting by means of remote communication is a Partner or proxyholder, (b) the General Partner shall implement reasonable measures to provide such Partners and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the Partners and take other action at the meeting, including an opportunity to read or hear the proceedings of the meeting, substantially concurrently with such proceedings and (c) if any Partner or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Partnership;

(iii)   ballot requirements, if any, shall be satisfied by a ballot submitted by electronic transmission or a vote expressed orally by remote communication, provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the Partner or proxyholder;

(iv)   a Partner (other than the General Partner) participating in a meeting by remote communication shall not record, videotape or memorialize in a similar manner any part of the proceedings or the meeting; and

(v)   any ballot, vote or direction submitted by remote communication may be revoked by the Partner or proxyholder so long as the revocation is received by the General Partner at or before the meeting.

13.2Quorum

At any meeting of the Partners a quorum shall consist of both Special Partners. If only one Special Partner is present on the date for which the meeting is called within one hour after the time fixed for the holding of such meeting, such Special Partner may appoint a chairman for the purpose of adjourning the meeting and, in such event, the meeting shall be adjourned to be held at the office designated for such purpose by the Partnership, being, as at the date of this Agreement, as set forth in Section 13.1 and upon a date (being not less than 10 days from the date of such meeting) and at a time to be fixed by the chairman of the meeting. The General Partner shall give not less than five Business Days' notice of the date, time and location of the adjourned meeting and at such adjourned meeting a quorum shall consist of Partners then and there present in Person or represented by proxy and voting. At any such adjourned meeting any business may be transacted which might have been transacted at the meeting as originally called. Subject to the provisions of Section 11.2, the General Partner shall have the right to attend and be present at meetings of the Partners. Notwithstanding the foregoing, during any such time that a Special Partner shall have lost its right to vote its Partnership Interest and to attend meeting of the Partners pursuant to Section 16.4, a quorum at any meeting of the Partners shall consist of the Non-Defaulting Special Partner.

13.3Notice

Notice of all meetings of the Partners, stating the date, time, place and purpose of the meeting, and means of communicating by telephone, video-conference, electronic or other means of communication, as the case may be, shall be given by the Partner or Partners calling the meeting to each Partner at its registered address, sent by telecopy and also mailed at least five Business Days if the meeting is to be held physically, or two Business Days if the meeting is to be held by telephone or other means of communication, and not more than 30 days before the meeting. Only business stated in the notice of meeting shall be considered at such meeting unless all Partners are present at such meeting in person or by proxy and consent to the consideration of any other business not stated in the notice of meeting. Such notice shall contain sufficient information to enable each Partner to make a reasoned judgment on the matters to be voted upon at the meeting. The presence of all Partners at a meeting shall constitute a waiver by all of them of the notice provisions of this Section 13.3.

13.4Voting

Every question submitted to a meeting, except for those matters which specifically require the agreement of all of the Partners or the Special Partners entitled to vote thereon pursuant to the other provisions of this Agreement, shall (i) be decided by resolution and (ii) subject to the provisions of Section 13.1 with respect to meetings conducted in whole or in part by means of remote communication, on a show of hands unless a vote by ballot is demanded by one or more of the Partners, in which case a vote by ballot shall be taken. In the case of an equality of votes, the chairman of the meeting shall not have a casting vote. Votes may be given in Person or by proxy and a Person appointed by proxy need not be a Partner. No Person other than the holder of a Unit or a Person appointed by proxy is entitled to vote at a meeting of the Partners. At any meeting of the Partners on a matter voted upon for which no vote by ballot is requested, a declaration made by the chairman of the meeting as to the voting on any particular resolution shall be conclusive evidence thereof.

13.5Decisions

Any of the following actions of the Partnership may only be taken after obtaining a Unanimous Resolution:

(a)   The Partnership entering into any line of business other than the Business;

(b)   The issuance of any Units other than as expressly provided hereunder;

(c)   Any amendment of this Agreement other than to admit a new Partner upon the Transfer of Partnership Interests or to reflect the issuance of additional Units, in either instance in accordance with the express terms of this Agreement;

(d)   Any action or steps to terminate, dissolve, wind-up or liquidate the Partnership; and

(e)   As otherwise expressly provided in this Agreement.

13.6Proxies

At any meeting of the Partners, any Partner entitled to vote thereat may vote by proxy, provided, that no proxy shall be voted at any meeting unless it shall have been placed on file with the General Partner for verification prior to the time at which such vote shall be taken. A proxy purporting to be executed by or on behalf of a Partner shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger.

13.7Record Dates

For the purpose of determining the Partners which are entitled to vote or act at any meeting or any adjournment thereof, or which are entitled to participate in any Distribution, or for the purpose of any other action hereunder, the General Partner may from time to time cause the transfer books to be closed for such period, not less than five days or more than 10 days prior to the action in question, as the General Partner may determine; or without causing the transfer books to be closed the General Partner may fix a date not less than five days or more than 10 days prior to the date of any meeting of the Partners, Distribution or other action as a record date for the determination of Partners entitled to vote at such meeting or any adjournment thereof or to receive such Distribution or to be treated as Partners of record for purposes of such other action, and any Partner which was a Partner at the time so fixed shall be entitled to vote at such meeting or any adjournment thereof or to receive such Distribution, even though it has since that date ceased to be a Partner, and no Partner becoming such after that date shall be a Partner for any of the foregoing purposes.

13.8Chairman

The first item of business at any meeting of the Partners shall be the election of a chairman of the meeting.

13.9Form of Proxy

Every proxy, whether for a specified meeting or otherwise, shall as nearly as circumstances permit be substantially to the following effect:

"I,of , being a Partner of Québec Silicon Limited Partnership, hereby appoint of _______________________, as my proxy to vote for me and on my behalf at the meeting of Québec Silicon Limited Partnership to be held on the _____ day of ____________, _______, and every adjournment thereof and every poll that may take place at such meeting or meetings.

As witness my hand this  day of ,."

13.10Additional Rules and Procedures

To the extent that the rules and procedures for the conduct of a meeting of the Partners are not prescribed in this Agreement, such rules and procedures shall be determined by all of the Partners present at the meeting.

13.11Authorized Attendance

The General Partner shall have the right to authorize the presence of any Persons, in addition to proxies, which are not Special Partners, at any meeting of the Partners. Any proxy and, with the approval of the General Partner, any other Person shall be entitled to address the meeting.

13.12Resolutions in Writing

Any action that may be taken at a meeting of the Partners may be taken without a meeting and without prior notice if agreed to unanimously in writing by all of the Partners.

ARTICLE 14

RECORDS, REPORTS AND REPORTING

14.1Records and Books of Account

The General Partner shall keep or cause to be kept at the principal office of the Partnership appropriate books and records with respect to the Partnership's Business. Any books and records maintained by or on behalf of the Partnership in the regular course of its business, including books of account and records of Partnership proceedings, may be kept on, or be in the form of, computer disks, hard disks, magnetic tape or any other information storage device, provided, that the books and records so maintained are convertible into clearly legible written form within a reasonable period of time. The books of the Partnership shall be maintained, for financial reporting purposes, on an accrual basis in accordance with GAAP up to and including December 31, 2010, and with IFRS thereafter. The Special Partners shall have access to, and may take copies from, all such books and records at all reasonable times during regular business hours.

14.2Reports

(a)   Annual Financial Statements. As soon as possible, but in no event later than 20 days after the end of each Fiscal Year of the Partnership, the General Partner shall cause to be delivered to each holder of a Unit, as indicated on the Register, a financial report and unaudited financial statements of the Partnership for such Fiscal Year, presented in accordance with GAAP up to and including December 31, 2010, and with IFRS thereafter, in sufficient detail to enable each such holder to prepare its income tax returns and consolidated financial statements, including a balance sheet and statements of operations. The financial statements (with the notes attached thereto) shall be audited and reported upon by the auditor of the Partnership and certified by one or more officers or directors of the General Partner, in accordance with applicable Laws, as the case may be (including any Law applicable to a Partner), no later than 20 Business Days after the end of each such Fiscal Year and shall be sent to each holder of a Unit no later than 45 days after the end of each such Fiscal Year.

(b)   Quarterly Financial Statements. As soon as practicable, but in no event later than 20 days after the end of each calendar quarter, the General Partner shall cause to be delivered to each holder of a Unit, as indicated on the Register, a financial report and unaudited financial statements of the Partnership for such calendar quarter, presented in accordance with GAAP up to and including December 31, 2010, and with IFRS thereafter, in sufficient detail to enable each such holder to prepare its income tax returns and financial statements and in a format ready to be consolidated into the financial statements of such holder, including a balance sheet and statements of operations, such statements to be approved or certified by the directors or one or more officers of the General Partner, in accordance with applicable Laws, as the case may be (including any Law applicable to a Partner), and such other information as the General Partner determines to be necessary or appropriate.

(c)   Annual Budget. As soon as possible, but in no event later than September 15th of each calendar year, the General Partner shall cause to be delivered to each Special Partner, the annual budget of the Partnership for the immediately following Fiscal Year of the Partnership, presented in accordance with GAAP up to and including December 31, 2010, and with IFRS thereafter, with sufficient details and in a format ready to be consolidated into the financial statements of such holder. An updated version of this annual budget, if needed or requested by a Special Partner, will be addressed to each Special Partner at the latest by October 15th of each calendar year.

(d)   Material Filings. As soon as possible, the General Partner shall cause to be delivered to each Special Partner copies of all material filings made by the General Partner and/or the Partnership with any governmental authority (including any regulatory authority).

(e)   Other Information. Upon request, the General Partner shall provide any other information which may be requested from time to time by a Special Partner, acting reasonably (excluding for greater certainty, customer specific information of a third party). In the event that any Partner requires any of the foregoing reports or statements presented in a manner other than as described above, the General Partner shall use its reasonable best efforts to satisfy such needs, and such Partner shall reimburse the General Partner for any additional costs incurred by the General Partner on its behalf.

14.3Income Tax Information

(a)   The General Partner shall send or cause to be sent to each Person which was a Partner at any time during the Fiscal Year or on the date of dissolution of the Partnership, within 60 days of the end of such Fiscal Year or within such other shorter period of time as may be required by applicable Laws, all information, in suitable form, relating to the Partnership necessary for such Person to prepare such Person's Canadian federal, Canadian provincial and other (if any) income tax returns.

(b)   The General Partner shall prepare and provide the Special Partners with a copy of each annual partnership information and income, franchise or other comparable tax return that the Partnership is required to file on behalf of itself or the Partners and Internal Revenue Service Schedule K-1 to Form 1065, together with copies of all supporting documentation and information by the earlier of 30 Business Days prior to the due date for filing such tax return (taking into account any extensions or waivers) and April 30 following the end of the Fiscal Year. The Series B Partner shall be entitled to provide the General Partner comments to any such information or tax return within 20 Business Days of receiving the copy of the return and all supporting documentation and information and the General Partner shall incorporate all such reasonable comments. The General Partner shall notify the Series B Partner within five Business Days of receiving the Series B Partner's comments in writing of its decision with respect to the Series B Partner's comments. If the Series B Partner disputes the General Partner's decision, the Series B Partner and the General Partner shall attempt in good faith to resolve any such dispute within five Business Days. To the extent that the Series B Partner and the General Partner are unable to resolve the dispute within such time period, the Series B Partner and the General Partner shall jointly engage an internationally recognized accounting firm (the "Accounting Firm") and the Accounting Firm shall be requested to resolve any such dispute within five Business Days. The Series B Partner and the General Partner shall cooperate with each other and shall promptly provide to the Accounting Firm such information as the Accounting Firm may reasonably request in order to enable the Accounting Firm to render a proper decision. References in this Section 14.3(b) to the Series A Partner and the Series B Partner shall be deemed to, alternatively, refer to the Series B Partner and the Series A Partner, respectively, at such time as affiliates of the Series B Partner are entitled to nominate a majority of the members of the GP Board.

(c)   The fees and expenses of the Accounting Firm shall be borne by the Partnership and, to the extent that the Partnership does not have sufficient funds, by the Special Partners proportionately to their Pro-Rata Shares. The resolution by the Accounting Firm of the dispute shall be used for purposes of preparing all of the information and tax returns of the Partnership to the extent applicable. The Partners agree that the procedure set forth in Section 14.3 for resolving disputes with respect to the preparation of the Partnership's information and tax returns shall be the sole and exclusive method for resolving any such disputes.

(d)   The General Partner shall file, in a timely manner on behalf of the Partnership and the Partners, the information and tax returns contemplated by Section 14.3(b) required to be filed by the Partnership, and shall provide the Special Partners with a copy of all such as-filed returns, together with copies of all supporting documentation and information, promptly after their filing.

14.4Accounting Policies

Subject to the provisions of Sections 13.5 and 14.5, the General Partner is authorized to establish from time to time accounting policies with respect to the financial statements of the Partnership and to change from time to time any accounting policy that has been so established so long as such policies are consistent with GAAP up to and including December 31, 2010, and with IFRS thereafter.

14.5Auditor

The General Partner will, on behalf of the Partnership, cause the auditor of the Partnership to review and report to the Partners upon the financial statements of the Partnership for and as at the end of each Fiscal Year, and to advise upon and make determinations with regard to financial questions relating to the Partnership or required by this Agreement to be determined by the auditor of the Partnership. Until its successor is appointed, the auditor of the Partnership shall be Ernst & Young LLP. The Partners hereby agree that any successor auditor of the Partnership shall be selected among the four largest accounting firms in Canada.

14.6Audit

The Special Partners (either directly or indirectly through an auditor or legal counsel) shall have the right, at all reasonable times, to audit the books, the registers and records of the Partnership and to discuss its affairs with officers of the General Partner. In furtherance of the foregoing, the Special Partners (either directly or indirectly through an auditor or legal counsel) shall have the right to audit any transactions between the Partnership, on the one hand, and any Special Partner (or Affiliate thereof), on the other.

14.7Banking

The General Partner shall handle all banking necessary for the due performance of the Partnership's accounting and administrative functions under the provisions of this Agreement, and shall be responsible for the receipt and disbursement of all monies of the Special Partners. The General Partner shall be responsible for the management of cash balances and there shall be no commingling with the monies of the Partnership with any monies of the General Partner.

14.8Internal Controls

The General Partner shall consult with the Special Partners with respect to procedures relating to internal controls and shall implement and maintain a system of internal controls over financial reporting meeting the requirements of applicable Laws. The General Partner shall keep the Special Partners informed of its efforts to implement such procedures and shall provide them with the results of any assessments as to the effectiveness of such controls.

ARTICLE 15

CASH CALLS

15.1Cash Call Notice

The General Partner shall make cash calls from time to time on behalf of the Partnership in order to ensure sufficient funds are available to enable the Partnership to (i) comply with applicable Laws, (ii) maintain the Facility in sound condition such that it is capable of safely operating at current capacity and (iii) satisfy pension funding obligations (each, a "Mandatory Contribution"). The General Partner may, subject to obtaining any required approval of the GP Board in accordance with the GP Organizational Documents and/or the Shareholders Agreement, make additional cash calls from time to time on behalf of the Partnership for other purposes. In the event that the General Partner declines to make a call for what a Special Partner reasonably believes to be a Mandatory Contribution within 30 days of any meeting of the GP Board at which such Mandatory Contribution was proposed, either Special Partner may call for a Mandatory Contribution. The General Partner or, regarding certain Mandatory Capital Calls as described above, a Special Partner shall issue a cash call notice (the "Cash Call Notice") to the Special Partners stating the amount requested from each Special Partner, which shall correspond to their respective Pro-Rata Share.

15.2Non-Contributing Special Partner

If a Special Partner does not contribute its Pro-Rata Share of any cash call made pursuant to the provisions of Section 15.1 within 30 days (the "Contribution Deadline") following the receipt by such Special Partner of a Cash Call Notice, the other Special Partner (directly or indirectly through one of its Affiliates) shall have the right to loan to the Partnership the amount of such Mandatory Contribution shortfall on an unsecured basis at an interest rate of LIBOR (London Interbank Offered Rates with a term of three months as published in The Wall Street Journal) plus 10% (1000 basis points); provided that (i) the making of a loan by any Special Partner pursuant to this Section 16.2 shall not relieve a non-contributing Special Partner's obligation to make the applicable Mandatory Contribution (together with any accrued, but unpaid, interest) and (ii) on the last Business Day of each calendar quarter, such non-contributing Special Partner shall contribute to the Partnership an amount equal to the aggregate amount of interest accrued (whether or not paid) on such loan during such quarter. No additional Units shall be issued by the Partnership with respect to any Mandatory Contributions or contributions made relating to the Partnership's interest expense incurred pursuant to any loan accepted pursuant to this Section 15.2 unless approved by a Unanimous Resolution.

15.3Funds for Special Projects

In the event that any Special Partner desires to make funds available for the purpose of modifying or building equipment in order to satisfy the production needs solely of such Special Partner, the Partners agree to use reasonable efforts to determine, in good faith, an appropriate method to such allow such Special Partner to make the funds available and to modify this Agreement accordingly; provided, however, except as specifically agreed upon by the GP Board in accordance with the terms of the GP Organizational Documents and/or Shareholders Agreement, no such funding by a Special Partner shall be deemed a Capital Contribution and no such funding shall alter the relative ownership interests of the Special Partners.

ARTICLE 16

DEFAULT OF A SPECIAL PARTNER

16.1Default

For the purposes of this Agreement, a default (a "Default") shall be deemed to have occurred in respect of a Special Partner if:

(a)   an order, judgment or decree, is voluntarily obtained by a Special Partner or an effective resolution is passed by such Special Partner pursuant to the Laws of any applicable jurisdiction, for the winding-up, liquidation or dissolution of such Special Partner; or

(b)   a Special Partner makes an assignment for the benefit of its creditors, is deemed to have made an assignment for the benefit of its creditors, files an assignment in bankruptcy, or files a proposal or a notice of intention to file a proposal under the Bankruptcy and Insolvency Act (Canada) or any successor legislation or any similar legislation of any applicable jurisdiction, or applies for an order under the Companies' Creditors Arrangement Act (Canada) or any similar legislation of any applicable jurisdiction; or

(c)   an order, judgment or decree is entered or obtained adjudging a Special Partner a bankrupt, or granting a motion seeking the liquidation, winding-up, dissolution, reorganization, arrangement, adjustment or composition of a Special Partner under the Companies' Creditors Arrangement Act (Canada), the Bankruptcy and Insolvency Act (Canada), or the Winding Up and Restructuring Act (Canada) or any successor legislation or any similar legislation of any applicable jurisdiction; or

(d)   proceedings are begun by a third party (i) for the appointment of a liquidator, trustee in bankruptcy, custodian, sequestrator, receiver, receiver and manager or any other Person with similar powers for a Special Partner or all or substantially all of a Special Partner's assets or properties, or (ii) to have an order for relief entered against such Special Partner as debtor or to adjudicate it bankrupt or seeking the liquidation, winding-up, dissolution, reorganization, arrangement, adjustment or composition under the Companies' Creditors Arrangement Act (Canada), the Bankruptcy and Insolvency Act (Canada) or the Winding-up and Restructuring Act (Canada) or any successor legislation or any similar legislation of any applicable jurisdiction, unless the Special Partner is, within 10 days and in good faith, disputing such proceedings and in any event such proceedings are dismissed or withdrawn within 30 days after the commencement thereof; or

(e)   a Special Partner applies for or consents to, approves or accepts the appointment of a liquidator, trustee in bankruptcy, custodian, sequestrator, receiver, receiver and manager or any other Person with similar powers for itself or all or substantially all of its assets or properties; or

(f)   a seizure or execution or any similar process, other than pursuant to a Security Interest permitted, contemplated or acknowledged under this Agreement, is levied or enforced upon or against the Partnership Interest of such Special Partner and the same remains unsatisfied for the shorter of a period of 90 days or such period as would permit the same to be sold, unless the Special Partner is, within 10 days and in good faith, disputing such process; or

(g)   a seizure or execution or any similar process, pursuant to a Security Interest permitted, contemplated or acknowledged under this Agreement, is levied or enforced upon or against the Partnership Interest of such Special Partner and the same remains unsatisfied for the shorter of a period of 90 days or such period as would permit the same to be sold, unless the Special Partner is, within 10 days and in good faith, disputing such process; or

(h)   a Special Partner becomes Insolvent; or

(i)   a Partnership Interest is Transferred (including, for greater certainty, the granting of a Security Interest), except in compliance with the provisions of this Agreement; or

(j)   a Special Partner or a Special Partner's Affiliate that is a shareholder of the General Partner is in Default (as such term is defined in the Shareholders Agreement) under the Shareholders Agreement and fails to cure such Default within any applicable cure period stated therein.

A Special Partner in respect of which a Default has occurred is referred to as the "Defaulting Special Partner" and the Special Partners in respect of which no Default has occurred are the "Non-Defaulting Special Partners". In the event of the occurrence of more than one Default with respect to a Special Partner, each such Default shall be deemed to be a separate Default.

16.2No Default

For greater certainty, the failure by a Special Partner to advance its share of any funds shall not, per se, constitute or give rise to a Default.

16.3Acts of Insolvency

The occurrence of any of the events described in Sections 16.1(a), 16.1(b), 16.1(c), 16.1(d), 16.1(e), 16.1(g) or 16.1(h) shall constitute and give rise to an "Act of Insolvency".

16.4Rights of Defaulting Special Partner upon a Default

Upon the giving of notice of the occurrence of a Default to the Defaulting Special Partner and the secretary of the General Partner by any Non-Defaulting Special Partner and unless and until such Default and any subsequent Default, if any, shall have been remedied in full, the Defaulting Special Partner shall lose the right to vote its Partnership Interest and to attend meetings of the Partners, and the Partnership Interest of such Defaulting Special Partner shall be disregarded for the purposes of any decision to be taken at a meeting of the Partners; provided, however, that any such Defaulting Special Partner, in respect of which a Default other than an Act of Insolvency has occurred and is continuing, shall nevertheless retain the right to attend any meeting of the Partners.

16.5Right to Purchase of Non-Defaulting Special Partners

If a Default occurs, the Non-Defaulting Special Partner shall have the right to purchase, at its option, the Partnership Interest of the Defaulting Special Partner, for a purchase price equal to (i) the fair market value of such Partnership Interest where the Default is an Act of Insolvency, and (ii) the lesser of (a) 75% of the book value and (b) 75% of the fair market value, of such Partnership Interest in every other case.

The acquisition of the Partnership Interest of a Defaulting Special Partner shall not release the Defaulting Special Partner from any of its obligations under this Agreement, the Shareholders Agreement or the Supply Agreement, to the extent that such obligations existed prior to or arose from anything done or omitted to be done prior to the time of purchase of such Partnership Interest pursuant hereto.

16.6Default Payments by Non-Defaulting Special Partners

In the event that a Special Partner becomes a Defaulting Special Partner, the Non-Defaulting Special Partner may elect to remedy the default of the Defaulting Special Partner (each a "Paying Non-Default Special Partner") by payment of monies or otherwise. Any amount paid by a Non-Defaulting Special Partner to remedy a Default (the "Default Payments") shall be made directly to the Person to whom such payment was to be made on behalf of the Defaulting Special Partner, and shall be deemed to constitute a demand loan by the Paying Non-Defaulting Special Partner to the Defaulting Special Partner bearing interest thereon, both before and after default and judgment, at an annual rate equal to the Prime Rate plus 10% per annum compounded semi-annually from the date on which such payment was made until the date of repayment.

If a Default occurs, and the Non-Defaulting Special Partner has elected to remedy the Default pursuant to the immediately preceding paragraph, the Non-Defaulting Special Partner shall be subrogated in all of the rights of the payee against the Defaulting Special Partner.

16.7Waiver 2229 Civil Code

To the fullest extent permitted under applicable Law, each of the Partners hereby waives its rights under Article 2229 of the Civil Code with respect to the expulsion of a partner of a partnership in certain circumstances.

ARTICLE 17

TERMINATION OF THE PARTNERSHIP

17.1No Dissolution or Termination

The Partnership shall continue unless and until terminated pursuant to Section 17.2 and shall not be dissolved or terminated by the occurrence of any of the following events:

(a)   if any amendment is made to this Agreement; or

(b)   if the name and style under which the Partnership carries on business or its principal place of business is changed;

but in each such case, a declaration of change or new declaration of limited partnership shall, if required by applicable Law, be forthwith executed by the Partners and filed as required by applicable Law.

17.2Termination

The Partnership shall be terminated upon the occurrence of any one of the following events:

(a)   the end of the term as provided in Section 2.1; or

(b)   the written mutual agreement between the Partners to terminate the Partnership; or

(c)   the bankruptcy, Insolvency, dissolution, liquidation, winding-up or receivership of the General Partner, unless the General Partner is replaced, pursuant to Section 11.2, within 120 days of such bankruptcy, Insolvency, dissolution, liquidation, winding-up or receivership.

The termination of the Partnership shall not prejudice any accrued rights of the General Partner and shall not bring to an end the rights or obligations of the Partners that are stated to survive the termination of the Partnership or this Agreement. The provisions of Section 11.6, Article 12, Article 18, Sections 20.1, 20.2 and 20.3 shall survive the termination of this Agreement.

Upon the termination of the Partnership, the Partners shall take all necessary steps to wind up the activities of the Partnership, and shall share the wind up costs pro rata to their respective Partnership Interest, as the case may be. In such event, a full and general account of the assets, liabilities and transactions of the Partnership shall at once be taken. The assets may be sold and turned into cash as soon as possible and all debts and other amounts due to the Partnership collected. The proceeds thereof shall be applied as follows: (i) to discharge the debts and liabilities of the Partnership, and the expenses of liquidation; (ii) to set aside such cash reserves as the General Partner shall deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the Partnership; (iii) to pay each Partner or the legal representative of each Partner any unpaid distribution, salary, drawing account, interest or profit to which he or she shall then be entitled; and (iv) to divide the surplus, if any, among the Partners or their legal representatives as follows: first, to the extent of each Partner's then capital account, in proportion to the Partners' then capital accounts in the Partnership and then to each Partner in accordance with its respective Pro-Rata Share.

ARTICLE 18

CONFIDENTIALITY

18.1Confidentiality

Each Partner hereby agrees that, except as required by applicable Law, it shall use Confidential Information only for the purposes of fulfilling its obligations hereunder and that it shall not, except as required by applicable Law in the opinion of such Partner's counsel or except as such Partner in good faith believes necessary or appropriate in the course of conducting the Partnership's business, directly or indirectly, disclose, divulge, reveal, report, publish, transfer or use any Confidential Information for any other purpose whatsoever; provided, that this shall not prevent a Partner from disclosing Confidential Information to its Affiliated Persons, advisors, accountants, attorneys and, subject to the provisions of Article 9, bona fide lenders or potential transferees of the Partner's Partnership Interest, provided, that in any such case the Person to whom Confidential Information is disclosed is advised of the proprietary nature of the Confidential Information and the restrictions contained in this Section 18.1, and the disclosing Partner shall be responsible for any breach of this Section 18.1 by such Person. For the purposes of this Agreement, the term "Confidential Information" shall mean all data or information whatsoever concerning the Partnership, the General Partner, and their respective Affiliated Persons, Controlled Affiliated Persons and their respective businesses, which is non-public, confidential or proprietary in nature in whatever form or manner provided, whether or not reduced to writing, whether tangible or intangible, together with analyses, compilations, forecasts, studies or other documents or records that contain or are based on such information or data prepared by the Partnership, a Partner or any other Person at the Partnership's or the Partner's request, disclosed by one Person to another, including (i) financial statements and other financial and operating information, (ii) processes, intellectual property, methods, techniques and arrangements relating to such businesses and activities and the manner in which the Partnership, the Partners and their Controlled Affiliated Persons do business, (iii) any other materials or information that are not generally known to others engaged in similar businesses or activities, and (iv) all information that contains, is derived from or relates to any of the above enumerated materials and information. Notwithstanding the foregoing, each Partner may disclose (subject to applicable laws) Confidential Information if (a) any such Confidential Information is or becomes generally available to the public other than as a result of disclosure by a Partner (or any of its Affiliated Persons) that does not own such Confidential Information, (b) any such Confidential Information (including any report, statement, testimony or other submission to a governmental authority) is required to be disclosed by applicable laws, including but not limited to applicable securities laws, applicable tax laws and accounting regulations, after prior notice has been given to the other Partner to the extent such notice is permitted by applicable law, provided that no such notice is required if prohibited by applicable law, (c) any such Confidential Information is reasonably necessary to be disclosed in connection with any dispute with respect to this Agreement or the Shareholders Agreement (including in response to any summons, subpoena or other legal process or formal or informal investigative demand issued to the disclosing Partner in the course of any litigation, arbitration, mediation, investigation or administrative proceeding), (d) any such Confidential Information was or becomes available to a Partner on a non-confidential basis and from a source (other than the other Partner or any Affiliated Person or representative of such Partner) that is not bound by a confidentiality agreement with respect to such information or (e) any such Confidential Information that was previously or is after the date hereof independently developed without the aid, application or use of any information that is to be kept confidential under this Section 18.1 is evidenced by a written record proving such independent development. For avoidance of doubt, "Affiliated Persons" shall include, with respect to DCC LP Canco, Dow Chemical Company and Corning Incorporated for all purposes of this Section 18.1. The provisions of this Section 18.1 shall not otherwise affect any rights granted pursuant to any other agreement.

ARTICLE 19

DISPUTE RESOLUTION

19.1Amicable Resolution

The Partners mutually desire that friendly collaboration will continue among them with respect to the relationship created by this Agreement and the Shareholders Agreement. Accordingly, they will try, and they will cause their respective Affiliates to try, to resolve in an amicable manner all disagreements and misunderstandings connected with their respective rights and obligations under this Agreement and the Shareholders Agreement, including any amendments hereto and thereto. In furtherance thereof, in the event of any dispute or disagreement between the Partners as to the interpretation of any provision of this Agreement or the Shareholders Agreement or any other agreements related hereto or thereto or arising out of the transactions contemplated hereby or thereby, or the performance of obligations hereunder or thereunder, including for the purposes of an inability to obtain a Unanimous Resolution when required, other than disputes arising under Section 14.3, which shall be resolved in the manner set forth in Section 14.3, or with respect to any determination of book value, fair market value or Valuation Price pursuant to this Agreement, which shall be resolved in the manner set forth in Section 21.4 hereof (each a "Dispute"), then unless otherwise expressly provided in such other agreement related hereto (it being understood that Disputes under the Supply Agreement and the Framework Agreement shall be resolved in accordance with the terms thereof), upon written request of either party, the matter will be referred for resolution to the Operating Committee of the General Partner. The Operating Committee will make a good faith effort to promptly resolve all Disputes referred to it. Operating Committee decisions will be unanimous and will be binding on the Partners. If the Operating Committee does not agree to a resolution of a Dispute within 30 days after the reference of the matter to it, the Dispute will be referred to a senior officer of each Special Partner (as so designated by each Special Partner). If the specified senior officers of the Special Partners do not agree to a resolution of the Dispute within 30 days after the reference of the matter to them, then the Partners will be free to exercise the remedies available to them under applicable law, subject to Sections 19.2 and 19.3.

19.2Mediation

In the event any Dispute cannot be resolved in an amicable manner as set forth in Section 19.1, the Partners intend that such Dispute be resolved by mediation. If the Operating Committee and the applicable senior officers of each Special Partner are unable to resolve the Dispute as contemplated by Section 19.1, either of the Special Partners may demand mediation of the Dispute by written notice to the other in which case the parties will select a mediator within 10 days after the demand. The mediator shall be a single qualified mediator experienced in the matters at issue, such mediator to be mutually agreed upon by the Special Partners. Neither party may unreasonably withhold consent to the selection of the mediator. Each Special Partner will bear its own costs of mediation but both parties will share the costs of the mediator equally.

19.3Arbitration

(a)   In the event that the Dispute is not resolved in accordance with Section 19.1 or 20.2, either party involved in the Dispute may submit the Dispute to binding arbitration pursuant to this Section 19.3; provided that no Dispute arising out of the failure to obtain a Unanimous Resolution shall be eligible for or submitted to binding arbitration pursuant to this Section 20.3. All Disputes submitted to arbitration pursuant to this Section 19.3 shall be resolved in accordance with the Commercial Arbitration Rules (the "Rules") of the American Arbitration Association (the "AAA"). All cost and expenses incurred by the arbitrators shall be shared equally by the applicable parties and each party shall bear its own costs and expenses in connection with any such arbitration proceeding.

(b)   In any Dispute submitted to binding arbitration pursuant to this Section 19.3, there shall be three arbitrators: (i) one appointed by the Series A Partner, (ii) one appointed by the Series B Partner and (iii) one appointed by the two arbitrators appointed by the Special Partners. Each party to a Dispute shall choose an arbitrator within 30 days of receipt by a party of the demand for arbitration. If any party fails to appoint an arbitrator within the time periods specified herein or if the two arbitrators appointed by the Special Partners are unable to agree upon a third, such arbitrator shall, at any party's request, be appointed by the AAA, pursuant to a listing, ranking and striking procedure in accordance with the Rules. Any arbitrator appointed by the AAA shall have no less than 15 years of experience with large, complex commercial cases, and shall be an experienced arbitrator.

(c)   The language of the arbitration shall be English. The place of arbitration shall be New York, New York. Except as set forth in this Article 19, the parties agree that arbitration shall be their exclusive remedy with respect to Disputes. In addition to the authority conferred on the arbitral tribunal by the Rules, the arbitral tribunal shall have the authority to order such production of documents and such depositions of witnesses as may reasonably be requested by either party or by the arbitral tribunal itself. The award rendered in any arbitration commenced hereunder shall be final and binding upon the applicable parties and judgment thereon may be entered in any court of competent jurisdiction. By agreeing to arbitration, the parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings and/or the enforcement of any award. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the applicable parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any applicable party to respect the arbitral tribunal's orders to that effect. Any arbitration hereunder shall be confidential and all information about the arbitration or the substance of the proceedings thereunder shall be treated as Confidential Information pursuant to Article 18 hereof.

19.4Non-Exclusive Remedy

The Partners acknowledge and agree that money damages would not necessarily be a sufficient remedy for any breach of this Agreement or the Shareholders Agreement by the Partners or their Affiliates. Accordingly, nothing in this Agreement will prevent the Special Partners from seeking injunctive or similar relief in the event: (i) any delay resulting from efforts to resolve such Dispute pursuant to Section 19.2 and Section 19.3 could result in serious and irreparable injury to either party; or (ii) of any actual or threatened breach of any provisions of this Agreement or the Shareholders Agreement. All actions for such injunctive or interim relief shall be brought in a court of competent jurisdiction in accordance with this Agreement. Such remedy shall not be deemed to be the exclusive remedy for breach of this Agreement or the Shareholders Agreement.

19.5Enforcement by Partners

Notwithstanding anything to the contrary in this Agreement, the Shareholders Agreement or the Supply Agreement, each Partner shall have the right, but not the obligation, to enforce this Agreement, the Shareholders Agreement and the Supply Agreement on behalf of the Partnership with respect to the obligations of the other Partners and their Affiliates hereunder and thereunder.

ARTICLE 20

INDEMNIFICATION

20.1General Indemnity

The Partnership shall indemnify the General Partner for all payments made by the General Partner under Section 11.2 of the Shareholders Agreement, provided, that the Person or Persons indemnified by the General Partner: (i) acted honestly and in good faith; and (ii) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his or her conduct was lawful.

20.2General Partner's Indemnity

The General Partner will indemnify and hold harmless each Special Partner (including former Special Partners) for all costs, expenses, damages or liabilities suffered or incurred by the Special Partner if the limited liability of such Special Partner is lost for or by reason of the negligence of the General Partner in performing its duties and obligations hereunder.

20.3Advance by the Partnership

To the fullest extent permitted under applicable Law, expenses (including legal fees and expenses) incurred by an indemnitee in defending any claim, demand, action, suit or proceeding shall, in the circumstances of any claim, demand, action, suit or proceeding made against any director or officer of the General Partner (including, where the context so requires or permits, any former director or officer of the General Partner and an individual who acts or acted at the General Partner's request as a director or officer of a body corporate of which the General Partner is or was a shareholder or creditor (or an individual who undertakes or has undertaken any liability on behalf of the General Partner, any such body corporate or the Partnership)) and his or her heirs and legal representatives, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of an undertaking by or on behalf of the indemnitee to repay such amount if it shall be determined that the indemnitee is not entitled to be indemnified as authorized in Section 20.1.

20.4Insurance

The Partnership may purchase and maintain insurance, on behalf of the General Partner and other Persons, against any liability that may be asserted against or expense that may be incurred by the General Partner or such other Person in connection with the Partnership's activities, whether or not the Partnership would have the power to indemnify the General Partner or such other Person against such liabilities under the provisions of this Agreement.

20.5Exclusivity

The remedies provided for in this Article 20 are not exclusive with respect to, and shall not limit any rights or remedies that may otherwise be available to, any Persons who may be entitled to indemnification hereunder at law or in equity.

ARTICLE 21

GENERAL

21.1Notices

Any notice, waiver, request, demand or other communication given or made pursuant to this Agreement shall be in writing and delivered to the addresses below, and shall be deemed to have been duly given or made as follows: (i) if sent by registered or certified mail, postage and fees prepaid, on the fifth Business Day after same was deposited with the post office; (ii) if sent by reputable overnight courier, when delivered; (iii) if sent by facsimile transmission or by any other written form of electronic communication, return receipt requested, the Business Day next following receipt; or (iv) if otherwise actually personally delivered, when delivered. Any Partner may from time to time change its address for receiving notices by giving written notice thereof in the manner set forth above.

(a)   if to BSI, to:

Becancour Silicon Inc.

c/o Timminco Limited

Sun Life Financial Tower

150 King Street West

Suite 2401

Toronto ON M5H 1J9

Attention:                       General Counsel and Corporate Secretary

Fax:                       (416) 364-3451

E-mail:                                    pkalins@timminco.com

a copy (which shall not constitute notice) to:

Stikeman Elliott LLP

5300 Commerce Court West

199 Bay Street

Toronto, Ontario M5L 1B9

Attention:                      Jay C. Kellerman

Fax:                              (416) 947-0866

E-mail:                          jkellerman@stikeman.com

if to DCC LP Canco, to:

c/o Dow Corning Corporation

2200 W. Salzburg Road

Midland, Michigan 48686-0994

Attention:                        Sue K. McDonnell

                           Senior Vice President, General Counsel & Secretary

Fax:                       (989) 496-8307

E-mail:                            sue.mcdonnell@dowcorning.com

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attention:                      David J. Friedman

Fax:                              (212) 735-2000

E-mail:                          David.Friedman@skadden.com

if to GP, to:

Québec Silicon General Partner Inc.

c/o Becancour Silicon Inc.

Sun Life Financial Tower

150 King Street West

Suite 2401

Toronto ON M5H 1J9

Attention:                      General Counsel and Corporate Secretary

Fax:                              (416) 364-3451

E-mail:                          pkalins@timminco.com

with a copy (which shall not constitute notice) to DCC LP Canco together with a copy to the legal advisor of DCC LP Canco and the legal advisor of BSI.

21.2Preamble

The preamble forms an integral part of this Agreement.

21.3Execution of Documents

Each Partner shall promptly notify the General Partner of any changes in the information relating to such Partner contained herein, and promptly provide the General Partner with such other information as the General Partner may reasonably request for the purposes of the preparation of any declaration filed or required to be filed under applicable Law.

21.4Determinations of Book Value and Fair Market Value

In circumstances where book value or fair market value, as the case may be, is to be determined or established pursuant to the provisions of this Agreement, book value or fair market value, as the case may be, shall be conclusively determined by an independent chartered accounting firm agreed to by the Special Partners. In the event that such parties fail to jointly select an appraiser within such time period, then at the request of a party, the AAA located in New York, NY, shall provide the parties with a list of five appraiser candidates of which each of the Special Partners shall be allowed to strike one name and both parties shall rank the remaining appraiser candidates in order of acceptance. The AAA shall select one of the appraiser candidates remaining on the lists, taking into account the rankings of such candidates by the parties. The appraiser shall be requested to make its determination within a period of 30 days, and the cost of any such determination or appraisal shall be borne by the Special Partner(s) whose Units are Transferred (except if determined pursuant to Sections 10.6(c) and 10.7(d), in which case the costs shall be split between the Special Partners) and may be deducted from the proceeds of any such Transfer together with any other expenses incurred in connection therewith. In all cases where book value is to be determined or established, it shall be determined or established on the basis of historical cost, without any adjustment for financial interest. In all cases where fair market value is to be determined or established under this Agreement (other than pursuant to Section 16.5), fair market value shall be determined and established by determining the price that a willing seller and willing buyer would agree to, in either case not under duress, without taking into consideration any minority discount and taking into account the business of the Partnership and its projected cash flows and profitability, giving effect to the obligations under the Supply Agreement.

21.5Entire Agreement

Each of the Partners hereby agrees and represents and warrants that this Agreement and the Shareholders Agreement, as between any of them, constitutes the complete and exclusive statement of the agreements between them with respect to their relationship as partners in the Partnership, and their Affiliates as shareholders of the General Partner. This Agreement supersedes all prior negotiations, agreements and communications, written or oral between the Partners, including their Affiliated Persons, with respect to their relationship between themselves as partners in the Partnership. For greater certainty, this Agreement does not supersede any of the agreements, documents or instruments listed in Schedule 21.5 attached hereto.

21.6Amendment

No amendments, changes or modifications to this Agreement shall be valid except if the same are in writing and signed by a duly authorized representative of each of the Partners.

21.7No Waiver

No consent or waiver, expressed or implied, by any Partner of any breach or default by any Partner in the performance of its obligations hereunder shall be deemed or construed to be a consent to or waiver of any other breach or default in the performance by such other Partner of the same or any other obligations of such Partner. Failure on the part of any Partner to complain of any act or failure to act of any other Partner or to declare the other Partner in default, irrespective of how long such failure continues, shall not constitute a waiver by the first mentioned Partner of its rights hereunder.

21.8Severability

If any of the provisions contained in this Agreement are found by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, the validity, legality or enforceability of the remaining provisions contained herein shall not be in any way affected or impaired thereby. In addition, if any provision of this Agreement is found by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, the Partners shall negotiate in good faith appropriate modifications to this Agreement to replace the invalid, illegal or unenforceable provision by a valid, legal and enforceable provision the effect and purpose of which is as close as possible to the intended effect and purpose of the invalid, illegal or unenforceable provision.

21.9Currency

All dollar amounts referred to in this Agreement are stated in the lawful currency of Canada.

21.10Number and Gender

Words in the singular include the plural and vice versa and words in one gender include all genders.

21.11Date for Any Action

If any date on which any action is required to be taken under this Agreement is not a Business Day, such action shall be required to be taken on the next succeeding Business Day.

21.12Accounting Principles

Wherever in this Agreement reference is made to a calculation to be made or an action to be taken in accordance with GAAP or IFRS, such reference shall be deemed to be GAAP or IFRS, as the case may be, applicable as at the date on which such calculation or action is made or taken or required to be taken, as the case may be.

21.13Successors and Assigns

This Agreement shall inure to the benefit of and be binding upon the Partners and their personal representatives, successors and permitted assigns, and any reference to a right or an obligation of a Partner shall be deemed to include a reference to such personal representatives, successors and permitted assigns to the extent that the context requires or permits.

21.14Public Announcements

Any material press release, public announcement or publicity with respect to the Partnership or the Project or any of the transactions contemplated by this Agreement shall be made only with the prior written consent of the Partners unless such release or announcement is required by applicable Law, in which case the Partner required to make such release or announcement shall use its best efforts to obtain approval of the other Partners to the form, nature and extent of such disclosure, which approval shall not be unreasonably withheld.

21.15Governing Law

This Agreement and the rights, obligations and relations of the Partners shall be governed and construed in accordance with the laws of the Province of Québec and the federal laws of Canada applicable therein.

21.16Jurisdiction

The Partners hereby agree to submit to the jurisdiction of the courts of the Province of Québec (within the judicial district of Montreal) with respect to all matters that relate to this Agreement.

21.17Further Assurances

In connection with this Agreement and the transactions contemplated hereby, each Partner shall execute and deliver any additional documents and instruments and perform any additional acts that the GP Board determines to be necessary or appropriate to effectuate and perform the provisions of this Agreement and those transactions.

21.18Third Parties

Except as expressly provided in this Agreement, this Agreement does not create any rights, claims or benefits inuring to any Person that is not a party hereto, and it does not create or establish any third-party beneficiary hereto. Each Partner agrees to cause its Affiliates to comply with the provisions of this Agreement applicable to such Affiliates, and shall be liable for any failure of any such Affiliate to comply with such provisions.

21.19Counterparts

This Agreement and any amendment, supplement, restatement or termination of this Agreement in whole or in part may be signed and delivered in any number of counterparts (including facsimile counterparts), each of which when signed and delivered is an original but all of which taken together constitute one and the same instrument.

[Intentionally Left Blank]

IN WITNESS WHEREOF, the parties hereto have duly executed this agreement as of the day first written above.

BÉCANCOUR SILICON INC.
Per:	/s/ Peter Kalins
	Name: Peter Kalins Title: General Counsel and Corporate Secretary duly authorized
DOW CORNING CANADA, INC.
Per:	/s/ J. Donald Sheets
	Name: J. Donald Sheets Title: Director duly authorized
QUÉBEC SILICON GENERAL PARTNER INC.
Per:	/s/ Peter Kalins
	Name: Peter Kalins Title: General Counsel and Corporate Secretary duly authorized

AND INTERVENING FOR THE PURPOSES OF SECTION 10.6 HEREOF

TIMMINCO LIMITED
Per:	/s/ Peter Kalins
	Name: Peter Kalins Title: General Counsel and Corporate Secretary duly authorized

(signature page to Amended and Restated Limited Partnership Agreement)

SCHEDULE 21.5

Non-Superseded Agreements

-   Business Transfer Agreement

-   Shareholders Agreement

-   Supply Agreement

-   Lease Agreement (administration building)

-   Shared Expenses Agreement re: Laboratory

-   Servitude Agreement (when executed)

-   Shared Services Agreement

-   Timminco Support Agreement

-   Agency Agreement

-   Pension Transfer Agreement

-   Intellectual Property Assignment

-   BSI/DCC Intellectual Property License Agreement

-   Bécancour LP Intellectual Property License Agreement

-   Loan Agreement

-   Deeds of Hypothec

-   Nominee Agreement re: HP2 Property

-   Nominee Agreement re: Facility

-   Framework Agreement

-   Side letter relating to Post-Closing Obligations

-   Agreement relating to Proceeds of Title Insurance

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF THE REGISTRANT(1)
Name	State or Jurisdiction of Incorporation
Alabama Sand and Gravel, Inc.	Delaware
Globe Metales S.A.	Argentina
Globe Metallurgical, Inc.	Delaware
LF Resources, Inc.	Delaware
Ningxia Yongvey Coal Industrial Co., Ltd.	China
Solsil, Inc.	Delaware
Ultracore Energy S.A.	Argentina
West Virginia Alloys, Inc.	Delaware
GSM Alloys I, Inc.	Delaware
GSM Alloys II, Inc.	Delaware
WVA Manufacturing, LLC	Delaware
Globe Metals Enterprises, Inc.	Delaware
Core Metals Group Holdings, LLC	Delaware
Core Metals Group, LLC	Delaware
Tennessee Alloys Company, LLC	Delaware
GSM Enterprises Holdings, Inc.	Delaware
GBG Holdings, LLC	Delaware
Alden Resources, LLC	Delaware
Gatliff Services, LLC	Delaware
Alden Sales Corporation, LLC	Delaware
QSIP Sales ULC	Canada
QSIP Canada ULC	Canada
Quebec Silicon LP	Canada
GSM Netherlands, B.V.	Netherlands
(1) The names of other subsidiaries that would not constitute a significant subsidiary in the aggregate have been omitted.

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Globe Specialty Metals, Inc.:

We consent to the incorporation by reference in the Registration Statement (No. 333-163906) on Form S-3,  the Registration Statement (No. 333-162455) on Form S-8 and the Registration Statement (No. 333-172580) on Form S-8 of Globe Specialty Metals, Inc. of our reports dated August 27, 2012, with respect to the consolidated balance sheets of Globe Specialty Metals, Inc. and subsidiary companies as of June 30, 2012 and 2011, and the related consolidated statements of income, changes in stockholders’ equity and cash flows for each of the years in the three-year period ended June 30, 2012, and the effectiveness of internal control over financial reporting as of June 30, 2012, which reports appear in the June 30, 2012 annual report on Form 10-K of Globe Specialty Metals, Inc.

/s/ KPMG LLP

New York, New York

August 27, 2012

EX-31.1

EXHIBIT 31.1

GLOBE SPECIALTY METALS, INC.

 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Jeff Bradley, certify that:

1. I have reviewed this annual report on Form 10-K of Globe Specialty Metals, Inc., a Delaware corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrants internal controls over financial reporting that occurred during the most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

a. all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 27, 2012	By:	/s/ Jeff Bradley
		Jeff Bradley
		Chief Executive Officer and Chief Operating Officer
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

GLOBE SPECIALTY METALS, INC.

 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Malcolm Appelbaum, certify that:

1. I have reviewed this annual report on Form 10-K of Globe Specialty Metals, Inc., a Delaware corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrants internal controls over financial reporting that occurred during the most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

a. all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 27, 2012	By:	/s/ Malcolm Appelbaum
		Malcolm Appelbaum
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION

Each of the undersigned hereby certifies, for the purposes of section 1350 of chapter 63 of title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Globe Specialty Metals, Inc. (“Globe”), that, to his knowledge, the Annual Report of Globe on Form 10-K for the period ended June 30, 2012, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of Globe. This written statement is being furnished to the Securities and Exchange Commission as an exhibit to such Form 10-K. A signed original of this statement has been provided to Globe and will be retained by Globe and furnished to the Securities and Exchange Commission or its staff upon request.

Date: August 27, 2012	By:	/s/ Jeff Bradley
		Jeff Bradley
		Chief Executive Officer and Chief Operating Officer
		(Principal Executive Officer)
Date: August 27, 2012	By:	/s/ Malcolm Appelbaum
		Malcolm Appelbaum
		Chief Financial Officer
		(Principal Financial Officer)

EX-95

EXHIBIT 95

Mine Safety Information

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act) was enacted. Section 1503 of the Act contains new reporting requirements regarding coal or other mine safety.

We are committed to providing a safe workplace for all of our employees. We continue to engage proactively with federal and state agencies in support of measures which can legitimately improve the safety and well-being of our employees.

The operation of our mines is subject to regulation by the federal Mine Safety and Health Administration (MSHA) under the Federal Mine Safety and Health Act of 1977 (the Mine Act). MSHA inspects our mines on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. We present information below regarding certain mining safety and health violations, orders and citations issued by MSHA, as well as related assessments and legal actions with respect to our  mining operations. In evaluating this information, consideration should be given to factors such as: (i) the number of violations, citations and orders will vary depending on the size of the mine, (ii) the number of citations and orders issued will vary from inspector to inspector and mine to mine, and (iii) violations, citations and orders can be contested and appealed, and in that process, may be reduced in severity and amount, and are sometimes dismissed.

The table below includes references to specific sections of the Mine Act. We are providing the information in the table by mining complex because that is how we manage and operate our business. The information in the table reflects violation, citations and orders issued to us by MSHA and related assessments and legal actions during the fiscal year ended June 30, 2012, as reflected in our records. Due to timing and other factors, the data in our system may not agree with the data maintained by MSHA.

Fiscal Year Ended June 30, 2012

 For each mine, of which the issuer or a subsidiary of the issuer is an operator (number of occurrences, except for proposed assessment dollar values).

										(A)
Mine of Operating Name/MSHA Identification Number	Section 104 S&S Citations (#)	Section 104(b) Orders (#)	Section 104(d) Citations and Orders (#)	Section 110(b)(2) Violations (#)	Section 107(a) Orders (#)	Total Dollar Value of MSHA Assessments Proposed ($)	Total Number of Mining Related Fatalities (#)	Received Notice of Pattern of Violations Under Section 104(e) (yes/no)	Received Notice of Potential to Have Pattern Under Section 104(e) (yes/no)	Legal Actions Pending as of Last Day of Period (#)	Legal Actions Initiated During the Period (#)	Legal Actions Resolved During Period (#)
Alden Resources - Maple Creek - 1519614	7	1	0	0	0	$6,298.00	0	No	No	3	1	0
Alden Resources - Mine #6 Engle Hollow- 1519486	6	0	0	0	0	1,948.00	0	No	No	6	21	20
Alden Resources - Westbourne Lane - 4003337	1	0	0	0	0	663.00	0	No	No	4	0	1
Alden Resources - Mine #3 Bain Branch- 1517691	13	0	0	0	0	1,648.00	0	No	No	46	24	31
Alden Resources - Gatliff Plant - 1509938	19	0	0	0	0	8,038.00	0	No	No	19	15	3
Alden Resources - Catron Branch - 1519245	3	0	0	0	0	522.00	0	No	No	0	0	0
Alden Resources - Logan Hollow - 1519387	0	0	0	0	0	-	0	No	No	0	0	0
ARL Resources - Emlyn Tipple - 1508019	0	0	0	0	0	-	0	No	No	0	0	0
Alabama Sand and Gravel: 01-03316 Mims Pit	1	0	0	0	0	1,293.00	0	No	No	0	0	0
(A) The pending legal actions are all contests of citations and orders, which typically are filed prior to an operator's receipt of a proposed penalty assessment from MSHA or relate to orders for which penalties are not assessed (such as imminent danger orders under Section 107 of the Mine Act). This category includes: • contests of citations or orders issued under section 104 of the Mine Act, • contests of imminent danger withdrawal orders under section 107 of the Mine Act, and • emergency response plan dispute proceedings (as required under the Mine Improvement and New Emergency Response Act of 2006, Pub. L. No. 109-236, 120 Stat. 493).

XML

Debt (Tables)

12 Months Ended

Jun. 30, 2012

Debt [Abstract]

Short-term debt

Short-term debt comprises the following:

					Weighted
				Outstanding	Average		Unused
				Balance	Interest Rate		Credit Line
June 30, 2012:
Type debt:
	Export financing		$	—	—	$	9,269
	Other			317	5.00%		—
		Total	$	317		$	9,269
June 30, 2011:
Type debt:
	Export financing		$	731	2.75%	$	8,310
	Other			363	8.00%		—
		Total	$	1,094		$	8,310

Summary of revolving credit agreements

A summary of the Company's revolving credit agreements at June 30, 2012 is as follows:

			Weighted
		Outstanding	Average		Unused	Total
		Balance	Interest Rate		Commitment	Commitment
Revolving multi-currency credit facility	$	128,163	2.00%	$	171,837	300,000
Revolving credit agreement		3,223	5.00%		11,417	14,640
Revolving credit facility		9,000	2.39%		11,000	20,000

XML

Inventories (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Jun. 30, 2011
Inventories [Abstract]
Finished goods	$ 41,550	$ 29,570
Work in process	403	2,078
Raw materials	62,957	67,213
Parts and supplies	14,531	10,431
Total	119,441	109,292
Inventory valued using first-in, first-out method	112,418	102,478
Inventory valued using average cost method	$ 7,023	$ 6,814

XML

Fair Value Measures (Tables)

12 Months Ended

Jun. 30, 2011

Fair Value Measures [Abstract]

Summary of liabilities measured at fair value on recurring basis

The Company does not have any assets that are required to be remeasured at fair value at June 30, 2011. The following table summarizes liabilities measured at fair value on a recurring basis at June 30, 2011:

			Total	Level 1	Level 2	Level 3
Interest rate derivatives		$	320	-	320	-
Power hedge			110	-	110	-
Restricted stock units			130	130	-	-
	Total	$	560	130	430	-

The Company does not have any assets that are required to be remeasured at fair value at June 30, 2010. The following table summarizes liabilities measured at fair value on a recurring basis at June 30, 2010:

			Total	Level 1	Level 2	Level 3
Interest rate derivatives		$	476	-	476	-
Foreign exchange forward contracts			77	-	77	-
Power hedge			243	-	243	-
	Total	$	796	-	796	-

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Fair Value Measures (Details) (Recurring [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Jun. 30, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate derivatives		$ 320
Foreign exchange forward contracts	20
Power hedge	742	110
Restricted stock units	1,282	130
Total	2,044	560
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate derivatives		0
Foreign exchange forward contracts	0
Power hedge	0	0
Restricted stock units	1,282	130
Total	1,282	130
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate derivatives		320
Foreign exchange forward contracts	20
Power hedge	742	110
Restricted stock units	0	0
Total	762	430
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate derivatives		0
Foreign exchange forward contracts	0
Power hedge	0	0
Restricted stock units	0	0
Total	$ 0	$ 0

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Prepaid Expenses and Other Current Assets (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Jun. 30, 2011
Prepaid Expenses and Other Current Assets [Abstract]
Deferred taxes	$ 4,681	$ 5,766
Income tax receivables	6,450	3,777
Value added and other non-income tax receivables	4,370	3,391
Restricted cash	0	4,404
Other	12,414	10,538
Total	$ 27,915	$ 27,876

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Earnings (Loss) Per Share (Tables)

12 Months Ended

Jun. 30, 2012

Earnings (Loss) Per Share [Abstract]

Reconciliation of the amounts used to compute basic and diluted earnings per common share

The reconciliation of the amounts used to compute basic and diluted earnings per common share for the years ended June 30, 2012, 2011, and 2010 is as follows:

	2012		2011		2010
Basic earnings per share computation
Numerator:
Net income attributable to Globe Specialty Metals, Inc.	$	54,570		52,808		34,101
Denominator:
Weighted average basic shares outstanding		75,038,674		74,924,947		73,511,696
Basic earnings per common share	$	0.73		0.70		0.46
Diluted earnings per share computation
Numerator:
Net income attributable to Globe Specialty Metals, Inc.	$	54,570		52,808		34,101
Denominator:
Weighted average basic shares outstanding		75,038,674		74,924,947		73,511,696
Effect of dilutive securities		1,585,218		1,699,398		1,258,451
Weighted average diluted shares outstanding		76,623,892		76,624,345		74,770,147
Diluted earnings per common share	$	0.71		0.69		0.46

Potentially anti-dilutive common shares excluded from the calculation of diluted earnings

The following potential common shares were excluded from the calculation of diluted earnings per common share because their effect would be anti-dilutive:

	2012		2011		2010
Stock options		1,101,079		66,667		160,000

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Estimated Useful Lives of Property, Plant and Equipment

Property, plant, and equipment are recorded at cost. Depreciation is calculated using the straight-line method based on the estimated useful lives of assets. The estimated useful lives of property, plant, and equipment are as follows:

	Range of
	Useful Lives
Asset type:
Land improvements and land use rights	20 to 36 years
Buildings	35 to 40 years
Manufacturing equipment	5 to 25 years
Furnaces	10 to 20 years
Other	2 to 5 years

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Subsequent Events (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	0 Months Ended		1 Months Ended	3 Months Ended
	Oct. 29, 2010	Oct. 15, 2010	Aug. 31, 2012	Sep. 30, 2010	Aug. 17, 2012	Sep. 16, 2010
Subsequent Event [Line Items]
Dividend per common share (in dollars per share)					$ 0.25	$ 0.15
Date of dividends declared				Sep. 16, 2010
Date of stockholders of record		Oct. 15, 2010
Date dividends paid	Oct. 29, 2010
Expense associated with amendments			$ 24,000
Dividends declared [Member]
Subsequent Event [Line Items]
Date of dividends declared			Aug. 17, 2012
Date of stockholders of record			Sep. 05, 2012
Date dividends paid			Sep. 19, 2012

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Goodwill and Other Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010
Goodwill [Roll Forward]
Goodwill	$ 111,159	$ 109,681
Accumulated impairment loss	(57,656)	(57,656)
Quebec Silicon acquisition	3,063
Balance at beginning of period	53,503	52,025
Core Metals purchase price allocation adjustments		1,124
Foreign exchange rate changes	174	354
Goodwill	114,396	111,159	109,681
Accumulated impairment loss	(57,656)	(57,656)	(57,656)
Balance at end of period	56,740	53,503	52,025
Finite-Lived Intangible Assets [Line Items]
Amortization expense	0	0	310
Finite-Lived Intangible Assets, Net, Ending Balance	0	0
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	477	477
GMI [Member]
Goodwill [Roll Forward]
Goodwill	31,529	30,405
Accumulated impairment loss	0	0
Quebec Silicon acquisition	3,063
Balance at beginning of period	31,529	30,405
Core Metals purchase price allocation adjustments		1,124
Foreign exchange rate changes	(1)	0
Goodwill	34,591	31,529
Accumulated impairment loss	0	0
Balance at end of period	34,591	31,529
Globe Metales [Member]
Goodwill [Roll Forward]
Goodwill	14,313	14,313
Accumulated impairment loss	0	0
Quebec Silicon acquisition	0
Balance at beginning of period	14,313	14,313
Core Metals purchase price allocation adjustments		0
Foreign exchange rate changes	0	0
Goodwill	14,313	14,313
Accumulated impairment loss	0	0
Balance at end of period	14,313	14,313
Solsil [Member]
Goodwill [Roll Forward]
Goodwill	57,656	57,656
Accumulated impairment loss	(57,656)	(57,656)
Quebec Silicon acquisition	0
Balance at beginning of period	0	0
Core Metals purchase price allocation adjustments		0
Foreign exchange rate changes	0	0
Goodwill	57,656	57,656
Accumulated impairment loss	(57,656)	(57,656)
Balance at end of period	0	0
Other [Member]
Goodwill [Roll Forward]
Goodwill	7,661	7,307
Accumulated impairment loss	0	0
Quebec Silicon acquisition	0
Balance at beginning of period	7,661	7,307
Core Metals purchase price allocation adjustments		0
Foreign exchange rate changes	175	354
Goodwill	7,836	7,661
Accumulated impairment loss	0	0
Balance at end of period	$ 7,836	$ 7,661

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Related Party Transactions (Details) (USD $)	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010
Marco Realty [Member]
Related Party Transaction [Line Items]
Rent paid to a related party	$ 0	$ 0	$ 166
Marco International [Member]
Related Party Transaction [Line Items]
Purchases from related party	18,136	24,731	21,962
Due to related party	962	2,952
Rare metal purchases from related party	1,013	1,001	0
Other purchases from related party	0	1,001
Sales of products to related party	851	895	590
Other sales of products to related party	137	192
Net sales under agreement	5,611	524	0
Due from related party	1,115	0
Norchem [Member]
Related Party Transaction [Line Items]
Sales of products to related party	5,923	5,575	4,065
Due from related party	622	576
Equity interest in affiliate (in hundredths)	50.00%
Yonvey Minority Stockholder [Member]
Related Party Transaction [Line Items]
Due from related party	$ 1,112	$ 1,086

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Share-Based Compensation

12 Months Ended

Jun. 30, 2012

Share-Based Compensation [Abstract]

Share-Based Compensation

(18) Share-Based Compensation

a.  Stock Plan

The Company's share-based compensation program consists of the Globe Specialty Metals, Inc. 2006 Employee, Director and Consultant Stock Plan (the Stock Plan). The Stock Plan was initially approved by the Company's stockholders on November 10, 2006, and was amended and approved by the Company's stockholders on December 6, 2010 to increase by 1,000,000 the number of shares of common stock authorized for issuance under the Stock Plan. The Stock Plan, as amended, provides for the issuance of a maximum of 6,000,000 shares of common stock for the granting of incentive stock options, nonqualified options, stock grants, and share-based awards. Any remaining shares available for grant, but not yet granted, will be carried over and used in the following fiscal years.

At June 30, 2012, there were 497,633 shares available for grant. During the year ended June 30, 2012, share-based compensation awards were limited to the issuance of 1,013,270 nonqualified stock options and 2,676 restricted stock grants. All option grants have maximum contractual terms ranging from 5 to 10 years. It is the Company's policy to issue new shares to satisfy the requirements of its share-based compensation plan. The Company does not expect to repurchase shares in the future to support its share-based compensation plan.

A summary of the changes in options outstanding under the Stock Plan for the years ended June 30, 2012, 2011, and 2010 is presented below:

	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
Outstanding as of June 30, 2009		4,315,000		$	5.12
Granted		60,000			11.40
Exercised		(98,558	)		6.25
Forfeited and expired		(10,000	)		4.00
Outstanding as of June 30, 2010		4,266,442		$	5.18
Outstanding as of June 30, 2010		4,266,442		$	5.18
Granted		7,960			16.23
Exercised		(878,025	)		6.28
Forfeited and expired		(6,250	)		4.00
Outstanding as of June 30, 2011		3,390,127		$	4.93
Outstanding as of June 30, 2011		3,390,127		$	4.93
Granted		1,013,270			18.58
Exercised		(38,000	)		5.12
Forfeited and expired		—			—
Outstanding as of June 30, 2012		4,365,397		$	8.10		2.65	$	29,690
Exercisable as of June 30, 2012		3,537,189		$	5.67		2.29	$	29,673

The weighted average grant date fair value of stock options granted during the years ended June 30, 2012, 2011, and 2010 was $8.97, $7.34, and $4.46, respectively. The total intrinsic value of options exercised during the years ended June 30, 2012, 2011, and 2010, was $417, $7,194, and $459, respectively.

A summary of the Company's nonvested options as of June 30, 2012, and changes during the year ended June 30, 2012, is presented below:

	Number of Options			Weighted-Average Grant-Date Fair Value Per Share
Nonvested as of June 30, 2011		54,251		$	5.04
Granted		1,013,270			8.97
Vested		(239,313	)		8.35
Forfeited and expired		—			—
Nonvested as of June 30, 2012		828,208		$	8.93

The total fair value of shares vested during the years ended June 30, 2012, 2011, and 2010, was $1,998, $8,397, and $10,323, respectively. The 1,013,270 incentive stock options granted during the year ended June 30, 2012 consisted of 918,750 options which vest and become exercisable in equal one-sixteenth increments every quarter from the date of grant for four years, 27,600 options which vest and become exercisable in equal one-eighth increments every quarter from the date of grant for two years, 61,136 options which vest and become exercisable on December 31, 2014, and 5,784 options which vested and became exercisable on June 30, 2012.

The Company estimates the fair value of grants using the Black-Scholes option pricing model. The following assumptions were used to estimate the fair value of stock option awards granted during the years ended June 30, 2012, 2011, and 2010:

	2012		2011			2010
Risk-free interest rate	0.30 to 0.64%			0.72	%	1.26% to 1.54%
Expected dividend yield		—		—			—
Expected volatility	66.00 to 70.00			73.20		69.10 to 75.20
Expected forfeiture rate		—		—			—
Expected term (years)	3.00 to 4.40			2.79		2.50 to 3.43

The risk-free interest rate is based on the yield of zero coupon U.S. Treasury bonds with terms similar to the expected term of the options. The expected dividend yield for grants is zero given the Company's limited history of dividend issuances and the uncertainty of any future dividend amounts, if any. Since there is limited historical trading data related to the Company's common stock, the expected volatility over the term of the options is estimated using the historical volatilities of similar companies. The expected forfeiture rate is zero as anticipated forfeitures are estimated to be minimal based on historical data. The expected term is the average of the vesting period and contractual term.

For the years ended June 30, 2012, 2011, and 2010, share-based compensation expense was $2,482 ($1,338 after tax), $4,462 ($2,407 after tax), and $5,712 ($3,082 after tax), respectively. The expense is reported within selling, general, and administrative expenses.

As of June 30, 2012, the Company has unearned compensation expense of $6,986, before income taxes, related to nonvested stock option awards. The unrecognized compensation expense is expected to be recognized over the following periods ending on June 30:

	2013		2014		2015		2016		2017
Share-based compensation (pretax)	$	2,352		2,238		2,156		240		—

b.  Executive Bonus Plan

The Company issues restricted stock units under the Company's Executive Bonus Plan. These restricted stock units proportionally vest over three years, but are not delivered until the end of the third year. The Company will settle these awards by cash transfer, based on the Company's stock price on the date of transfer. During the year ended June 30, 2012, 452,142 restricted stock units were granted, and as of June 30, 2012, 487,367 restricted stock units were outstanding. For the year ended June 30, 2012, share-based compensation expense for these restricted stock units was $1,089 ($587 after tax). The expense is reported within selling, general, and administrative expenses. The $1,219 liability associated with these restricted stock units is included in other long-term liabilities at June 30, 2012.

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Unaudited Quarterly Results (Tables)

12 Months Ended

Jun. 30, 2012

Unaudited Quarterly Results [Abstract]

Unaudited Quarterly Results

Unaudited quarterly results for the years ended June 30, 2012 and 2011 were as follows:

		First	Second	Third	Fourth
		Quarter	Quarter	Quarter	Quarter
		(Unaudited)
2012:
Net sales	$	174,862	165,547	173,437	191,698
Operating income		32,465	22,230	19,950	16,780
Net income attributable to Globe Specialty Metals, Inc.		20,693	13,444	11,613	8,820
Basic earnings per common share		0.28	0.18	0.15	0.12
Diluted earnings per common share		0.27	0.18	0.15	0.12
2011:
Net sales	$	137,352	155,775	172,802	175,934
Operating income		8,228	20,229	36,753	29,560
Net income attributable to Globe Specialty Metals, Inc.		2,162	11,708	23,393	15,545
Basic earnings per common share		0.03	0.16	0.31	0.21
Diluted earnings per common share		0.03	0.15	0.30	0.20
2010:
Net sales	$	105,458	108,278	112,486	146,436
Operating income		12,326	30,466	3,307	8,187
Net income attributable to Globe Specialty Metals, Inc.		8,442	18,534	516	6,609
Basic earnings per common share		0.12	0.25	0.01	0.09
Diluted earnings per common share		0.12	0.25	0.01	0.09

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Derivative Instruments (Tables)

12 Months Ended

Jun. 30, 2012

Derivative Instruments [Abstract]

Summary of the effect of derivative instruments on the consolidated income statements

The effect of the Company's derivative instruments on the consolidated statements of income is summarized in the following table:

	(Loss) Gain Recognized During the Years Ended June 30									Location
	2012			2011			2010			of (Loss) Gain
Interest rate derivatives	$	(119	)		(252	)		(1,231	)	Interest expense
Foreign exchange forward contracts		20			(190	)		772		Foreign exchange gain (loss)
Power hedge		(1,272	)		173			(243	)	Cost of goods sold

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Jun. 30, 2012

Goodwill and Other Intangible Assets [Abstract]

Changes in Carrying Amount of Goodwill

Changes in the carrying amount of goodwill, by reportable segment, during the years ended June 30 are as follows:

				Globe
	GMI			Metales		Solsil			Other		Total
Balance at June 30, 2010
Goodwill	$	30,405			14,313		57,656			7,307		109,681
Accumulated impairment loss		—			—		(57,656	)		—		(57,656	)
		30,405			14,313		—			7,307		52,025
Core Metals purchase price allocation adjustments		1,124			—		—			—		1,124
Foreign exchange rate changes		—			—		—			354		354
Balance at June 30, 2011
Goodwill		31,529			14,313		57,656			7,661		111,159
Accumulated impairment loss		—			—		(57,656	)		—		(57,656	)
		31,529			14,313		—			7,661		53,503
Quebec Silicon acquisition		3,063			—		—			—		3,063
Foreign exchange rate changes		(1	)		—		—			175		174
Balance at June 30, 2012
Goodwill		34,591			14,313		57,656			7,836		114,396
Accumulated impairment loss		—			—		(57,656	)		—		(57,656	)
	$	34,591			14,313		—			7,836		56,740

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Summary of Significant Accounting Policies (Details)	12 Months Ended
	Jun. 30, 2012
Land Improvements and Land Use Rights [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful lives	20 years
Land Improvements and Land Use Rights [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful lives	36 years
Buildings [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful lives	35 years
Buildings [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful lives	40 years
Manufacturing Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful lives	5 years
Manufacturing Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful lives	25 years
Furnaces [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful lives	10 years
Furnaces [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful lives	20 years
Other [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful lives	2 years
Other [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful lives	5 years

XML

Stockholders' Equity (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended		3 Months Ended	12 Months Ended								1 Months Ended		12 Months Ended					12 Months Ended
	Oct. 29, 2010	Oct. 15, 2010	Sep. 30, 2010	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2009	Aug. 17, 2012	Sep. 16, 2010	Aug. 31, 2009	Oct. 03, 2005	Feb. 28, 2011 Solsil [Member]	Apr. 30, 2008 Solsil [Member]	Jun. 30, 2012 Solsil [Member]	Jun. 30, 2008 Solsil [Member]	Jun. 30, 2012 Quebec Silicon Limited Partnership [Member]	Jun. 30, 2010 Sale of a 49% membership interest in WVA LLC [Member]	Nov. 05, 2009 Sale of a 49% membership interest in WVA LLC [Member]	Jun. 30, 2012 Quebec Silicon Limited Partnership [Member]	Jun. 30, 2010 Common Stock [Member]	Jun. 30, 2009 Common Stock [Member]	Jun. 30, 2008 Common Stock [Member]	Jun. 30, 2009 UPO [Member]	Jun. 30, 2008 UPO [Member]	Oct. 03, 2005 UPO [Member]	Jun. 30, 2012 Warrant [Member]	Jun. 30, 2009 Warrant [Member]	Jun. 30, 2008 Warrant [Member]	Oct. 03, 2005 Warrant [Member]
Common Stock [Abstract]
Initial public offering - shares issued (in shares)							16,100,000													5,600,000
New shares issued (in shares)										5,600,000
Price per share (in dollars per share)										$ 7.00
Existing shares offered by selling stockholders (in shares)										10,500,000
Proceeds from issuance initial public offering, net of discounts and commissions						$ 36,456
Share sold pursuant to an underwriter's over-allotment option (in shares)										2,100,000
Underwriting discounts and commissions						2,744
Preferred Stock [Abstract]
Preferred Stock, Shares Authorized				1,000,000
Warrants [Abstract]
Redeemable common stock purchase warrants (in shares)											33,500,000
Exercise price (in dollars per share)																									$ 7.50				$ 5.00
Options to purchase warrants (in shares)																									1,675,000
Warrants exercised (in shares)																											166,668	699,440
Cashless exercise of UPOs (in shares)																							282,128	67,458
Warrants Issued (in shares)																					242,753	50,131					485,505	100,262
Warrants conversion factor							5.5 warrants for one share of the Company's common stock																			Each UPO consists of one share of the Company's common stock and two redeemable common stock purchase warrants
Warrants converted to common stock (in shares)																					3,484,417						19,164,294
Shares issued (in shares)																				1,775,933
Proceeds from Warrant Exercises				0	0	1,287														1,497
Treasury Stock [Abstract]
Authorized amount							25,000
Treasury stock purchased (in shares)							1,000
Average cost per share (in dollars per share)							$ 4.00
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Business Divestiture, Percentage of Business Sold																		49.00%
Increase in non controlling interest																	27,012		46,762
Dividends [Abstract]
Date dividend declared			Sep. 16, 2010
Dividend per common share (in dollars per share)								$ 0.25	$ 0.15
Total dividends paid	11,269
Date dividends paid	Oct. 29, 2010
Date of stockholders of record		Oct. 15, 2010
Business Acquisition [Line Items]
Company's ownership interest (in hundredths)														97.25%	81.00%	51.00%
Shares issued to former shareholders (in shares)															5,628,657
Shares issued to former shareholders and placed in escrow (in shares)															562,867
Shares released from escrow (in shares)												281,437	281,430
Purchase of all shares held by one of the minority partners														150
New shares issued and sold to the Company														3,500
Company's ownership interest after all transactions (in hundredths)														97.25%	81.00%	51.00%
Noncontrolling Interest [Abstract]
Increase ownership by noncontrolling interest														$ 3,500

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Other Long-Term Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Jun. 30, 2011
Other Long-Term Liabilities [Abstract]
Accrued pension and postretirement benefits liability	$ 34,076	$ 7,716
Capital lease obligations	11,742	0
Acquired contract obligations	10,949	0
Retained acquisition contingencies	4,931	5,791
Asset retirement obligation	3,424	0
Other	5,681	3,717
Total	$ 70,803	$ 17,224

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Share-Based Compensation (Tables)

12 Months Ended

Jun. 30, 2012

Share-Based Compensation [Abstract]

Summary of Changes In Options Outstanding

A summary of the changes in options outstanding under the Stock Plan for the years ended June 30, 2012, 2011, and 2010 is presented below:

	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
Outstanding as of June 30, 2009		4,315,000		$	5.12
Granted		60,000			11.40
Exercised		(98,558	)		6.25
Forfeited and expired		(10,000	)		4.00
Outstanding as of June 30, 2010		4,266,442		$	5.18
Outstanding as of June 30, 2010		4,266,442		$	5.18
Granted		7,960			16.23
Exercised		(878,025	)		6.28
Forfeited and expired		(6,250	)		4.00
Outstanding as of June 30, 2011		3,390,127		$	4.93
Outstanding as of June 30, 2011		3,390,127		$	4.93
Granted		1,013,270			18.58
Exercised		(38,000	)		5.12
Forfeited and expired		—			—
Outstanding as of June 30, 2012		4,365,397		$	8.10		2.65	$	29,690
Exercisable as of June 30, 2012		3,537,189		$	5.67		2.29	$	29,673

Schedule of Nonvested Share Activity

A summary of the Company's nonvested options as of June 30, 2012, and changes during the year ended June 30, 2012, is presented below:

	Number of Options			Weighted-Average Grant-Date Fair Value Per Share
Nonvested as of June 30, 2011		54,251		$	5.04
Granted		1,013,270			8.97
Vested		(239,313	)		8.35
Forfeited and expired		—			—
Nonvested as of June 30, 2012		828,208		$	8.93

Assumptions used to estimate fair value of stock option awards using the Black-Scholes model

The Company estimates the fair value of grants using the Black-Scholes option pricing model. The following assumptions were used to estimate the fair value of stock option awards granted during the years ended June 30, 2012, 2011, and 2010:

	2012		2011			2010
Risk-free interest rate	0.30 to 0.64%			0.72	%	1.26% to 1.54%
Expected dividend yield		—		—			—
Expected volatility	66.00 to 70.00			73.20		69.10 to 75.20
Expected forfeiture rate		—		—			—
Expected term (years)	3.00 to 4.40			2.79		2.50 to 3.43

Schedule of Unrecognized Compensation Cost, Nonvested Awards

As of June 30, 2012, the Company has unearned compensation expense of $6,986, before income taxes, related to nonvested stock option awards. The unrecognized compensation expense is expected to be recognized over the following periods ending on June 30:

	2013		2014		2015		2016		2017
Share-based compensation (pretax)	$	2,352		2,238		2,156		240		—

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Summary of Significant Accounting Policies

12 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

(2) Summary of Significant Accounting Policies

a.  Basis of Presentation and Principles of Consolidation

The Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). When the Company does not have a controlling interest in an entity, but exerts significant influence over the entity, the Company applies the equity method of accounting. For investments in which the Company does not have significant influence, the cost method of accounting is used.

The Company also evaluates the consolidation of entities under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 810, Consolidation (ASC 810). ASC 810 requires management to evaluate whether an entity or interest is a variable interest entity and whether the Company is the primary beneficiary. Consolidation is required if both of these criteria are met. The Company does not have any variable interest entities requiring consolidation.

All intercompany balances and transactions have been eliminated in consolidation.

b.  Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and related notes. Significant estimates and assumptions in these consolidated financial statements include the valuation of inventories; the depreciable lives for property, plant, and equipment; estimates of fair value associated with accounting for business combinations; goodwill and long-lived asset impairment tests; income taxes and deferred tax valuation allowances; valuation of derivative instruments; the determination of the discount rate and the rate of return on plan assets for pension expense (benefit); and the determination of the fair value of share-based compensation, involving assumptions about forfeiture rates, stock volatility, discount rates, expected dividend yield, and expected time to exercise. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates.

c.  Revenue Recognition

Revenue is recognized in accordance with ASC Topic 605, Revenue Recognition (ASC 605), when a firm sales agreement is in place, delivery has occurred and title and risks of ownership have passed to the customer, the sales price is fixed or determinable, and collectability is reasonably assured. Shipping and other transportation costs charged to buyers are recorded in both net sales and cost of goods sold. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from net sales. When the Company provides a combination of products and services to customers, the arrangement is evaluated under ASC Subtopic 605-25, Revenue Recognition — Multiple ElementArrangements (ASC 605.25). ASC 605.25 addresses certain aspects of accounting by a vendor for arrangements under which the vendor will perform multiple revenue-generating activities. If the Company cannot objectively determine the fair value of any undelivered elements under an arrangement, the Company defers revenue until all elements are delivered and services have been performed, or until fair value can objectively be determined for any remaining undelivered elements.

d.  Foreign Currency Translation

The determination of the functional currency for the Company's foreign subsidiaries is made based on appropriate economic factors, including the currency in which the subsidiary sells its products, the market in which the subsidiary operates, and the currency in which the subsidiary's financing is denominated. Based on these factors, management has determined that the U.S. dollar is the functional currency for Globe Metales. The U.S. dollar was also the functional currency for Globe Metais prior to its divestiture. The functional currency for Yonvey is the Chinese renminbi. Yonvey's assets and liabilities are translated using current exchange rates in effect at the balance sheet date and for income and expense accounts using average exchange rates. The functional currency for Quebec Silicon is the Canadian dollar. Quebec Silicon's assets and liabilities are translated using current exchange rates in effect at the balance sheet date and for income and expense accounts using average exchange rates.  Resulting translation adjustments are reported as a separate component of stockholders' equity. Translation gains and losses are recognized on transactions in currencies other than the subsidiary's functional currency and included in the consolidated statement of income for the period in which the exchange rates changed.

e.  Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments that are readily convertible into cash. Securities with contractual maturities of three months or less, when purchased, are cash equivalents. The carrying amount of these securities approximates fair value because of the short-term maturity of these instruments.

Refer to note 3 (Business Combinations, Investments, and Divestitures) and note 16 (Stockholders' Equity) for supplemental disclosures of noncash investing and financing activities.

f.  Inventories

Inventories are valued at the lower of cost or market value, which does not exceed net realizable value. Cost of inventories is determined either by the first-in, first-out method or by the average cost method. When circumstances indicate a potential recoverability issue, tests are performed to assess the market value, and as necessary, an inventory write-down is recorded for obsolete, slow moving, or defective inventory. Management estimates market and net realizable value based on current and expected future selling prices for our inventories, as well as the expected utilization of parts and supplies in our manufacturing process.

g.  Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost. Depreciation is calculated using the straight-line method based on the estimated useful lives of assets. The estimated useful lives of property, plant, and equipment are as follows:

	Range of
	Useful Lives
Asset type:
Land improvements and land use rights	20 to 36 years
Buildings	35 to 40 years
Manufacturing equipment	5 to 25 years
Furnaces	10 to 20 years
Other	2 to 5 years

Costs that do not extend the life of an asset, materially add to its value, or adapt the asset to a new or different use are considered repair and maintenance costs and expensed as incurred.

Cost for mineral properties and mine development costs, which are incurred to expand capacity of operating mines or to develop new mines, are capitalized and charged to operations based on the units-of production method over the estimated proven and probable reserve tons and based on the average useful life of the mine, respectively. Mine development costs include costs incurred for site preparation and development of the mines during the development stage.

h.  Business Combinations

When the Company acquires a business, the purchase price is allocated based on the fair value of tangible assets and identifiable intangible assets acquired, and liabilities assumed. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Goodwill as of the acquisition date is measured as the residual of the excess of the consideration transferred, plus the fair value of any noncontrolling interest in the acquiree at the acquisition date, over the fair value of the identifiable net assets acquired. If the fair value of the net assets acquired exceeds the purchase price, the resulting bargain purchase is recognized as a gain in the statement of income. Prior to the adoption of ASC Subtopic 805-10, Business Combinations (ASC 805-10), the resulting negative goodwill was allocated as a pro rata reduction of the values of acquired nonmonetary assets. The Company generally engages independent, third-party appraisal firms to assist in determining the fair value of assets acquired and liabilities assumed. Such a valuation requires management to make significant estimates, especially with respect to intangible assets. These estimates are based on historical experience and information obtained from the management of the acquired companies. These estimates are inherently uncertain. For all acquisitions, operating results are included in the consolidated statement of income from the date of acquisition.

i.  Goodwill and Other Intangible Assets

Goodwill as of the acquisition date is measured as the residual of the excess of the consideration transferred, plus the fair value of any noncontrolling interest in the acquiree at the acquisition date, over the fair value of the identifiable net assets acquired. In accordance with ASC Topic 350, Intangibles — Goodwill and Other (ASC 350), goodwill is tested for impairment annually at the end of the third quarter, and will be tested for impairment between annual tests if an event occurs or circumstances change that more likely than not would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level. Reporting units are at the reportable segment level, or one level below the reportable segment level for our GMI and Other reportable segments, and are aligned with our management reporting structure. Goodwill relates and is assigned directly to a specific reporting unit.

Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds the implied fair value of goodwill of the reporting unit. Refer to note 3 (Business Combinations, Investments, and Divestitures), and note 7 (Goodwill and Other Intangibles) for additional information.

Trade names have indefinite lives and are not amortized but rather tested annually for impairment and written down to fair value as required.

j.  Impairment of Long-Lived Assets

In accordance with ASC Topic 360, Property, Plant, and Equipment (ASC 360), the Company reviews the recoverability of its long-lived assets, such as plant and equipment and definite-lived intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on the Company's ability to recover the carrying value of the asset or asset group from the expected future undiscounted pretax cash flows of the related operations. The Company assesses the recoverability of the carrying value of long-lived assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is measured based on the difference between estimated fair value and carrying value. Assets to be disposed are written down to the lower of carrying amount or fair value less costs to sell, and depreciation ceases. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary.

k.  Share-Based Compensation

The Company recognizes share-based compensation expense based on the estimated grant date fair value of share-based awards using a Black-Scholes option pricing model. Prior to vesting, cumulative compensation cost equals the proportionate amount of the award earned to date. The Company has elected to treat each award as a single award and recognize compensation cost on a straight-line basis over the requisite service period of the entire award. If the terms of an award are modified in a manner that affects both the fair value and vesting of the award, the total amount of remaining unrecognized compensation cost (based on the grant-date fair value) and the incremental fair value of the modified award are recognized over the amended vesting period.

Refer to note 18 (Share-Based Compensation) for further information on the Company's accounting for share-based compensation.

l.  Restructuring Charges

Restructuring activities are programs planned and controlled by management that materially change either the scope of the business undertaken by the Company or the manner in which business is conducted. Restructuring activities include, but are not limited to, one-time termination benefits provided to current employees that are involuntarily terminated, costs to terminate a contract that is not a capital lease, and costs to consolidate facilities and relocate employees. Restructuring charges are recognized in accordance with ASC Topic 420, Exit or Disposal Cost Obligations (ASC 420), which requires a liability for a cost associated with an exit or disposal activity to be recognized at its fair value in the period in which the liability is incurred, except for a liability for one-time termination benefits that is incurred over time. In periods subsequent to initial measurement, changes to a restructuring liability are measured using the credit-adjusted risk-free rate that was used to measure the liability initially.

m.  Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of income in the period that includes the enactment date. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

The Company has adopted the amendment to ASC Subtopic 740-10, Income Taxes (ASC 740-10), which provides a comprehensive model for the recognition, measurement, and disclosure in financial statements of uncertain income tax positions that a company has taken or expects to take on a tax return. Under ASC 740-10, a company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Additionally, companies are required to accrue interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. The Company has elected to recognize interest expense and penalties related to uncertain tax positions as a component of its provision for income taxes.

n.  Financial Instruments

The Company accounts for derivatives and hedging activities in accordance with ASC Topic 815, Derivatives and Hedging (ASC 815). ASC 815 requires that all derivative instruments be recorded on the balance sheet at their respective fair values. The Company's derivative instruments consist of an interest rate cap and interest rate swaps employed to manage interest rate exposures on long-term debt discussed in note 9 (Debt) and a power hedge and foreign exchange forward contracts to manage commodity price and foreign currency exchange exposures discussed in note 12 (Derivative Instruments).

o.  Accounting Pronouncements to be Implemented

In June 2011, the FASB issued Accounting Standards Update No. 2011-05, Comprehensive Income(Topic 220): Presentation of Comprehensive Income (ASU 2011-05). The objective of this amendment is to increase the prominence of other comprehensive income in the financial statements. The amendments require entities to report components of net income and the components of other comprehensive income either in a continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, the amendments in ASU 2011-05 require an entity to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statements where the components of net income and the components of other comprehensive income are presented.  In December 2011, the FASB issued Accounting Standards Update No. 2011-12, which deferred the specific requirements related to the presentation of reclassification adjustments. This amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.We expect the adoption of this ASU will affect financial statement presentation only.

 

In September 2011, FASB issued Accounting Standards Update No. 2011-08, Testing Goodwill for Impairment (ASU 2011-08), which amends the guidance in ASC 350-20. The amendments in ASU 2011-08 provide entities with the option of performing a qualitative assessment before performing the first step of the two-step impairment test. If entities determine, on the basis of qualitative factors, it is not more likely than not that the fair value of the reporting unit is less than the carrying amount, then performing the two-step impairment test would be unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any. ASU 2011-08 also provides entities with the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to the first step of the two-step impairment test. ASU 2011-08 is effective for interim and annual periods beginning after December 15, 2011 but early adoption is permitted. The Company does not expect material financial statement implications relating to the adoption of this ASU.

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Derivative Instruments (Details) In Thousands, except Per Share data, unless otherwise specified		12 Months Ended					12 Months Ended				12 Months Ended					12 Months Ended
	Jun. 30, 2012 USD ($)	Jun. 30, 2012 Interest Rate Derivatives [Member] Interest Expense [Member] USD ($)	Jun. 30, 2011 Interest Rate Derivatives [Member] Interest Expense [Member] USD ($)	Jun. 30, 2010 Interest Rate Derivatives [Member] Interest Expense [Member] USD ($)	Jun. 30, 2012 Foreign Exchange Forward [Member] USD ($)	Jun. 30, 2012 Foreign Exchange Forward [Member] EUR (€)	Jun. 30, 2012 Foreign Exchange Forward [Member] Foreign Exchange Gain (Loss) [Member] USD ($)	Jun. 30, 2011 Foreign Exchange Forward [Member] Foreign Exchange Gain (Loss) [Member] USD ($)	Jun. 30, 2010 Foreign Exchange Forward [Member] Foreign Exchange Gain (Loss) [Member] USD ($)	Jun. 30, 2012 Power Hedges [Member] USD ($)	Jun. 30, 2012 Power Hedges [Member] Cost of Goods Sold [Member] USD ($)	Jun. 30, 2011 Power Hedges [Member] Cost of Goods Sold [Member] USD ($)	Jun. 30, 2010 Power Hedges [Member] Cost of Goods Sold [Member] USD ($)	Jun. 30, 2012 Canadian Dollar [Member]	Jun. 30, 2012 Euro [Member]	Jun. 30, 2011 Power Hedge June 2010 [Member] USD ($)	Jun. 30, 2011 Power Hedge October 2010 [Member] USD ($)
Derivative [Line Items]
Revolving credit facility face value	$ 300,000
Average forward exchange rate														1.30	1.00
Expiration date of agreement																Jun. 30, 2012	Jun. 30, 2013
Notional amount of electricity supplied per agreement (in MWh)																175,440	87,600
Electricity supplied as a percentage of plant's total power requirement (in hundredths)																20.00%
Fixed power rate, price per MWh																$ 39.60	$ 39.95
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized		(119)	(252)	(1,231)			20	(190)	772		(1,272)	173	(243)
Notional value						7,500
Fair value of derivatives					$ 20					$ 742

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Pension Plans (Tables)

12 Months Ended

Jun. 30, 2012

Pension Plans [Abstract]

Reconciliation of benefit obligations, plan assets, and funded status of defined benefit plans

Benefit Obligations and Funded Status — The following provides a reconciliation of the benefit obligations, plan assets, and funded status of the plans at June 30, 2012 and 2011:

				Pension Plans			Nonpension Postretirement Plan
				2012	2011		2012	2011
Change in benefit obligations:
	Benefit obligations at beginning of year		$	30,218	28,367	$	—	—
	Acquisition of business			23,827	—		11,906	—
	Interest cost			1,553	1,439		—	—
	Service cost			102	114		—	—
	Amendments			465	—		—	—
	Actuarial loss			6,860	1,698		—	—
	Benefits paid			(1,430)	(1,400)		—	—
		Benefit obligations at end of year	$	61,595	30,218	$	11,906	—
Change in plan assets:
	Fair value of plan assets at beginning of year		$	22,502	19,249	$	—	—
	Acquisition of business			14,328	—		—	—
	Actual gain on plan assets			1,543	3,573		—	—
	Employer contributions			2,482	1,080		—	—
	Benefits paid			(1,430)	(1,400)		—	—
		Fair value of plan assets at end of year	$	39,425	22,502	$	—	—
Funded status at end of year:
	Fair value of plan assets		$	39,425	22,502	$	—	—
	Benefit obligations			61,595	30,218		11,906	—
		Funded status	$	(22,170)	(7,716)	$	(11,906)	—
Amounts recognized in the consolidated balance sheet consist of:
	Noncurrent liability		$	(22,170)	(7,716)	$	11,802	—
	Current liability			—	—		104	—
	Accumulated other comprehensive loss			13,008	6,356		—	—

Components of net periodic pension expense

Net Periodic Pension Expense — The components of net periodic pension expense (benefit) for the Company's defined benefit pension plans are as follows:

			2012	2011	2010
Interest cost		$	1,553	1,439	1,285
Service cost			102	114	26
Expected return on plan assets			(1,737)	(1,487)	(1,075)
Amortization of net loss			866	678	572
	Net periodic pension expense	$	784	744	808

Assumptions used to determine benefit obligations and net periodic expense

Assumptions and Other Data — The assumptions used to determine benefit obligations at June 30, 2012 and 2011 follow:

	Pension Plans		Nonpension Postretirement Plans
	2012	2011	2012	2011
Discount rate	3.5% - 5.0%	5.25% - 5.30%	5.10%	—

The assumptions used to determine net periodic expense for the Company's defined benefit pension plans for years ended June 30, 2012, 2011, and 2010 are as follows:

	2012	2011	2010
Discount rate	5.00% - 5.30%	5.25%	5.85% - 6.25%
Expected return on plan assets	5.50% - 8.00%	8.00% - 8.50%	8.00% - 8.50%

Expected future benefit payments

The following reflects the gross benefit payments that are expected to be paid for the benefit plans for the years ended June 30:

		Pension Plans		Nonpension Postretirement Plans
2013	$	2,555	$	104
2014		2,788		153
2015		2,981		209
2016		3,193		259
2017		3,305		303
Years 2018-2022		17,398		2,066

Allocation of plan assets

The Company's overall strategy is to invest in high-grade securities and other assets with a limited risk of market value fluctuation. In general, the Company's goal is to maintain the following allocation ranges:

Equity securities	55 - 70%
Fixed income securities	30 - 40
Real estate	5 - 10

Schedule of benefit plan assets, fair value hierarchy [Table Text Block]

The fair values of the Company's pension plan assets as of June 30, 2012 are as follows:

			Quoted Prices in Active Markets for Identical Assets	Significant Observable Inputs
			(Level 1)	(Level 2)	Total
Cash and cash equivalents		$	418	—	418
Equity securities:
	Domestic equity mutual funds		4,307	—	4,307
	International equity mutual funds		3,707	—	3,707
	Commingled domestic equity funds		—	3,253	3,253
	Commingled international equity funds		—	6,339	6,339
Fixed income securities:					—
	Fixed income mutual funds		9,348	—	9,348
	Commingled fixed income funds		—	11,082	11,082
Real estate mutual funds			971	—	971
		$	18,751	20,674	39,425

The fair values of the Company's pension plan assets as of June 30, 2011 are as follows:

			Quoted Prices in Active Markets for Identical Assets	Significant Observable Inputs
			(Level 1)	(Level 2)	Total
Cash and cash equivalents		$	341	—	341
Equity securities:
	Domestic equity mutual funds		5,083	—	5,083
	International equity mutual funds		2,573	—	2,573
	Commingled domestic equity funds		—	3,374	3,374
Fixed income securities:					—
	Fixed income mutual funds		8,212	—	8,212
	Commingled fixed income funds		—	2,037	2,037
Real estate mutual funds			882	—	882
		$	17,091	5,411	22,502

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Business Interruption Insurance Recovery

12 Months Ended

Jun. 30, 2012

Business Interruption Insurance Recovery [Abstract]

Business Interruption Insurance Recovery

(22)   Business Interruption Insurance Recovery

In November 2011, there was a fire at the Bridgeport, Alabama ferrosilicon plant. The Company recorded and received a business interruption insurance recovery as of June 30, 2012.

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Operating Segments

12 Months Ended

Jun. 30, 2012

Operating Segments [Abstract]

Operating Segments

(21) Operating Segments

Operating segments are based upon the Company's management reporting structure and include the following six reportable segments:

• GMI — a manufacturer of silicon metal and silicon-based alloys and a provider of specialty metallurgical coal for the silicon metal and silicon-based alloys industries located in North America.

• Globe Metais — a distributor of silicon metal manufactured in Brazil. This segment includes the historical Brazilian manufacturing operations, comprised of a manufacturing plant in Breu Branco, mining operations, and forest reserves, which were sold on November 5, 2009.

• Globe Metales — a manufacturer of silicon-based alloys located in Argentina.

• Solsil — a manufacturer of upgraded metallurgical grade silicon metal located in the United States.

• Corporate — general corporate expenses, investments, and related investment income.

• Other — operations that do not fit into the above reportable segments and are immaterial for purposes of separate disclosure. The operating segments include Yonvey's electrode production operations and certain other distribution operations for the sale of silicon metal and silicon-based alloys.

Each of our reportable segments distributes its products in both its country of domicile, as well as to other international customers. The following presents the Company's consolidated net sales by product line for the years ended:

			2012	2011	2010
Silicon metal		$	360,726	347,599	296,763
Silicon-based alloys			269,919	236,607	148,092
Other			74,899	57,657	27,803
	Total	$	705,544	641,863	472,658

a.  Segment Data

Summarized financial information for our reportable segments as of, and for, the years ended June 30, 2012, 2011, and 2010 are shown in the following tables:

		2012
		Net Sales	Depreciation and Amortization	Operating Income (Loss)	Interest Income	Interest Expense (1)	Income (Loss) Before Income Taxes	Total Assets	Capital Expenditures
GMI	$	631,495	29,261	103,542	1	(5,807)	98,297	679,516	(36,126)
Globe Metais		—	—	(2)	—	—	(2)	—	—
Globe Metales		64,063	1,766	11,332	49	(1,145)	10,422	86,302	(1,926)
Solsil		—	488	(984)	—	—	(984)	30,057	(691)
Corporate		—	424	(27,268)	777	(739)	(25,570)	469,137	(2,675)
Other		28,216	2,061	490	—	(503)	158	41,538	(418)
Eliminations		(18,230)	—	4,315	(584)	584	4,315	(369,803)	—
	$	705,544	34,000	91,425	243	(7,610)	86,636	936,747	(41,836)

		2011
		Net Sales	Depreciation and Amortization	Operating Income (Loss)	Interest Income	Interest Expense (1)	Income (Loss) Before Income Taxes	Total Assets	Capital Expenditures
GMI	$	549,418	20,430	103,685	5	1,775	102,240	384,495	31,061
Globe Metais		15,421	—	397	—	—	398	294	—
Globe Metales		62,321	1,634	13,197	—	1,050	12,669	82,751	1,023
Solsil		9,420	488	8,670	—	—	8,670	29,191	165
Corporate		—	426	(29,606)	816	470	(30,086)	403,177	1,226
Other		32,325	2,077	31	1	511	428	43,317	1,564
Eliminations		(27,042)	—	(1,604)	(608)	(608)	(1,605)	(264,956)	—
	$	641,863	25,055	94,770	214	3,198	92,714	678,269	35,039

		2010
		Net Sales	Depreciation and Amortization	Operating Income (Loss)	Interest Income	Interest Expense (1)	Income (Loss) Before Income Taxes	Total Assets	Capital Expenditures
GMI	$	358,279	15,812	41,126	42	2,368	39,107	324,680	18,971
Globe Metais		62,126	776	5,263	178	525	8,579	8,192	208
Globe Metales		48,959	1,820	10,073	—	1,090	10,069	71,790	996
Solsil		20	508	(1,375)	—	30	(1,405)	30,526	(1,410)
Corporate		—	122	2,815	619	317	2,836	415,184	1,273
Other		12,557	1,634	(4,273)	6	569	(5,036)	41,508	2,863
Eliminations		(9,283)	—	657	(527)	(527)	657	(284,735)	—
	$	472,658	20,672	54,286	318	4,372	54,807	607,145	22,901

1 — Net of capitalized interest.

The accounting policies of our operating segments are the same as those disclosed in note 2 (Summary of Significant Accounting Policies). We evaluate segment performance principally based on operating income (loss). Intersegment net sales are not material.

b.  Geographic Data

Net sales are attributed to geographic regions based upon the location of the selling unit. Net sales by geographic region for the years ended June 30, 2012, 2011, and 2010 consist of the following:

			2012	2011	2010
United States		$	625,681	574,181	407,455
Argentina			57,154	54,695	42,101
Brazil			—	—	12,820
Canada			5,520	—	—
China			3,131	899	592
Poland			14,058	12,088	9,690
	Total	$	705,544	641,863	472,658

Long-lived assets by geographical region at June 30, 2012, 2011, and 2010 consist of the following:

			2012	2011	2010
United States		$	330,724	224,556	211,876
Argentina			31,185	31,054	31,665
Canada			100,842	—	—
China			26,288	27,524	27,428
Poland			939	823	800
	Total	$	489,978	283,957	271,769

Long-lived assets consist of property, plant, and equipment, net of accumulated depreciation, depletion and amortization, and goodwill and other intangible assets.

c.  Major Customer Data

The following is a summary of the Company's major customers and their respective percentages of consolidated net sales for the years ended June 30, 2012, 2011, and 2010:

		2012	2011	2010
Dow Corning		13%	17%	30%
All other customers		87	83	70
	Total	100%	100%	100%

The majority of sales to Dow Corning for the years ended June 30, 2012 and 2011 are associated with Dow Corning's 49% ownership interest in WVA LLC. In addition, the Company maintained a four year arrangement in which Dow Corning was to purchase 30,000 metric tons of silicon metal per calendar year through December 31, 2010. This contract was amended in November 2008 to provide for the sale of an additional 17,000 metric tons of silicon metal to be purchased in calendar year 2009. The contract was further amended in connection with the Dow Corning transactions discussed in note 3 to reduce the amount required to be sold in calendar year 2010 to 20,000 metric tons of silicon metal. In December 2010, the Company agreed to pay $4,276 to Dow Corning to settle certain remaining sales obligations under this contract. The settlement cost was recorded in cost of goods sold in December 2010.

Sales to Dow Corning are included in the GMI segment.

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Property, Plant, and Equipment (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010
Property, plant and equipment, net [Abstract]
Property, plant, and equipment, gross	$ 543,955	$ 307,787
Less accumulated depreciation, depletion and amortization	(111,194)	(77,810)
Property, plant, and equipment, net of accumulated depreciation, depletion and amortization	432,761	229,977
Depreciation [Abstract]
Depreciation expense	34,848	25,055	20,362
Depreciation expense recorded in cost of goods sold	34,083	24,330	19,912
Depreciation expense recorded in selling and general administrative expenses	765	725	450
Capitalized interest	24	52	376
Land, Land Improvements, and Land Use Rights [Member]
Property, plant and equipment, net [Abstract]
Property, plant, and equipment, gross	10,831	6,907
Building and Improvements [Member]
Property, plant and equipment, net [Abstract]
Property, plant, and equipment, gross	76,395	43,076
Machinery and Equipment [Member]
Property, plant and equipment, net [Abstract]
Property, plant, and equipment, gross	175,305	93,891
Furnaces [Member]
Property, plant and equipment, net [Abstract]
Property, plant, and equipment, gross	193,055	136,177
Mineral Reserves [Member]
Property, plant and equipment, net [Abstract]
Property, plant, and equipment, gross	55,843	0
Mine Development [Member]
Property, plant and equipment, net [Abstract]
Property, plant, and equipment, gross	4,058	0
Other [Member]
Property, plant and equipment, net [Abstract]
Property, plant, and equipment, gross	4,852	3,993
Construction in Progress [Member]
Property, plant and equipment, net [Abstract]
Property, plant, and equipment, gross	$ 23,616	$ 23,743

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Income Taxes (Tables)

12 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

Schedule of income before income tax and noncontrolling interest

The sources of income before provision for income taxes and income attributable to noncontrolling interest for the years ended June 30, 2012, 2011, and 2010 were as follows:

			2012	2011	2010
U.S. operations		$	73,859	87,096	21,865
Non-U.S. operations			12,777	5,618	32,942
	Total	$	86,636	92,714	54,807

Schedule of components of current and deferred income tax expense

The components of current and deferred income tax expense are as follows:

				2012	2011	2010
Current:
	Federal		$	13,506	16,113	10,471
	State			1,996	1,982	2,686
	Foreign			3,946	4,355	14,446
		Total current		19,448	22,450	27,603
Deferred:
	Federal			8,257	12,622	(3,745)
	State			1,244	1,107	(3,315)
	Foreign			(189)	(191)	(4)
		Total deferred		9,312	13,538	(7,064)
		Total provision for income taxes	$	28,760	35,988	20,539

Effective income tax rate reconciliation

The following is a reconciliation, stated in percentage, of the U.S. statutory federal income tax rate to our effective tax rate for the years ended June 30, 2012, 2011, and 2010:

		2012	2011	2010
Federal statutory rate		35.0%	35.0%	35.0%
State taxes, net of federal benefit		2.4	2.6	(3.6)
Foreign tax holiday and rate differential		(1.8)	0.7	2.3
Change in valuation allowance		1.1	(0.2)	5.5
Domestic production activities deduction		(1.9)	(1.7)	(1.2)
Other items		(1.6)	2.4	(0.5)
	Effective tax rate	33.2%	38.8%	37.5%

Schedule of components of deferred tax assets and deferred tax liabilities

Significant components of the Company's deferred tax assets and deferred tax liabilities at June 30, 2012 and 2011 consist of the following:

				2012	2011
Deferred tax assets:
	Inventories		$	3,676	2,414
	Accounts receivable			198	139
	Accruals			9,322	6,673
	Deferred Revenue			178	298
	Net operating losses and other carryforwards			16,223	17,999
	Other assets			901	259
	Share-based compensation			5,104	4,868
		Gross deferred tax assets		35,602	32,650
	Valuation allowance			(10,340)	(8,754)
		Net deferred tax assets		25,262	23,896
Deferred tax liabilities:
	Fixed assets			(46,257)	(39,340)
	Prepaid expenses			(1,861)	(899)
	Intangibles			(1,147)	(974)
		Total deferred tax liabilities		(49,265)	(41,213)
		Net deferred tax liabilities	$	(24,003)	(17,317)

Summary of net operating loss carryforwards

The Company has tax benefits for net operating loss carry forwards (NOLs), a portion of which are subject to various limitations, which expire at various dates in the future. The Company's NOLs and expiration dates at June 30, 2012 are as follows:

		Amount	Expires
Federal	$	23,204	2024 through 2026
State		105,123	2013 through 2031
Foreign		9,074	2013 through 2021

Summary of deferred tax asset valuation allowance

The total valuation allowance at June 30, 2012, 2011, and 2010 is $10,340, $8,754, and $13,497, respectively, and consists of the following:

		2012	2011	2010
Federal NOLs	$	4,100	4,100	3,848
State NOLs		857	819	1,055
Foreign NOLs		2,787	1,229	5,781
Federal credits		236	235	463
State credits		2,360	2,371	2,350
Total	$	10,340	8,754	13,497

Schedule of unrecognized tax benefits, excluding interest and penalties rollforwrd

General accounting principles relating to uncertain income tax positions prescribe a minimum recognition threshold a tax position is required to meet before being recognized, and provides guidance on the derecognition, measurement, classification and disclosure relating to income taxes. The following is a tabular reconciliation of the total amount of unrecognized tax benefits for the year, excluding interest and penalties:

		2012	2011	2010
Balance at the beginning of the year	$	774	2,039	—
Gross increases for prior year tax positions		—	206	2,039
Gross decreases for prior year tax positions		(252)	(1,471)	—
Balance at the end of the year	$	522	774	2,039

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Subsequent Events

12 Months Ended

Jun. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

(23) Subsequent Events

On August 17, 2012, the Company's Board of Directors approved an annual dividend of $0.25 per common share, payable quarterly in September 2012, December 2012, March 2013 and June 2013. The Board of Directors authorized a quarterly dividend of $0.0625 per share payable on September 19, 2012 to shareholders of record at the close of business on September 5, 2012.

On August 17, 2012, the Board authorized the Company to offer to amend outstanding options representing the right to purchase shares issued to directors, officers and current employees pursuant to the Company's 2006 Employee, Director and Consultant Stock Plan, to permit these options alternatively to be settled for cash or exercised for the issuance of shares, at the election of the option holder. The Company anticipates that these amendments will result in "mark-to-market" accounting with respect to the subject options and the expense associated with these amendments is approximately $24,000.

The Company has evaluated subsequent events through the date these financial statements were issued.

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Unaudited Quarterly Results

12 Months Ended

Jun. 30, 2012

Unaudited Quarterly Results [Abstract]

Unaudited Quarterly Results

(24) Unaudited Quarterly Results

Unaudited quarterly results for the years ended June 30, 2012 and 2011 were as follows:

		First	Second	Third	Fourth
		Quarter	Quarter	Quarter	Quarter
		(Unaudited)
2012:
Net sales	$	174,862	165,547	173,437	191,698
Operating income		32,465	22,230	19,950	16,780
Net income attributable to Globe Specialty Metals, Inc.		20,693	13,444	11,613	8,820
Basic earnings per common share		0.28	0.18	0.15	0.12
Diluted earnings per common share		0.27	0.18	0.15	0.12
2011:
Net sales	$	137,352	155,775	172,802	175,934
Operating income		8,228	20,229	36,753	29,560
Net income attributable to Globe Specialty Metals, Inc.		2,162	11,708	23,393	15,545
Basic earnings per common share		0.03	0.16	0.31	0.21
Diluted earnings per common share		0.03	0.15	0.30	0.20
2010:
Net sales	$	105,458	108,278	112,486	146,436
Operating income		12,326	30,466	3,307	8,187
Net income attributable to Globe Specialty Metals, Inc.		8,442	18,534	516	6,609
Basic earnings per common share		0.12	0.25	0.01	0.09
Diluted earnings per common share		0.12	0.25	0.01	0.09

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Organization and Business Operations

12 Months Ended

Jun. 30, 2012

Organization and Business Operations [Abstract]

Organization and Business Operations

(1) Organization and Business Operations

Globe Specialty Metals, Inc. and subsidiary companies (GSM, the Company, we, or our) is among the world's largest producers of silicon metal and silicon-based alloys, important ingredients in a variety of industrial and consumer products. The Company's customers include major silicone chemical, aluminum and steel manufacturers, auto companies and their suppliers, ductile iron foundries, manufacturers of photovoltaic solar cells and computer chips, and concrete producers.

On November 13, 2006, the Company acquired Globe Metallurgical, Inc. (GMI), a manufacturer of silicon metal and silicon-based alloys. GMI owns and operates plants in Beverly, Ohio, Alloy, West Virginia, Niagara Falls, New York, and Selma, Alabama. GMI's products are sold primarily to the silicone chemical, aluminum, metal casting, and solar cell industries, primarily in the United States, Canada, and Mexico. GMI also owns 50% of Norchem, Inc. (Norchem). Norchem manufactures and sells additives that enhance the durability of concrete, refractory material, and oil well conditioners. GMI sells silica fume (also known as microsilica), a by-product of its ferrosilicon metal and silicon metal production process, to Norchem, as well as other companies.

On November 20, 2006, the Company acquired Stein Ferroaleaciones S.A. (SFA), an Argentine manufacturer of silicon-based alloys, and SFA's affiliate, UltraCore Polska Sp.z.o.o. (UCP). a Polish manufacturer of cored wire alloys. SFA has been renamed Globe Metales S.A. (Globe Metales). Globe Metales is headquartered in Buenos Aires, Argentina, and operates a silicon-based alloy manufacturing plant in Mendoza province, Argentina and cored wire packing plants in San Luis province, Argentina and Police, Poland. Globe Metales' products are important ingredients in the manufacturing of steel, ductile iron, machine and auto parts, and pipe.

On January 31, 2007, the Company acquired Camargo Correa Metais S.A. (CCM), one of Brazil's largest producers of silicon metal and silica fume. CCM was renamed Globe Metais Indústria e Comércio S.A. (Globe Metais). On November 5, 2009, the Company sold 100% of its interest in Globe Metais. The sale of the Company's equity interest in Globe Metais was executed in connection with the sale of a 49% membership interest in WVA Manufacturing, LLC (WVA LLC), a newly formed entity by the Company, to Dow Corning Corporation (Dow Corning).

On February 29, 2008, the Company completed the acquisition of approximately 81% of Solsil, Inc. (Solsil). Solsil is continuing to develop its technology to produce upgraded metallurgical grade silicon through a proprietary metallurgical process for use in photovoltaic (solar) cells. Solsil remains focused on research and development and is not presently producing material for commercial sale. On December 6, 2011, the Company purchased all the shares held by one of Solsil's minority partners.  Additionally, Solsil issued and sold new shares to the Company.  Subsequent to these stock purchase transactions the Company owns 97.25% of Solsil.

On May 15, 2008, the Company purchased an ownership interest of approximately 58% of Ningxia Yonvey Coal Industrial Co., Ltd (Yonvey). Yonvey is a producer of carbon electrodes, an important input in the silicon metal production process. Yonvey now principally supplies its electrodes to our subsidiaries. Yonvey's operations are located in Chonggang Industrial Park, Shizuishan in the Ningxia Hui Autonomous Region of China. On November 28, 2008, the Company increased its interest by an additional 12%.

On April 1, 2010, the Company acquired Core Metals Group Holdings LLC (Core Metals). Core Metals is a leading producer, marketer, and distributor of ferroalloys and specialty materials for the North American steel and foundry industry.The acquisition was made to strengthen our growing ferrosilicon business and expand the line of products and services we offer to steel markets around the world.

On July 28, 2011, the Company acquired Alden Resources, LLC (Alden) and Gatliff Services, LLC (Gatliff), collectively known as Alden. Alden is North America's leading miner, processor and supplier of specialty metallurgical coal to the silicon and silicon-based alloy industries.  The acquisition was made in order to secure a stable, long-term and low-cost supply of specialty metallurgical coal, a key ingredient in the production of silicon metal and silicon-based alloys.

On June 13, 2012, the Company acquired Becancour Silicon Metal Inc.'s ("BSI") 51% equity interest in Quebec Silicon Limited Partnership ("QSLP"), collectively known as Quebec Silicon. The Company will operate Quebec Silicon's silicon metal plant located in Becancour, Quebec with its joint venture partner Dow Corning.

See note 3 (Business Combinations, Investments, and Divestitures) for additional information regarding business combinations, investments, and divestitures.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

a.  Basis of Presentation and Principles of Consolidation

The Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). When the Company does not have a controlling interest in an entity, but exerts significant influence over the entity, the Company applies the equity method of accounting. For investments in which the Company does not have significant influence, the cost method of accounting is used.

The Company also evaluates the consolidation of entities under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 810, Consolidation (ASC 810). ASC 810 requires management to evaluate whether an entity or interest is a variable interest entity and whether the Company is the primary beneficiary. Consolidation is required if both of these criteria are met. The Company does not have any variable interest entities requiring consolidation.

All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

b.  Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and related notes. Significant estimates and assumptions in these consolidated financial statements include the valuation of inventories; the depreciable lives for property, plant, and equipment; estimates of fair value associated with accounting for business combinations; goodwill and long-lived asset impairment tests; income taxes and deferred tax valuation allowances; valuation of derivative instruments; the determination of the discount rate and the rate of return on plan assets for pension expense (benefit); and the determination of the fair value of share-based compensation, involving assumptions about forfeiture rates, stock volatility, discount rates, expected dividend yield, and expected time to exercise. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates.

Revenue Recognition

c.  Revenue Recognition

Revenue is recognized in accordance with ASC Topic 605, Revenue Recognition (ASC 605), when a firm sales agreement is in place, delivery has occurred and title and risks of ownership have passed to the customer, the sales price is fixed or determinable, and collectability is reasonably assured. Shipping and other transportation costs charged to buyers are recorded in both net sales and cost of goods sold. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from net sales. When the Company provides a combination of products and services to customers, the arrangement is evaluated under ASC Subtopic 605-25, Revenue Recognition — Multiple ElementArrangements (ASC 605.25). ASC 605.25 addresses certain aspects of accounting by a vendor for arrangements under which the vendor will perform multiple revenue-generating activities. If the Company cannot objectively determine the fair value of any undelivered elements under an arrangement, the Company defers revenue until all elements are delivered and services have been performed, or until fair value can objectively be determined for any remaining undelivered elements.

Foreign Currency Translation

d.  Foreign Currency Translation

The determination of the functional currency for the Company's foreign subsidiaries is made based on appropriate economic factors, including the currency in which the subsidiary sells its products, the market in which the subsidiary operates, and the currency in which the subsidiary's financing is denominated. Based on these factors, management has determined that the U.S. dollar is the functional currency for Globe Metales. The U.S. dollar was also the functional currency for Globe Metais prior to its divestiture. The functional currency for Yonvey is the Chinese renminbi. Yonvey's assets and liabilities are translated using current exchange rates in effect at the balance sheet date and for income and expense accounts using average exchange rates. The functional currency for Quebec Silicon is the Canadian dollar. Quebec Silicon's assets and liabilities are translated using current exchange rates in effect at the balance sheet date and for income and expense accounts using average exchange rates.  Resulting translation adjustments are reported as a separate component of stockholders' equity. Translation gains and losses are recognized on transactions in currencies other than the subsidiary's functional currency and included in the consolidated statement of income for the period in which the exchange rates changed.

Cash and Cash Equivalents

e.  Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments that are readily convertible into cash. Securities with contractual maturities of three months or less, when purchased, are cash equivalents. The carrying amount of these securities approximates fair value because of the short-term maturity of these instruments.

Refer to note 3 (Business Combinations, Investments, and Divestitures) and note 16 (Stockholders' Equity) for supplemental disclosures of noncash investing and financing activities.

Inventories

f.  Inventories

Inventories are valued at the lower of cost or market value, which does not exceed net realizable value. Cost of inventories is determined either by the first-in, first-out method or by the average cost method. When circumstances indicate a potential recoverability issue, tests are performed to assess the market value, and as necessary, an inventory write-down is recorded for obsolete, slow moving, or defective inventory. Management estimates market and net realizable value based on current and expected future selling prices for our inventories, as well as the expected utilization of parts and supplies in our manufacturing process.

Property, Plant, and Equipment

g.  Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost. Depreciation is calculated using the straight-line method based on the estimated useful lives of assets. The estimated useful lives of property, plant, and equipment are as follows:

	Range of
	Useful Lives
Asset type:
Land improvements and land use rights	20 to 36 years
Buildings	35 to 40 years
Manufacturing equipment	5 to 25 years
Furnaces	10 to 20 years
Other	2 to 5 years

Costs that do not extend the life of an asset, materially add to its value, or adapt the asset to a new or different use are considered repair and maintenance costs and expensed as incurred.

Cost for mineral properties and mine development costs, which are incurred to expand capacity of operating mines or to develop new mines, are capitalized and charged to operations based on the units-of production method over the estimated proven and probable reserve tons and based on the average useful life of the mine, respectively. Mine development costs include costs incurred for site preparation and development of the mines during the development stage.

Business Combinations

h.  Business Combinations

When the Company acquires a business, the purchase price is allocated based on the fair value of tangible assets and identifiable intangible assets acquired, and liabilities assumed. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Goodwill as of the acquisition date is measured as the residual of the excess of the consideration transferred, plus the fair value of any noncontrolling interest in the acquiree at the acquisition date, over the fair value of the identifiable net assets acquired. If the fair value of the net assets acquired exceeds the purchase price, the resulting bargain purchase is recognized as a gain in the statement of income. Prior to the adoption of ASC Subtopic 805-10, Business Combinations (ASC 805-10), the resulting negative goodwill was allocated as a pro rata reduction of the values of acquired nonmonetary assets. The Company generally engages independent, third-party appraisal firms to assist in determining the fair value of assets acquired and liabilities assumed. Such a valuation requires management to make significant estimates, especially with respect to intangible assets. These estimates are based on historical experience and information obtained from the management of the acquired companies. These estimates are inherently uncertain. For all acquisitions, operating results are included in the consolidated statement of income from the date of acquisition.

Goodwill and Other Intangible Assets

i.  Goodwill and Other Intangible Assets

Goodwill as of the acquisition date is measured as the residual of the excess of the consideration transferred, plus the fair value of any noncontrolling interest in the acquiree at the acquisition date, over the fair value of the identifiable net assets acquired. In accordance with ASC Topic 350, Intangibles — Goodwill and Other (ASC 350), goodwill is tested for impairment annually at the end of the third quarter, and will be tested for impairment between annual tests if an event occurs or circumstances change that more likely than not would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level. Reporting units are at the reportable segment level, or one level below the reportable segment level for our GMI and Other reportable segments, and are aligned with our management reporting structure. Goodwill relates and is assigned directly to a specific reporting unit.

Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds the implied fair value of goodwill of the reporting unit. Refer to note 3 (Business Combinations, Investments, and Divestitures), and note 7 (Goodwill and Other Intangibles) for additional information.

Trade names have indefinite lives and are not amortized but rather tested annually for impairment and written down to fair value as required.

Impairment of Long-Lived Assets

j.  Impairment of Long-Lived Assets

In accordance with ASC Topic 360, Property, Plant, and Equipment (ASC 360), the Company reviews the recoverability of its long-lived assets, such as plant and equipment and definite-lived intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on the Company's ability to recover the carrying value of the asset or asset group from the expected future undiscounted pretax cash flows of the related operations. The Company assesses the recoverability of the carrying value of long-lived assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is measured based on the difference between estimated fair value and carrying value. Assets to be disposed are written down to the lower of carrying amount or fair value less costs to sell, and depreciation ceases. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary.

Share-Based Compensation

k.  Share-Based Compensation

The Company recognizes share-based compensation expense based on the estimated grant date fair value of share-based awards using a Black-Scholes option pricing model. Prior to vesting, cumulative compensation cost equals the proportionate amount of the award earned to date. The Company has elected to treat each award as a single award and recognize compensation cost on a straight-line basis over the requisite service period of the entire award. If the terms of an award are modified in a manner that affects both the fair value and vesting of the award, the total amount of remaining unrecognized compensation cost (based on the grant-date fair value) and the incremental fair value of the modified award are recognized over the amended vesting period.

Refer to note 18 (Share-Based Compensation) for further information on the Company's accounting for share-based compensation.

Restructuring Charges [Policy Text Block]

l.  Restructuring Charges

Restructuring activities are programs planned and controlled by management that materially change either the scope of the business undertaken by the Company or the manner in which business is conducted. Restructuring activities include, but are not limited to, one-time termination benefits provided to current employees that are involuntarily terminated, costs to terminate a contract that is not a capital lease, and costs to consolidate facilities and relocate employees. Restructuring charges are recognized in accordance with ASC Topic 420, Exit or Disposal Cost Obligations (ASC 420), which requires a liability for a cost associated with an exit or disposal activity to be recognized at its fair value in the period in which the liability is incurred, except for a liability for one-time termination benefits that is incurred over time. In periods subsequent to initial measurement, changes to a restructuring liability are measured using the credit-adjusted risk-free rate that was used to measure the liability initially.

Income Taxes

m.  Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of income in the period that includes the enactment date. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

The Company has adopted the amendment to ASC Subtopic 740-10, Income Taxes (ASC 740-10), which provides a comprehensive model for the recognition, measurement, and disclosure in financial statements of uncertain income tax positions that a company has taken or expects to take on a tax return. Under ASC 740-10, a company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Additionally, companies are required to accrue interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. The Company has elected to recognize interest expense and penalties related to uncertain tax positions as a component of its provision for income taxes.

Financial Instruments

n.  Financial Instruments

The Company accounts for derivatives and hedging activities in accordance with ASC Topic 815, Derivatives and Hedging (ASC 815). ASC 815 requires that all derivative instruments be recorded on the balance sheet at their respective fair values. The Company's derivative instruments consist of an interest rate cap and interest rate swaps employed to manage interest rate exposures on long-term debt discussed in note 9 (Debt) and a power hedge and foreign exchange forward contracts to manage commodity price and foreign currency exchange exposures discussed in note 12 (Derivative Instruments).

Accounting Pronouncements To Be Implemented

o.  Accounting Pronouncements to be Implemented

In June 2011, the FASB issued Accounting Standards Update No. 2011-05, Comprehensive Income(Topic 220): Presentation of Comprehensive Income (ASU 2011-05). The objective of this amendment is to increase the prominence of other comprehensive income in the financial statements. The amendments require entities to report components of net income and the components of other comprehensive income either in a continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, the amendments in ASU 2011-05 require an entity to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statements where the components of net income and the components of other comprehensive income are presented.  In December 2011, the FASB issued Accounting Standards Update No. 2011-12, which deferred the specific requirements related to the presentation of reclassification adjustments. This amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.We expect the adoption of this ASU will affect financial statement presentation only.

 

In September 2011, FASB issued Accounting Standards Update No. 2011-08, Testing Goodwill for Impairment (ASU 2011-08), which amends the guidance in ASC 350-20. The amendments in ASU 2011-08 provide entities with the option of performing a qualitative assessment before performing the first step of the two-step impairment test. If entities determine, on the basis of qualitative factors, it is not more likely than not that the fair value of the reporting unit is less than the carrying amount, then performing the two-step impairment test would be unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any. ASU 2011-08 also provides entities with the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to the first step of the two-step impairment test. ASU 2011-08 is effective for interim and annual periods beginning after December 15, 2011 but early adoption is permitted. The Company does not expect material financial statement implications relating to the adoption of this ASU.

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Accrued Expenses and Other Current Liabilities (Tables)

12 Months Ended

Jun. 30, 2012

Accrued Expenses and Other Current Liabilities [Abstract]

Schedule of Accrued Liabilities [Table Text Block]

Accrued expenses and other current liabilities comprise the following at June 30:

			2012	2011
Accrued wages, bonuses, and benefits		$	12,135	11,877
Acquired contract obligations			7,173	—
Deferred revenue			4,909	—
Accrued income taxes			3,846	4,257
Current portion of capital lease obligations			2,544	—
Current portion of retained acquisition contingencies			1,479	10,931
Accrued insurance			1,297	758
Accrued property taxes			1,149	1,161
Accrued professional fees			524	1,093
Deferred taxes			49	36
Other			5,497	4,362
	Total	$	40,602	34,475

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Business Combinations, Investments, and Divestitures (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended				0 Months Ended	12 Months Ended		12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010	Mar. 31, 2011	Nov. 05, 2009 Globe Metais [Member]	Jun. 30, 2010 WVA LLC [Member] Mg	Nov. 05, 2009 WVA LLC [Member]	Jun. 30, 2010 Masterloy [Member]	Dec. 31, 2010 Fluorita de Mexico, S.A. de C.V. (FDM) [Member]	Mar. 31, 2011 Core Metals [Member]	Jun. 30, 2011 Alden Resources, LLC [Member]	Jun. 30, 2012 Quebec Silicon Limited Partnership [Member]	Jun. 30, 2012 Globe Specialty Metals [Member] Quebec Silicon Limited Partnership [Member]	Jun. 30, 2012 Dow Corning [Member] Quebec Silicon Limited Partnership [Member]
Business Acquisition [Abstract]
Percentage of interest acquired (in hundredths)											100.00%	51.00%
Purchase price											$ 73,200
Purchase price, cash paid										52,000	18,200	8,803
Purchase price, earn-out payment											6,800
Purchase price, financed with revolving credit facility										15,329		31,800
Revolving credit facility face value	300,000											300,000
Purchase price, financed with bank debt											55,000
Goodwill recorded										1,274		3,062
Right to purchase the plant's output (in hundredths)													51.00%	49.00%
Business Divestiture [Abstract]
Business Divestiture, Percentage of Business Sold					100.00%		49.00%		49.00%
Cash received in disposition					65,600			3,000
Business Divestiture, Sale Price					75,000		100,000		2,500
Business Divestiture, Cash Balances Assumed by Acquirer					16,555
Business Divestiture, Liabilities Assumed by Aquirer					14,000
Amount of Silicon Metal Required to be Sold						20,000
Business Divestiture, Transaction Costs							2,146
Provision for income taxes	28,760	35,988	20,539			26,575
Increase in noncontrolling interest recorded as increase in additional paid-in capital	210		71,409			44,397
Nigerian Mining Licenses [Abstract]
Advance payments to acquire exploration mining licenses in Nigeria				$ 17,000

XML

Operating Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended												12 Months Ended
	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2009	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2010
Operating Segments [Abstract]
Number of reportable segments													6
Revenue from External Customer by Product Line [Abstract]
Net sales													$ 705,544		$ 641,863		$ 472,658
Segment Reporting Information [Line Items]
Net Sales													705,544		641,863		472,658
Depreciation and Amortization													34,000		25,055		20,672
Operating Income (Loss)	16,780	19,950	22,230	32,465	29,560	36,753	20,229	8,228	8,187	3,307	30,466	12,326	91,425		94,770		54,286
Interest Income													243		214		318
Interest Expense													(7,610)	[1]	(3,198)	[1]	(4,372)	[1]
Income (Loss) Before Income Taxes													86,636		92,714		54,807
Total Assets	936,747				678,269				607,145				936,747		678,269		607,145
Capital Expenditures													(50,439)		35,039		22,901
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													705,544		641,863		472,658
Long-lived assets	489,978				283,957				271,769				489,978		283,957		271,769
Revenue, Major Customer [Line Items]
Percentage of consolidated net sales (in hundredths)													100.00%		100.00%		100.00%
Dow Corning [Member]
Revenue, Major Customer [Line Items]
Percentage of consolidated net sales (in hundredths)													13.00%		17.00%		30.00%
Noncontrolling interest's ownership interest in consolidated affiliate (in hundredths)	49.00%												49.00%
Term of contractual agreement (in years)	4Y												4Y
Silicon metal to be purchased per calendar year by major customer under original contractual agreement (in metric tons)													30,000
Additional silicon metal to be purchased in calendar year 2009 under amendment to contractual agreement (in metric tons)													17,000
Silicon metal to be purchased in calendar year 2010 under amendment to contractual agreement (in metric tons)													20,000
Settlement cost related to remaining sales obligations													4,276
All other customers [Member]
Revenue, Major Customer [Line Items]
Percentage of consolidated net sales (in hundredths)													87.00%		83.00%		70.00%
United States [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													625,681		574,181		407,455
Segment Reporting Information [Line Items]
Net Sales													625,681		574,181		407,455
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													625,681		574,181		407,455
Long-lived assets	330,724				224,556				211,876				330,724		224,556		211,876
Argentina [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													57,154		54,695		42,101
Segment Reporting Information [Line Items]
Net Sales													57,154		54,695		42,101
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													57,154		54,695		42,101
Long-lived assets	31,185				31,054				31,665				31,185		31,054		31,665
Canada [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													5,520		0		0
Segment Reporting Information [Line Items]
Net Sales													5,520		0		0
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													5,520		0		0
Long-lived assets	100,842				0				0				100,842		0		0
Brazil [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													0		0		12,820
Segment Reporting Information [Line Items]
Net Sales													0		0		12,820
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													0		0		12,820
China [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													3,131		899		592
Segment Reporting Information [Line Items]
Net Sales													3,131		899		592
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													3,131		899		592
Long-lived assets	26,288				27,524				27,428				26,288		27,524		27,428
Poland [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													14,058		12,088		9,690
Segment Reporting Information [Line Items]
Net Sales													14,058		12,088		9,690
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													14,058		12,088		9,690
Long-lived assets	939				823				800				939		823		800
GMI [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													631,495		549,418		358,279
Segment Reporting Information [Line Items]
Net Sales													631,495		549,418		358,279
Depreciation and Amortization													29,261		20,430		15,812
Operating Income (Loss)													103,542		103,685		41,126
Interest Income													1		5		42
Interest Expense													(5,807)	[1]	1,775	[1]	2,368	[1]
Income (Loss) Before Income Taxes													98,297		102,240		39,107
Total Assets	679,516				384,495				324,680				679,516		384,495		324,680
Capital Expenditures													(36,126)		31,061		18,971
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													631,495		549,418		358,279
Globe Metais [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													0		15,421		62,126
Segment Reporting Information [Line Items]
Net Sales													0		15,421		62,126
Depreciation and Amortization													0		0		776
Operating Income (Loss)													(2)		397		5,263
Interest Income													0		0		178
Interest Expense													0	[1]	0	[1]	525	[1]
Income (Loss) Before Income Taxes													(2)		398		8,579
Total Assets	0				294				8,192				0		294		8,192
Capital Expenditures													0		0		208
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													0		15,421		62,126
Globe Metales [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													64,063		62,321		48,959
Segment Reporting Information [Line Items]
Net Sales													64,063		62,321		48,959
Depreciation and Amortization													1,766		1,634		1,820
Operating Income (Loss)													11,332		13,197		10,073
Interest Income													49		0		0
Interest Expense													(1,145)	[1]	1,050	[1]	1,090	[1]
Income (Loss) Before Income Taxes													10,422		12,669		10,069
Total Assets	86,302				82,751				71,790				86,302		82,751		71,790
Capital Expenditures													(1,926)		1,023		996
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													64,063		62,321		48,959
Solsil [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													0		9,420		20
Segment Reporting Information [Line Items]
Net Sales													0		9,420		20
Depreciation and Amortization													488		488		508
Operating Income (Loss)													(984)		8,670		(1,375)
Interest Income													0		0		0
Interest Expense													0	[1]	0	[1]	30	[1]
Income (Loss) Before Income Taxes													(984)		8,670		(1,405)
Total Assets	30,057				29,191				30,526				30,057		29,191		30,526
Capital Expenditures													(691)		165		(1,410)
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													0		9,420		20
Corporate [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													0		0		0
Segment Reporting Information [Line Items]
Net Sales													0		0		0
Depreciation and Amortization													424		426		122
Operating Income (Loss)													(27,268)		(29,606)		2,815
Interest Income													777		816		619
Interest Expense													(739)	[1]	470	[1]	317	[1]
Income (Loss) Before Income Taxes													(25,570)		(30,086)		2,836
Total Assets	469,137				403,177				415,184				469,137		403,177		415,184
Capital Expenditures													(2,675)		1,226		1,273
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													0		0		0
Other [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													28,216		32,325		12,557
Segment Reporting Information [Line Items]
Net Sales													28,216		32,325		12,557
Depreciation and Amortization													2,061		2,077		1,634
Operating Income (Loss)													490		31		(4,273)
Interest Income													0		1		6
Interest Expense													(503)	[1]	511	[1]	569	[1]
Income (Loss) Before Income Taxes													158		428		(5,036)
Total Assets	41,538				43,317				41,508				41,538		43,317		41,508
Capital Expenditures													(418)		1,564		2,863
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													28,216		32,325		12,557
Eliminations [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													(18,230)		(27,042)		(9,283)
Segment Reporting Information [Line Items]
Net Sales													(18,230)		(27,042)		(9,283)
Depreciation and Amortization													0		0		0
Operating Income (Loss)													4,315		(1,604)		657
Interest Income													(584)		(608)		(527)
Interest Expense													584	[1]	(608)	[1]	(527)	[1]
Income (Loss) Before Income Taxes													4,315		(1,605)		657
Total Assets	(369,803)				(264,956)				(284,735)				(369,803)		(264,956)		(284,735)
Capital Expenditures													0		0		0
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													(18,230)		(27,042)		(9,283)
Silicon metal [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													360,726		347,599		296,763
Segment Reporting Information [Line Items]
Net Sales													360,726		347,599		296,763
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													360,726		347,599		296,763
Silicon-based alloys [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													269,919		236,607		148,092
Segment Reporting Information [Line Items]
Net Sales													269,919		236,607		148,092
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													269,919		236,607		148,092
Other products [Member]
Revenue from External Customer by Product Line [Abstract]
Net sales													74,899		57,657		27,803
Segment Reporting Information [Line Items]
Net Sales													74,899		57,657		27,803
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales													$ 74,899		$ 57,657		$ 27,803

[1] Net of capitalized interest.

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Jun. 30, 2011
Current assets:
Cash and cash equivalents	$ 178,010	$ 166,208
Accounts receivable, net of allowance for doubtful accounts of $955 and $715 at June 30, 2012 and 2011, respectively	85,258	60,871
Inventories	119,441	109,292
Prepaid expenses and other current assets	27,915	27,876
Total current assets	410,624	364,247
Property, plant, and equipment, net of accumulated depreciation, depletion and amortization	432,761	229,977
Goodwill	56,740	53,503
Other intangible assets	477	477
Investments in unconsolidated affiliates	9,217	8,640
Deferred tax assets	200	217
Other assets	26,728	21,208
Total assets	936,747	678,269
Current liabilities:
Accounts payable	52,005	39,947
Short-term debt	317	1,094
Revolving credit agreements	9,000	12,000
Accrued expenses and other current liabilities	40,602	34,475
Total current liabilities	101,924	87,516
Long-term liabilities:
Revolving credit agreements	131,386	34,989
Deferred tax liabilities	28,835	23,264
Other long-term liabilities	70,803	17,224
Total liabilities	332,948	162,993
Stockholders' equity:
Common stock, $0.0001 par value. Authorized, 150,000,000 shares; issued, 75,331,310 and 75,289,614 shares at June 30, 2012 and 2011, respectively	8	8
Additional paid-in capital	405,675	399,900
Retained earnings	119,863	80,300
Accumulated other comprehensive income (loss):
Foreign currency translation adjustment	1,256	937
Pension liability adjustment, net of tax	(8,058)	(3,933)
Unrealized gain on available for sale securities, net of tax	(38)	1
Total accumulated other comprehensive loss	(6,840)	(2,995)
Treasury stock at cost, 282,437 shares at June 30, 2012 and 2011	(4)	(4)
Total Globe Specialty Metals, Inc. stockholders' equity	518,702	477,209
Noncontrolling interest	85,097	38,067
Total stockholders' equity	603,799	515,276
Total liabilities and stockholders' equity	$ 936,747	$ 678,269

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Commitments and Contingencies (Tables)

12 Months Ended

Jun. 30, 2012

Commitments and Contingencies [Abstract]

Schedule of electrical power commitments

Electric power is a major cost of the Company's production process as large amounts of electricity are required to operate arc furnaces. A summary of electric power commitments follows:

Facility	Supplier	Terms	Price Structure	Capacity
Alloy, West Virginia	Appalachian Power	Through October 30, 2012, 1-year termination notice	Published tariff rate	110 MW interruptible
Alloy, West Virginia	Brookfield Power	Through December 31, 2021	Fixed rate	100 MW (hydro power)
Beverly, Ohio	American Electric Power	Evergreen, 1-year termination notice	Published tariff rate	2.5 MW firm 85 MW interruptible
Niagara Falls, New York	New York Power Authority	Through September 30, 2021	Based on the EP and RP commodity agreement	32.6 MW replacement 7.3 MW expansion
Selma, Alabama	Alabama Power	Evergreen, 1-year termination notice	Published tariff rate	2.15 MW firm 40.85 MW interruptible
Bridgeport, Alabama	Tennessee Valley Authority	Through April 30, 2020, 2-year termination notice	Fixed rate, reset annually	10MW firm 30MW interruptible
Becancour, Quebec	Hydro Quebec	Through November 3, 2012	Published tariff rate	2.0 MW firm 80 MW interruptible

Schedule of Future Minimum Rental Payments for Operating Leases

Minimum rental commitments under noncancelable operating and capital leases outstanding at June 30, 2012 for the fiscal years of 2013 onward are as follows:

		2013	2014	2015	2016	2017	Thereafter
Operating lease obligations	$	3,266	2,053	846	181	—	—
Capital lease obligations		2,544	2,562	2,445	2,505	2,213	2,029

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities:
Net income	$ 57,876	$ 56,726	$ 34,268
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	34,000	25,055	20,672
Depletion	848	0	0
Share-based compensation	2,482	4,332	5,712
(Gain) loss on sale of business	(54)	4,249	(19,715)
Amortization of deferred financing fees	2,180	195	271
Deferred taxes	9,312	13,538	(8,123)
Accretion	230	0	0
Changes in operating assets and liabilities:
Accounts receivable, net	2,608	(4,664)	(29,029)
Inventories	10,729	(25,355)	(16,326)
Prepaid expenses and other current assets	(4,505)	(1,649)	6,984
Accounts payable	(5,047)	(7,833)	28,290
Accrued expenses and other current liabilities	2,038	(6,179)	(13,438)
Other	(8,790)	2,773	(28,821)
Net cash provided by operating activities	103,907	61,188	(19,255)
Cash flows from investing activities:
Capital expenditures	(41,836)	(35,039)	(22,901)
Acquisition of businesses, net of cash acquired of $4,090, $0, and $1,873 during the years ended June 30, 2012, 2011, and 2010, respectively	(109,717)	0	(53,084)
Sale of businesses, net of cash disposed of $0, $0, and $17,132 during the years ended June 30, 2012, 2011, and 2010, respectively	0	2,500	60,559
Working capital adjustments from acquisition of businesses, net	0	(2,038)	0
Other investing activities	(152)	(16,935)	(733)
Net cash used in investing activities	(151,705)	(51,512)	(16,159)
Cash flows from financing activities:
Borrowings of long-term debt	50,000	0	0
Payments of long-term debt	(50,000)	(17,012)	(21,917)
Borrowings of short-term debt	1,048	4,999	11,896
Payments of short-term debt	(1,825)	(11,972)	(10,518)
Borrowings under revolving credit agreements	136,408	35,989	22,000
Payments under revolving credit agreements	(54,462)	(5,000)	(6,000)
Debt issuance costs	(5,199)	(869)	0
Dividend payment	(15,007)	(11,269)	0
Proceeds from stock option exercises	195	5,215	616
Proceeds from warrants exercised	0	0	1,287
Proceeds from UPOs exercised	0	0	210
Sale of noncontrolling interest	0	0	97,917
Sale of common stock	0	0	36,456
Other financing activities	(1,296)	0	(1,387)
Net cash provided by financing activities	59,862	81	130,560
Effect of exchange rate changes on cash and cash equivalents	(262)	(578)	7
Net increase in cash and cash equivalents	11,802	9,179	95,153
Cash and cash equivalents at beginning of year	166,208	157,029	61,876
Cash and cash equivalents at end of year	178,010	166,208	157,029
Supplemental disclosures of cash flow information:
Cash paid for interest, net of capitalized interest	4,475	2,533	2,494
Cash paid for income taxes, net of refunds totaling $3,194, $586, and $2,729 during the years ended June 30, 2012, 2011, and 2010, respectively	$ 22,023	$ 19,819	$ 51,709

XML

Debt (Details) In Thousands, unless otherwise specified	12 Months Ended		12 Months Ended			12 Months Ended					12 Months Ended		12 Months Ended
	Jun. 30, 2012 USD ($)	Jun. 30, 2011 USD ($)	Jun. 30, 2011 Term Loan [Member]	Jul. 31, 2011 Term Loan [Member] USD ($)	Jun. 30, 2012 Revolving Credit Facility [Member] USD ($)	Jun. 30, 2012 Senior Credit Facility [Member] USD ($)	Jun. 30, 2011 Senior Credit Facility [Member] USD ($)	Jun. 30, 2011 Other Credit Facility [Member] USD ($)	Jun. 30, 2012 Other Credit Facility [Member] USD ($)	Mar. 31, 2012 Other Credit Facility [Member] USD ($)	Jun. 30, 2011 Quebec Silicon Acquisition Revolving Credit Facility [Member] CAD	Jun. 30, 2012 Quebec Silicon Acquisition Revolving Credit Facility [Member] USD ($)	Jun. 30, 2012 Export Financing [Member] USD ($)	Jun. 30, 2011 Export Financing [Member] USD ($)	Jun. 30, 2012 Other Short-term Debt [Member] USD ($)	Jun. 30, 2011 Other Short-term Debt [Member] USD ($)
Short-term Debt [Line Items]
Outstanding balance	$ 317	$ 1,094											$ 0	$ 731	$ 317	$ 363
Weighted Average Interest Rate (in hundredths)													0.00%	2.75%	5.00%	8.00%
Unused credit line	9,269	8,310											9,269	8,310	0	0
Period for short-term export financing agreements, minimum (in months)													7 months
Period for short-term export financing agreements, maximum (in months)													11 months
Line of Credit Facility [Line Items]
Outstanding balance	9,000	12,000			9,000	128,163			3,223			3,223
Term of credit facility	5 years
Weighted average interest rate (in hundredths)					2.39%	2.00%			5.00%
Unused commitment					11,000	171,837			11,417
Total commitment					20,000	300,000	90,000		14,640	20,000	15,000
Expiration date						May 31, 2017	Mar. 30, 2014
Sublimit for swingline loans						10,000
Sublimit letter of credit						25,000	10,000
Debt refinance and closing costs						96,550
Purchase price, financed with revolving credit facility						31,800
Credit facility, additional borrowing availability						171,800
Aggregate amount by which maximum borrowing capacity may be increased						125,000	10,000
Interest rate on borrowings under the credit agreement						Interest on borrowings under the credit agreement is payable, at the Company's election, at either (a) a base rate (the higher of (i) the U.S. federal funds rate plus 0.50% per annum, (ii) the Administrative Agent's prime rate or (iii) an adjusted London Interbank Offered Rate for loans with a one month interest period plus 1.00% per annum plus a margin ranging from 0.75% to 1.50% per annum (such margin determined by reference to the leverage ratio set forth in the credit agreement), or (b) the adjusted London Interbank Offered Rate plus a margin ranging from 1.75% to 2.50% per annum (such margin determined by reference to the leverage ratio set forth in the credit agreement).	Interest on borrowings under the credit agreement is payable, at the Company's election, at either a base rate (the higher of the U.S. federal funds rate plus 0.50% per annum and the issuing bank's "prime rate") plus a margin of 1.50% per annum, or LIBOR plus a margin of 2.25% per annum. Certain commitment fees are also payable under the credit agreement.
Proceeds from borrowings used to repay short-term notes payable								5,880
Period following written demand by lender after which borrowings become due and payable (in business days)								10 days
Interest rate on borrowings, variable rate basis											Canadian prime
Interest rate on borrowings, basis spread on variable rate (in hundredths)											2.00%
Interest rate at period end (in hundredths)											5.00%
Long-term debt [Line Items]
Term of loan			3 years
Aggregate principal amount				$ 50,000

XML

Prepaid Expenses and Other Current Assets (Tables)

12 Months Ended

Jun. 30, 2012

Prepaid Expenses and Other Current Assets [Abstract]

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets comprise the following at June 30:

	2012		2011
Deferred taxes	$	4,681		5,766
Income tax receivables		6,450		3,777
Value added and other non-income tax receivables		4,370		3,391
Restricted cash		—		4,404
Other		12,414		10,538
Total	$	27,915		27,876

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010
Income (Loss) before provision for income taxes and (income) loss attributable to noncontrolling interest [Abstract]
U.S. operations		$ 73,859	$ 87,096	$ 21,865
Non-U.S. operations		12,777	5,618	32,942
Income before provision for income taxes		86,636	92,714	54,807
Current [Abstract]
Federal		13,506	16,113	10,471
State		1,996	1,982	2,686
Foreign		3,946	4,355	14,446
Total current		19,448	22,450	27,603
Deferred [Abstract]
Federal		8,257	12,622	(3,745)
State		1,244	1,107	(3,315)
Foreign		(189)	(191)	(4)
Total deferred		9,312	13,538	(8,123)
Total provision for income taxes		28,760	35,988	20,539
Effective income tax rate reconciliation [Abstract]
Federal statutory rate (in hundredths)		35.00%	35.00%	35.00%
State taxes, net of federal benefit (in hundredths)		2.40%	2.60%	(3.60%)
Foreign tax holiday and rate differential (in hundredths)		(1.80%)	0.70%	2.30%
Change in valuation allowance (in hundredths)		1.10%	(0.20%)	5.50%
Domestic production activities deduction (in hundredths)		(1.90%)	(1.70%)	(1.20%)
Other items (in hundredths)		(1.60%)	2.40%	(0.50%)
Effective tax rate (in hundredths)		33.20%	38.80%	37.50%
Tax credits	1,855
Deferred tax assets [Abstract]
Inventories	3,676	3,676	2,414
Accounts receivable	198	198	139
Accruals	9,322	9,322	6,673
Deferred Revenue	178	178	298
Net operating losses and other carryforwards	16,223	16,223	17,999
Other assets	901	901	259
Share-based compensation	5,104	5,104	4,868
Gross deferred tax assets	35,602	35,602	32,650
Valuation allowance	(10,340)	(10,340)	(8,754)
Net deferred tax assets	25,262	25,262	23,896
Deferred tax liabilities [Abstract]
Fixed assets	(46,257)	(46,257)	(39,340)
Prepaid expenses	(1,861)	(1,861)	(899)
Intangibles	(1,147)	(1,147)	(974)
Total deferred tax liabilities	(49,265)	(49,265)	(41,213)
Net deferred tax liabilities	(24,003)	(24,003)	(17,317)
Valuation Allowance [Line Items]
Valuation allowance amount	10,340	10,340	8,754	13,497
Valuation allowance, change in amount		1,586	(4,743)
Reconciliation of unrecognized tax benefits, excluding interest and penalties [Roll Forward]
Balance at the beginning of the year		774	2,039	0
Gross increases for prior year tax positions		0	206	2,039
Gross decreases for prior year tax positions		(252)	(1,471)	0
Balance at the end of the year	522	522	774	2,039
Interest and penalties included in uncertain tax positions liability		76	145	336
Change in unrecognized tax benefits is reasonably possible, amount	146	146
Interest and penalties recognized in income tax benefit/provison		42	(149)	268
Uncertain tax positions that would impact effective tax rate	522	522	774	629
Federal NOLs [Member]
Valuation Allowance [Line Items]
Valuation allowance amount	4,100	4,100	4,100	3,848
State NOLs [Member]
Valuation Allowance [Line Items]
Valuation allowance amount	857	857	819	1,055
Foreign NOLs [Member]
Valuation Allowance [Line Items]
Valuation allowance amount	2,787	2,787	1,229	5,781
Federal Credits [Member]
Valuation Allowance [Line Items]
Valuation allowance amount	236	236	235	463
State Credits [Member]
Valuation Allowance [Line Items]
Valuation allowance amount	2,360	2,360	2,371	2,350
Federal [Member]
Net operating loss carryforwards and expiration dates [Line Items]
Net operating loss carryforwards	23,204	23,204
Net operating loss carryforwards, expiration dates		2024 through 2026
State [Member]
Net operating loss carryforwards and expiration dates [Line Items]
Net operating loss carryforwards	105,123	105,123
Net operating loss carryforwards, expiration dates		2012 through 2031
Foreign [Member]
Net operating loss carryforwards and expiration dates [Line Items]
Net operating loss carryforwards	$ 9,074	$ 9,074
Net operating loss carryforwards, expiration dates		2012 through 2021

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Commitments and Contingencies

12 Months Ended

Jun. 30, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

(15) Commitments and Contingencies

a.  Legal Contingencies

The Company is subject to various lawsuits, claims, and proceedings that arise in the normal course of business, including employment, commercial, environmental, safety, and health matters, as well as claims associated with our historical acquisitions and divestitures. Although it is not presently possible to determine the outcome of these matters, in the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company's consolidated financial position, results of operations, or liquidity.

During the year ended June 30, 2011, the Company made escrow deposits and received payments totaling $2,038 and accrued $4,249 for working capital claims associated with our historical acquisitions.

b.  Environmental Contingencies

It is the Company's policy to accrue for costs associated with environmental assessments, remedial efforts, or other environmental liabilities when it becomes probable that a liability has been incurred and the costs can be reasonably estimated. When a liability for environmental remediation is recorded, such amounts will be recorded without giving effect to any possible future recoveries. At June 30, 2012, there are no significant liabilities recorded for environmental contingencies. With respect to the cost for ongoing environmental compliance, including maintenance and monitoring, such costs are expensed as incurred unless there is a long-term monitoring agreement with a governmental agency, in which case a liability is established at the inception of the agreement.

c.  Asset Retirement Obligations

As of June 30, 2012 and 2011, the Company has recorded asset retirement obligation accruals for mine reclamation and closure costs totaling $5,731 and $888, respectively. There were no assets that were legally restricted for purposes of settling asset retirement obligations at June 30, 2012 or 2011.

d.  Employee Contracts

As of June 30, 2012, the Company had 1,493 employees. The Company's total employees consist of 458 salaried employees and 1,035 hourly employees, and include 665 unionized employees. 44.5% of the workforce is covered by collective bargaining agreements and 17.3% of the workforce is covered by collective bargaining agreements expiring within one year of June 30, 2012.

e.  Power Commitments

Electric power is a major cost of the Company's production process as large amounts of electricity are required to operate arc furnaces. A summary of electric power commitments follows:

Facility	Supplier	Terms	Price Structure	Capacity
Alloy, West Virginia	Appalachian Power	Through October 30, 2012, 1-year termination notice	Published tariff rate	110 MW interruptible
Alloy, West Virginia	Brookfield Power	Through December 31, 2021	Fixed rate	100 MW (hydro power)
Beverly, Ohio	American Electric Power	Evergreen, 1-year termination notice	Published tariff rate	2.5 MW firm 85 MW interruptible
Niagara Falls, New York	New York Power Authority	Through September 30, 2021	Based on the EP and RP commodity agreement	32.6 MW replacement 7.3 MW expansion
Selma, Alabama	Alabama Power	Evergreen, 1-year termination notice	Published tariff rate	2.15 MW firm 40.85 MW interruptible
Bridgeport, Alabama	Tennessee Valley Authority	Through April 30, 2020, 2-year termination notice	Fixed rate, reset annually	10MW firm 30MW interruptible
Becancour, Quebec	Hydro Quebec	Through November 3, 2012	Published tariff rate	2.0 MW firm 80 MW interruptible

On February 24, 2011, the Company entered into a hydropower contract extension agreement with the New York Power Authority. Under the terms of this commodity purchase agreement, the Company will be supplied up to a maximum of 40,000 kW of hydropower from the Niagara Power Project to operate its Niagara Falls, New York facility. The hydropower will be supplied at preferential power rates plus market-based delivery charges through September 30, 2021. Under the terms of the contract, the Company has committed to specified employment, power utilization, and capital investment levels, which, if not met, could reduce the Company's power allocation from the Niagara Power Project.

e.  Joint Development Supply Agreement

On April 24, 2008, the Company's subsidiaries, Solsil and GMI, entered into a technology license, joint development and supply agreement with BP Solar International Inc. (BP Solar) for the sale of solar grade silicon. As part of this agreement, BP Solar paid Solsil $10,000 as an advance for research and development services and facilities construction. In accordance with ASC 605.25, revenue associated with this agreement was deferred until specific contract milestone had been achieved, or research development services were successful in reducing manufacturing costs. Revenue would then would be recognized ratably as product was delivered to BP Solar, or, if research and development services were performed, but unsuccessful, deferred until contract expiration. In November 2010, the technology license, joint development and supply agreement was terminated, $9,400 in previously deferred revenue was recognized by the Company, and the Company made a $600 payment to BP Solar.

f.  Lease Commitments

The Company leases certain machinery and equipment, automobiles, railcars and office space. For the years ended June 30, 2012, 2011, and 2010, lease expense was $3,527, $3,173, and $2,191, respectively.

Minimum rental commitments under noncancelable operating and capital leases outstanding at June 30, 2012 for the fiscal years of 2013 onward are as follows:

		2013	2014	2015	2016	2017	Thereafter
Operating lease obligations	$	3,266	2,053	846	181	—	—
Capital lease obligations		2,544	2,562	2,445	2,505	2,213	2,029

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Property, Plant, and Equipment (Tables)

12 Months Ended

Jun. 30, 2012

Property, Plant, and Equipment [Abstract]

Schedule of Property, Plant, and Equipment, Net of Accumulated Depreciation and Amortization

Property, plant, and equipment, net is comprised of the following at June 30:

	2012			2011
Land, land improvements, and land use rights	$	10,831			6,907
Building and improvements		76,395			43,076
Machinery and equipment		175,305			93,891
Furnaces		193,055			136,177
Mineral Reserves		55,843			—
Mine Development		4,058			—
Other		4,852			3,993
Construction in progress		23,616			23,743
Property, plant, and equipment, gross		543,955			307,787
Less accumulated depreciation, depletion and amortization		(111,194	)		(77,810	)
Property, plant, and equipment, net	$	432,761			229,977

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Earnings (Loss) Per Share

12 Months Ended

Jun. 30, 2012

Earnings (Loss) Per Share [Abstract]

Earnings (Loss) Per Share

(17) Earnings Per Share

Basic earnings per common share are calculated based on the weighted average number of common shares outstanding during the years ended June 30, 2012, 2011, and 2010, respectively. Diluted earnings per common share assumes the exercise of stock options, the conversion of warrants, and the exercise of UPOs, provided in each case the effect is dilutive.

The reconciliation of the amounts used to compute basic and diluted earnings per common share for the years ended June 30, 2012, 2011, and 2010 is as follows:

	2012		2011		2010
Basic earnings per share computation
Numerator:
Net income attributable to Globe Specialty Metals, Inc.	$	54,570		52,808		34,101
Denominator:
Weighted average basic shares outstanding		75,038,674		74,924,947		73,511,696
Basic earnings per common share	$	0.73		0.70		0.46
Diluted earnings per share computation
Numerator:
Net income attributable to Globe Specialty Metals, Inc.	$	54,570		52,808		34,101
Denominator:
Weighted average basic shares outstanding		75,038,674		74,924,947		73,511,696
Effect of dilutive securities		1,585,218		1,699,398		1,258,451
Weighted average diluted shares outstanding		76,623,892		76,624,345		74,770,147
Diluted earnings per common share	$	0.71		0.69		0.46

The following potential common shares were excluded from the calculation of diluted earnings per common share because their effect would be anti-dilutive:

	2012		2011		2010
Stock options		1,101,079		66,667		160,000

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Earnings (Loss) Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended												12 Months Ended
	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2009	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010
Basic earnings per share computation - numerator [Abstract]
Net income attributable to Globe Specialty Metals, Inc.	$ 8,820	$ 11,613	$ 13,444	$ 20,693	$ 15,545	$ 23,393	$ 11,708	$ 2,162	$ 6,609	$ 516	$ 18,534	$ 8,442	$ 54,570	$ 52,808	$ 34,101
Basic earnings per share computation - denominator [Abstract]
Weighted average basic shares outstanding (in shares)													75,038,674	74,924,947	73,511,696
Basic earnings (loss) per common share (in dollars per share)	$ 0.12	$ 0.15	$ 0.18	$ 0.28	$ 0.21	$ 0.31	$ 0.16	$ 0.03	$ 0.09	$ 0.01	$ 0.25	$ 0.12	$ 0.73	$ 0.70	$ 0.46
Diluted earnings per share computation - numerator [Abstract]
Net income attributable to Globe Specialty Metals, Inc.	$ 8,820	$ 11,613	$ 13,444	$ 20,693	$ 15,545	$ 23,393	$ 11,708	$ 2,162	$ 6,609	$ 516	$ 18,534	$ 8,442	$ 54,570	$ 52,808	$ 34,101
Diluted earnings per share computation - denominator [Abstract]
Weighted average basic shares outstanding (in shares)													75,038,674	74,924,947	73,511,696
Effect of dilutive securities (in shares)													1,585,218	1,699,398	1,258,451
Weighted average diluted shares outstanding (in shares)													76,623,892	76,624,345	74,770,147
Diluted earnings per common share (in dollars per share)	$ 0.12	$ 0.15	$ 0.18	$ 0.27	$ 0.20	$ 0.30	$ 0.15	$ 0.03	$ 0.09	$ 0.01	$ 0.25	$ 0.12	$ 0.71	$ 0.69	$ 0.46
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares (in shares)													1,101,079	66,667	160,000

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Consolidated Statements of Cash Flows (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010
Condensed Consolidated Statements of Cash Flows (Unaudited) [Abstract]
Net cash acquired for acquisition of a business	$ 4,090	$ 0	$ 1,873
Net cash divested from disposal of business	0	0	17,132
Supplemental disclosures of cash flow information:
Refunds for income taxes	$ 3,194	$ 586	$ 2,729

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2012	Jun. 30, 2011
ASSETS
Allowance for doubtful accounts	$ 955	$ 715
Stockholders' equity:
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	150,000,000	150,000,000
Common stock, issued (in shares)	75,331,310	75,289,614
Treasury stock at cost (in shares)	282,437	282,437

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Accrued Expenses and Other Current Liabilities

12 Months Ended

Jun. 30, 2012

Accrued Expenses and Other Current Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities

(10) Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities comprise the following at June 30:

			2012	2011
Accrued wages, bonuses, and benefits		$	12,135	11,877
Acquired contract obligations			7,173	—
Deferred revenue			4,909	—
Accrued income taxes			3,846	4,257
Current portion of capital lease obligations			2,544	—
Current portion of retained acquisition contingencies			1,479	10,931
Accrued insurance			1,297	758
Accrued property taxes			1,149	1,161
Accrued professional fees			524	1,093
Deferred taxes			49	36
Other			5,497	4,362
	Total	$	40,602	34,475

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Document and Entity Information (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Jun. 30, 2012	Aug. 23, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	GLOBE SPECIALTY METALS INC
Entity Central Index Key	0001383571
Current Fiscal Year End Date	--06-30
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		$ 861.1
Entity Common Stock, Shares Outstanding		75,051,549
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Jun. 30, 2012

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Other Long-Term Liabilities

12 Months Ended

Jun. 30, 2012

Other Long-Term Liabilities [Abstract]

Other Long-Term Liabilities

(11) Other Long-Term Liabilities

Other long-term liabilities comprise the following at June 30:

	2012		2011
Accrued pension and postretirement benefits liability	$	34,076		7,716
Capital lease obligations		11,742		—
Acquired contract obligations		10,949		—
Retained acquisition contingencies		4,931		5,791
Asset retirement obligations		3,424		—
Other		5,681		3,717
Total	$	70,803		17,224

XML

Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2010
Consolidated Statements of Income [Abstract]
Net sales	$ 705,544		$ 641,863		$ 472,658
Cost of goods sold	552,873		488,018		390,093
Selling, general, and administrative expenses	61,623		54,739		47,875
Research and development	127		87		200
Business interruption insurance recovery	(450)		0		0
Restructuring charges	0		0		(81)
(Gain) loss on sale of business	(54)		4,249		(19,715)
Operating income	91,425		94,770		54,286
Other income (expense):
Interest income	243		214		318
Interest expense, net of capitalized interest	(7,610)	[1]	(3,198)	[1]	(4,372)	[1]
Foreign exchange gain (loss)	1,191		(390)		3,811
Other income	1,387		1,318		764
Income before provision for income taxes	86,636		92,714		54,807
Provision for income taxes	28,760		35,988		20,539
Net income	57,876		56,726		34,268
Income attributable to noncontrolling interest, net of tax	(3,306)		(3,918)		(167)
Net income attributable to Globe Specialty Metals, Inc.	$ 54,570		$ 52,808		$ 34,101
Weighted average shares outstanding:
Basic (in shares)	75,038,674		74,924,947		73,511,696
Diluted (in shares)	76,623,892		76,624,345		74,770,147
Earnings per common share:
Basic (in dollars per share)	$ 0.73		$ 0.70		$ 0.46
Diluted (in dollars per share)	$ 0.71		$ 0.69		$ 0.46
Cash dividends declared per common share (in dollars per share)	$ 0.20		$ 0.15		$ 0

[1] Net of capitalized interest.

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Prepaid Expenses and Other Current Assets

12 Months Ended

Jun. 30, 2012

Prepaid Expenses and Other Current Assets [Abstract]

Prepaid Expenses and Other Current Assets

(5) Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets comprise the following at June 30:

	2012		2011
Deferred taxes	$	4,681		5,766
Income tax receivables		6,450		3,777
Value added and other non-income tax receivables		4,370		3,391
Restricted cash		—		4,404
Other		12,414		10,538
Total	$	27,915		27,876

 

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Inventories

12 Months Ended

Jun. 30, 2012

Inventories [Abstract]

Inventories

(4) Inventories

Inventories comprise the following at June 30:

	2012		2011
Finished goods	$	41,550		29,570
Work in process		403		2,078
Raw materials		62,957		67,213
Parts and supplies		14,531		10,431
Total	$	119,441		109,292

At June 30, 2012, $112,418 in inventory is valued using the first-in, first-out method and $7,023 using the average cost method. At June 30, 2011, $102,478 in inventory is valued using the first-in, first-out method and $6,814 using the average cost method.

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Stockholders' Equity

12 Months Ended

Jun. 30, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

(16) Stockholders' Equity

a.  Common Stock

In August 2009, the Company closed on an initial public offering on the NASDAQ Global Select Market of 16,100,000 shares of its common stock at $7.00 per share. Of the shares offered, 5,600,000 new shares were offered by the Company and 10,500,000 existing shares were offered by selling stockholders (which included 2,100,000 shares sold by the selling stockholders pursuant to the exercise of the underwriters' over-allotment option). Total proceeds of the offering to the Company were $36,456, net of underwriting discounts and commissions totaling $2,744.

b.  Preferred Stock

The Company is authorized to issue one million shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the board of directors. To date, no preferred stock has been issued by the Company.

c.  Warrants

In connection with the Company's initial public offering on the AIM market of the London Stock Exchange on October 3, 2005, the Company sold 33,500,000 units, consisting of one share of the Company's common stock and two redeemable common stock purchase warrants. Also in connection with this initial public offering, the Company issued an option to purchase 1,675,000 units (individually, UPO) at an exercise price of $7.50 per UPO. Each UPO consists of one share of the Company's common stock and two redeemable common stock purchase warrants. All of the Company's warrants had an exercise price of $5.00 per common share and were scheduled to expire on October 3, 2009.

During the year ended June 30, 2008, 699,440 of the warrants issued in connection with the Company's initial public offering were exercised and an additional 100,262 warrants and 50,131 common shares were issued in connection with a cashless exercise of 67,458 UPOs.

During the year ended June 30, 2009, 166,668 of the warrants issued in connection with the Company's initial public offering were exercised and an additional 485,505 warrants and 242,753 common shares were issued in connection with a cashless exercise of 282,128 UPOs. Also during the year ended June 30, 2009, the Company executed a warrant exchange program under which it agreed to exchange 5.5 warrants for one share of the Company's common stock. A total of 19,164,294 warrants were converted to 3,484,417 common shares under this exchange program.

Prior to the expiration date, the Company received exercise notifications from the holders of substantially all of the outstanding warrants and UPOs. The holders of the UPOs exercising their UPOs also immediately exercised the warrants issuable upon the exercise of their UPOs. As a result of all of these exercises, the Company issued 1,775,933 shares of common stock to the former holders of the warrants and UPOs, and no warrants or UPOs remain outstanding at June 30, 2010. The Company received $1,497 in cash with respect to these exercises, and the remainder of the shares were issued on a net, cashless basis. The sales and issuances of shares pursuant to the warrant and UPO exercises were deemed to be exempt from registration under the Securities Act of 1933 by virtue of Section 4(2) pertaining to private offers and sales or Regulation S pertaining to foreign offers and sales.

The Company has accounted for all warrant transactions as a component of stockholders' equity.

d.  Treasury Stock

In December 2008, the Company's board of directors approved a share repurchase program that authorized the Company to repurchase up to $25,000 of the Company's common stock during the ensuing six months. The program did not obligate the Company to acquire any particular amount of shares. 1,000 shares were repurchased at $4.00 per share under this program.

In connection with the Company's acquisition of approximately 81% of Solsil in February 2008, 562,867 of the 5,628,657 shares issued to the former shareholders and optionholders of Solsil were placed into escrow pending the attainment of certain milestones. In April 2008, 281,430 of these escrow shares were released based on the satisfaction of certain conditions. Upon expiration of the escrow period in February 2011, the remaining 281,437 escrow shares were returned to the Company and are now included in treasury stock at cost, which is equal to their par value.

e.  Noncontrolling Interest

As discussed in note 3, the Company recorded an increase in noncontrolling interest of $27,012 in association with the sale of a 49% membership interest in WVA LLC on November 5, 2009.

As discussed in note 3, the Company recorded an increase in noncontrolling interest of $46,762 in association with the purchase of 51% interest in Quebec Silicon on June 13, 2012.

f. Dividend

On September 16, 2010, the Company's board of directors approved a dividend of $0.15 per common share. The dividend, totaling $11,269, was paid on October 29, 2010, to stockholders of record as of October 15, 2010. 

On September 21, 2011, the Company's board of directors approved a dividend of $0.20 per common share. The dividend, totaling $15,007, was paid on October 28, 2011, to stockholders of record as of October 14, 2011.

g. Solsil Share Purchase

On December 6, 2011, the Company purchased all the shares held by one of Solsil's minority partners for $150.  Additionally, Solsil issued and sold new shares to the Company for $3,500.  Subsequent to these stock purchase transactions the Company owns 97.25% of Solsil.

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Derivative Instruments

12 Months Ended

Jun. 30, 2012

Derivative Instruments [Abstract]

Derivative Instruments

(12) Derivative Instruments

The Company enters into derivative instruments to hedge certain interest rate, currency, and commodity price risks. The Company does not engage in interest rate, currency, or commodity speculation, and no derivatives are held for trading purposes. All derivatives are accounted for using mark-to-market accounting. The Company believes it is not practical to designate its derivative instruments as hedging instruments as defined under ASC Subtopic 815-10, Derivatives andHedging (ASC 815). Accordingly, the Company adjusts its derivative financial instruments to current market value through the consolidated statement of income based on the fair value of the agreement as of period-end. Although not designated as hedged items as defined under ASC 815, these derivative instruments serve to significantly offset the Company's interest rate, currency, and commodity risks. Gains or losses from these transactions offset gains or losses on the assets, liabilities, or transactions being hedged. No credit loss is anticipated as the counterparties to these agreements are major financial institutions that are highly rated.

Interest Rate Risk:

The Company is exposed to market risk from changes in interest rates on certain of its short-term and long-term debt obligations. The Company has historically utilized interest rate swaps and interest rate cap agreements to reduce our exposure to interest rate fluctuations. All interest rate derivatives were settled when the Company closed on the $300,000 revolving multi-currency credit facility discussed in note 9.

Foreign Currency Risk:

The Company is exposed to market risk arising from changes in currency exchange rates as a result of its operations outside the United States, principally in Argentina, China and Canada. A portion of the Company's net sales generated from its non-U.S. operations is denominated in currencies other than the U.S. dollar. Most of the Company's operating costs for its non-U.S. operations are denominated in local currencies, principally the Argentine peso and the Chinese renminbi. Consequently, the translated U.S. dollar value of the Company's non-U.S. dollar net sales, and related accounts receivable balances, and our operating costs are subject to currency exchange rate fluctuations. Derivative instruments are not used extensively to manage this risk. At June 30, 2012, the Company had foreign exchange forward contracts covering approximately 7,500 Euro, expiring at dates ranging from September 2012 to November 2012, at an average exchange rate of 1.30 Canadian dollar to 1.00 Euro.

Commodity Price Risk:

The Company is exposed to price risk for certain raw materials and energy used in its production process. The raw materials and energy that the Company uses are largely commodities subject to price volatility caused by changes in global supply and demand and governmental controls. Derivative financial instruments are not used extensively to manage the Company's exposure to fluctuations in the cost of commodity products used in its operations. The Company attempts to reduce the impact of increases in its raw material and energy costs by negotiating long-term contracts and through the acquisition of companies or assets for the purpose of increasing its access to raw materials with favorable pricing terms.

In June 2010, the Company entered into a power hedge agreement on a 175,440 MWh notional amount of electricity, representing approximately 20% of the total power required by our Niagara Falls, New York plant. This hedge covers our expected needs not supplied by the facility's long-term power contract over the term of the hedge agreement. The notional amount decreases equally per month through the agreement's expiration on June 30, 2012. Under the power hedge agreement, the Company fixed the power rate at $39.60 per MWh over the life of the contract. In October 2010, the Company entered into a power hedge agreement on an 87,600 MWh notional amount of electricity, also for power required at our Niagara Falls, New York plant. The notional amount decreases equally per month from the agreement's July 1, 2012 effective date through its expiration on June 30, 2013. Under this power hedge agreement, the Company fixed the power rate at $39.95 per MWh over the life of the contract.

The effect of the Company's derivative instruments on the consolidated statements of income is summarized in the following table:

	(Loss) Gain Recognized During the Years Ended June 30									Location
	2012			2011			2010			of (Loss) Gain
Interest rate derivatives	$	(119	)		(252	)		(1,231	)	Interest expense
Foreign exchange forward contracts		20			(190	)		772		Foreign exchange gain (loss)
Power hedge		(1,272	)		173			(243	)	Cost of goods sold

The fair values of the Company's derivative instruments at June 30, 2012 are summarized in note 19 (Fair Value Measures). The liability associated with the Company's power hedge of $742 is included in other long-term liabilities, and the liability associated the Company's foreign exchange forward contracts of $20 is included in accrued expenses and other curent liabilities.  The company holds no interest rate derivatives at June 30, 2012.

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Investments in Unconsolidated Affiliates

12 Months Ended

Jun. 30, 2012

Investments in Unconsolidated Affiliates [Abstract]

Investments in Unconsolidated Affiliates

(8) Investments in Unconsolidated Affiliates

Investments in unconsolidated affiliates comprise the following:

	Ownership Interest			Balance at June 30, 2012		Balance at June 30, 2011
Equity method investment:
Norchem		50.00	%	$	3,244		2,667
Other cost investments:
Inversora Nihuiles S.A.(a)		9.75			3,067		3,067
Inversora Diamante S.A.(b)		8.40			2,906		2,906
Total				$	9,217		8,640

____________

(a) This entity owns a 51% interest in Hidroelectrica Los Nihuiles S.A., which is a hydroelectric company in Argentina.

(b) This entity owns a 59% interest in Hidroelectrica Diamante S.A., which is a hydroelectric company in Argentina.

Equity income from our Norchem investment was $577, $455, and $257, respectively, for the years ended June 30, 2012, 2011, and 2010, which is included in other income.

XML

Accrued Expenses and Other Current Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Jun. 30, 2011
Accrued Expenses and Other Current Liabilities [Abstract]
Accrued wages, bonuses, and benefits	$ 12,135	$ 11,877
Acquired contract obligations	7,173	0
Deferred revenue	4,909	0
Accrued income taxes	3,846	4,257
Current portion of capital lease obligations	2,544	0
Current portions of retained acquisition contingencies	1,479	10,931
Accrued insurance	1,297	758
Accrued property taxes	1,149	1,161
Accrued professional fees	524	1,093
Deferred taxes	49	36
Other	5,497	4,362
Total	$ 40,602	$ 34,475

XML

Property, Plant, and Equipment

12 Months Ended

Jun. 30, 2012

Property, Plant, and Equipment [Abstract]

Property, Plant, and Equipment

(6) Property, Plant, and Equipment

Property, plant, and equipment, net is comprised of the following at June 30:

	2012			2011
Land, land improvements, and land use rights	$	10,831			6,907
Building and improvements		76,395			43,076
Machinery and equipment		175,305			93,891
Furnaces		193,055			136,177
Mineral Reserves		55,843			—
Mine Development		4,058			—
Other		4,852			3,993
Construction in progress		23,616			23,743
Property, plant, and equipment, gross		543,955			307,787
Less accumulated depreciation, depletion and amortization		(111,194	)		(77,810	)
Property, plant, and equipment, net	$	432,761			229,977

Depreciation, depletion and amortization expense for the year ended June 30, 2012 was $34,848, of which $34,083 is recorded in cost of goods sold and $765 is recorded in selling, general, and administrative expenses, respectively. Depreciation, depletion and amortization expense for the year ended June 30, 2011 was $25,055, of which $24,330 is recorded in cost of goods sold and $725 is recorded in selling, general, and administrative expenses, respectively. Depreciation, depletion and amortization expense for the year ended June 30, 2010 was $20,362, of which $19,912 is recorded in cost of goods sold and $450 is recorded in selling, general, and administrative expenses, respectively.

Capitalized interest for the years ended June 30, 2012, 2011, and 2010 was $24, $52, and $376, respectively.

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Goodwill and Other Intangible Assets

12 Months Ended

Jun. 30, 2012

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

(7) Goodwill and Other Intangibles

Goodwill and other intangibles presented below have been allocated to the Company's operating segments.

a.  Goodwill

Changes in the carrying amount of goodwill, by reportable segment, during the years ended June 30 are as follows:

				Globe
	GMI			Metales		Solsil			Other		Total
Balance at June 30, 2010
Goodwill	$	30,405			14,313		57,656			7,307		109,681
Accumulated impairment loss		—			—		(57,656	)		—		(57,656	)
		30,405			14,313		—			7,307		52,025
Core Metals purchase price allocation adjustments		1,124			—		—			—		1,124
Foreign exchange rate changes		—			—		—			354		354
Balance at June 30, 2011
Goodwill		31,529			14,313		57,656			7,661		111,159
Accumulated impairment loss		—			—		(57,656	)		—		(57,656	)
		31,529			14,313		—			7,661		53,503
Quebec Silicon acquisition		3,063			—		—			—		3,063
Foreign exchange rate changes		(1	)		—		—			175		174
Balance at June 30, 2012
Goodwill		34,591			14,313		57,656			7,836		114,396
Accumulated impairment loss		—			—		(57,656	)		—		(57,656	)
	$	34,591			14,313		—			7,836		56,740

b.  Other Intangible Assets

There were no changes in the value of the Company's indefinite lived intangible assets during the years ended June 30, 2012 or 2011. The trade name balance is $477 at June 30, 2012 and 2011.

Amortization expense of purchased intangible assets for the years ended June 30, 2012, 2011 and 2010 was $0, $0 and $310, respectively, which is recorded in cost of goods sold.  The carrying amount of definite lived intangible assets at both June 30, 2012 and June 30, 2011 is $0.

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Debt

12 Months Ended

Jun. 30, 2012

Debt [Abstract]

Debt

(9) Debt

a.  Short-Term Debt

Short-term debt comprises the following:

					Weighted
				Outstanding	Average		Unused
				Balance	Interest Rate		Credit Line
June 30, 2012:
Type debt:
	Export financing		$	—	—	$	9,269
	Other			317	5.00%		—
		Total	$	317		$	9,269
June 30, 2011:
Type debt:
	Export financing		$	731	2.75%	$	8,310
	Other			363	8.00%		—
		Total	$	1,094		$	8,310

Export Financing Agreements — The Company's Argentine subsidiary maintains various short-term export financing agreements. Generally, these arrangements are for periods ranging between seven and eleven months, and require the Company to pledge as collateral certain export accounts receivable.

b.  Revolving Credit Agreements

A summary of the Company's revolving credit agreements at June 30, 2012 is as follows:

			Weighted
		Outstanding	Average		Unused	Total
		Balance	Interest Rate		Commitment	Commitment
Revolving multi-currency credit facility	$	128,163	2.00%	$	171,837	300,000
Revolving credit agreement		3,223	5.00%		11,417	14,640
Revolving credit facility		9,000	2.39%		11,000	20,000

On May 31, 2012 the Company entered into a credit agreement which provides for a $300,000 five-year revolving multi-currency credit facility which includes provisions for the issuance of standby letters of credit, a $10,000 sublimit for swingline loans and a $25,000 sublimit letter of credit facility. The credit facility refinanced existing debt and closing costs of $96,550 and financed the acquisition of Quebec Silicon of $31,800. The credit facility currently provides an additional $171,800 of borrowing capacity. At the Company's election, the credit facility may be increased from time to time by an amount up to $125,000 in the aggregate; such increase may be in the form of term loans or increases in the revolving credit line. The agreement contains provisions for adding domestic and foreign subsidiaries of the Company as additional borrowers under the credit facility. The agreement terminates on May 31, 2017 and requires no scheduled prepayments before that date. The Company classifies borrowings under this credit facility as long-term liabilities.

Interest on borrowings under the credit agreement is payable, at the Company's election, at either (a) a base rate (the higher of (i) the U.S. federal funds rate plus 0.50% per annum, (ii) the Administrative Agent's prime rate or (iii) an adjusted London Interbank Offered Rate for loans with a one month interest period plus 1.00% per annum plus a margin ranging from 0.75% to 1.50% per annum (such margin determined by reference to the leverage ratio set forth in the credit agreement), or (b) the adjusted London Interbank Offered Rate plus a margin ranging from 1.75% to 2.50% per annum (such margin determined by reference to the leverage ratio set forth in the credit agreement). Certain commitment fees are also payable under the credit agreement. The credit agreement contains various covenants. They include, among others, a maximum total debt to earnings before income tax, depreciation and amortization ratio, a minimum interest coverage ratio and a maximum capital expenditures covenant. The credit facility is guaranteed by certain of the Company's domestic subsidiaries (the "Guarantors"). Borrowings under the credit agreement are collateralized by substantially all of the assets of the Company and the Guarantors, including certain real property, equipment, accounts receivable and inventory and the stock of certain of the Company's and the Guarantors' subsidiaries.

The Company was in compliance with the loan covenants at June 30, 2012, except as related to restrictions on capital expenditures. The Company received a waiver for the restriction limiting capital expenditures for the fiscal year ended June 30, 2012.

On October 1, 2010, the Company entered into a $15,000 revolving credit facility, and utilized proceeds from borrowings under the revolving credit facility to repay the Company's $5,880 short-term notes payable to Dow Corning. On March 5, 2012, the Company entered into an agreement to amend the Company's existing revolving credit facility. The amended agreement provides for a $20,000 revolving credit facility. Total borrowings under this revolving credit facility were $9,000 at June 30, 2012. Interest on advances under the revolving credit facility accrues at LIBOR plus an applicable margin percentage or, at the Company's option, prime plus an applicable margin percentage. The credit facility is subject to certain restrictive and financial covenants, which include limits on additional debt, a maximum ratio of debt to earnings before interest, taxes, depreciation and amortization and minimum net worth. The Company was in compliance with the loan covenants at June 30, 2012. The Company classifies borrowings under this revolving credit facility as current liabilities as the arrangement is payable in full upon the earlier of 10 business days following written demand by the lender or the agreement's expiration on June 30, 2013.

The Company's subsidiary, Quebec Silicon, entered into a revolving credit agreement dated October 1, 2010 and amended on November 23, 2011, which provides for up to $15,000 Canadian Dollars to fund Quebec Silicon's working capital requirements. Funding under the revolving credit agreement is available upon request at any time, up to the full amount of the unused credit commitment and subject to continued compliance. Interest on borrowings under the credit agreement is payable at a variable rate of Canadian prime plus 2.00% (5.00% at June 30, 2012), payable quarterly. The credit agreement expires on October 1, 2013, and may be terminated earlier, at the lender's discretion. All of Quebec Silicon's assets, properties and revenues have been pledge as security for Quebec Silicon's obligations under the revolving credit agreement. As of June 30, 2012, $3,223 ($3,304 Canadian Dollars) was outstanding under the facility.

On March 30, 2011, certain of the Company's domestic subsidiaries (the Borrowers) entered into an agreement to amend and restate the Company's existing senior credit facility and senior term loan. The amended and restated senior credit agreement provides for a $90,000 revolving credit facility, subject to a defined borrowing base, and matures on March 30, 2014. This facility includes a provision for the issuance of standby letters of credit and a $10,000 sublimit for swingline loans. The facility may be increased from time to time by an amount up to $10,000 in the aggregate at the Company's election, subject to approval by the existing or additional lenders. Interest on borrowings under the credit agreement is payable, at the Company's election, at either a base rate (the higher of the U.S. federal funds rate plus 0.50% per annum and the issuing bank's "prime rate") plus a margin of 1.50% per annum, or LIBOR plus a margin of 2.25% per annum. Certain commitment fees are also payable under the credit agreement. The facility is guaranteed by certain of the Borrowers' subsidiaries, and borrowings under the credit agreement are collateralized by the Borrowers' cash and cash equivalents, accounts receivable, and inventories, and the stock of their subsidiaries. Outstanding balances on this term loan were paid down and refinanced with the revolving multi-currency credit facility the Company entered into on May 31, 2012.

See note 12 (Derivative Instruments) for a discussion of derivative financial instruments entered into to reduce the Company's exposure to interest rate fluctuations on outstanding debt.

c.  Long-Term Debt

The Company's subsidiary, GBG Holdings, LLC, entered into a three-year term loan in an aggregate principal amount of $50,000 in July 2011. Interest on the term loan accrues at LIBOR plus an applicable margin percentage. Outstanding balances on this term loan were paid down and refinanced with the revolving multi-currency credit facility the Company entered into on May 31, 2012.

d.  Fair Value of Debt

The recorded carrying values of our debt balances approximate fair value given our debt is at variable rates tied to market indicators or is short-term in nature.

XML

Pension Plans, Fair Value and Other Benefit Plans (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 39,425	$ 22,502
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract]
Maximum amount employer matches of employees eligible contribution (in hundredths)	25.00%
Maximum contribution per employee that is eligible for company matching (in hundredths)	6.00%
Employers matching contribution [Line Items]
Employers matching contributions	330	202	223
Core Metals [Member]
Employers matching contribution [Line Items]
Employers matching contributions	102	111	26
Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	418	341
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	18,751	17,091
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	418	341
Significant Observable Inputs (Level 2) [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	20,674	5,411
Significant Observable Inputs (Level 2) [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Domestic Equity Mutual Funds [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	4,307	5,083
Domestic Equity Mutual Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	4,307	5,083
Domestic Equity Mutual Funds [Member] | Significant Observable Inputs (Level 2) [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
International Equity Mutual Funds [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	3,707	2,573
International Equity Mutual Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	3,707	2,573
International Equity Mutual Funds [Member] | Significant Observable Inputs (Level 2) [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Comingled Domestic Equity Funds [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	3,253	3,374
Comingled Domestic Equity Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Comingled Domestic Equity Funds [Member] | Significant Observable Inputs (Level 2) [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	3,253	3,374
Commingled International Equity Funds [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	6,339
Commingled International Equity Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0
Commingled International Equity Funds [Member] | Significant Observable Inputs (Level 2) [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	6,339
Fixed Income Mutual Funds [Member] | Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	9,348	8,212
Fixed Income Mutual Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	9,348	8,212
Fixed Income Mutual Funds [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Commingled Fixed Income Mutual Funds [Member] | Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	11,082	2,037
Commingled Fixed Income Mutual Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Commingled Fixed Income Mutual Funds [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	11,082	2,037
Real Estate Mutual Funds [Member] | Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	971	882
Real Estate Mutual Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	971	882
Real Estate Mutual Funds [Member] | Significant Observable Inputs (Level 2) [Member] | Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 0	$ 0

XML

Commitments and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010
Legal Contingencies [Abstract]
Escrow deposits made and payments received		$ 2,038
Accrued for working capital claims associated with historical acquisitions		4,249
Asset Retirement Obligation [Abstract]
Mine reclamation and closure costs, noncurrent	5,731	888
Employee Contracts [Abstract]
Number of employees	1,493
Number of salaried employees	458
Number of hourly employees	1,035
Number of employees covered by union agreements	665
Percent of employees covered by union agreements (in hundredths)	44.50%
Percent of employees covered by union agreements expiring within one year (in hundredths)	17.30%
Commitment [Line Items]
Lease expense	3,527	3,173	2,191
Purchase Obligation, Fiscal Year Maturity [Abstract]
2013	3,266
2014	2,053
2015	846
2016	181
2017	0
Thereafter	0
Minimum rental commitments, capital leases
2013	2,544
2014	2,562
2015	2,445
2016	2,505
2017	2,213
Thereafter	$ 2,029
Appalachian Power [Member] | Published Tariff Rate [Member] | Alloy, West Virginia [Member]
Commitment [Line Items]
Capacity	110 MW interruptible
Brookfield Power [Member] | Fixed Rate [Member] | Alloy, West Virginia [Member]
Commitment [Line Items]
Capacity	100 MW (hydro power)
American Electric Power [Member] | Published Tariff Rate [Member] | Beverly, Ohio [Member]
Commitment [Line Items]
Capacity	2.5 MW firm 85 MW interruptible
New York Power Authority [Member] | Niagara Falls, New York [Member]
Commitment [Line Items]
Capacity	40,000 kW
New York Power Authority [Member] | Based on the EP and RP commodity agreement [Member] | Niagara Falls, New York [Member]
Commitment [Line Items]
Capacity	32.6 MW replacement 7.3 MW expansion
Alabama Power [Member] | Published Tariff Rate [Member] | Selma, Alabama [Member]
Commitment [Line Items]
Capacity	2.15 MW firm 40.85 MW interruptible
Tennessee Valley Authority [Member] | Fixed Rate, reset annually [Member] | Bridgeport, Alabama [Member]
Commitment [Line Items]
Capacity	10MW firm 30MW interruptible
Hydro Quebec [Member] | Published Tariff Rate [Member] | Benancour, Quebec [Member]
Commitment [Line Items]
Capacity	2.0 MW firm MW 80 MW interruptible

XML

Pension Plans (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2010
Pension Plans [Abstract]
Number of noncontributory defined benefit pension plans	3
Change in plan assets: [Abstract]
Fair value of plan assets at end of year	$ 39,425		$ 22,502
Funded status at end of year: [Abstract]
Fair value of plan assets	39,425		22,502
Pension Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension Contributions	2,482		1,080
Change in benefit obligations: [Abstract]
Benefit obligations at beginning of year	30,218		28,367
Acquisition of business	23,827		0
Interest cost	1,553		1,439		1,285
Service cost	102		114		26
Amendments	465		0
Actuarial loss	6,860		1,698
Benefits paid	(1,430)		(1,400)
Benefit obligations at end of year	61,595		30,218		28,367
Change in plan assets: [Abstract]
Fair value of plan assets at beginning of year	22,502		19,249
Acquisition of business	14,328		0
Actual gain on plan assets	1,543		3,573
Employer contributions	2,482		1,080
Benefits paid	(1,430)		(1,400)
Fair value of plan assets at end of year	39,425		22,502		19,249
Funded status at end of year: [Abstract]
Fair value of plan assets	39,425		22,502		19,249
Benefit obligations	61,595		30,218		28,367
Funded status	(22,170)		(7,716)
Amounts recognized in the consolidated balance sheet consist of: [Abstract]
Noncurrent liability	(22,170)		(7,716)
Current liability	0		0
Accumulated other comprehensive loss	13,008		6,356
Net actuarial loss recognized in other comprehensive income (loss)	(6,652)		1,066		(1,402)
Accumulated benefit obligation for defined benefit pension plans	61,595		30,218
Net periodic pension expense [Abstract]
Interest cost	1,553		1,439		1,285
Service cost	102		114		26
Expected return on plan assets	(1,737)		(1,487)		(1,075)
Amortization of net loss	866		678		572
Net periodic pension expense	784		744		808
Net actuarial losses to be recognized into periodic benefit cost	1,774
Assumptions used to determine net periodic expense [Abstract]
Discount rate, net periodic expense (in hundredths)			5.25%
Employer contributions [Abstract]
Estimated future employer contributions for the current fiscal year	4,128
Expected future benefit payments [Abstract]
2013	2,555
2014	2,788
2015	2,981
2016	3,193
2017	3,305
Years 2018 - 2022	17,398
Pension Plans, Defined Benefit [Member] | Maximum [Member]
Assumptions used to determine benefit obligations [Abstract]
Discount rate, benefit obligation (in hundredths)	5.00%		5.30%
Assumptions used to determine net periodic expense [Abstract]
Discount rate, net periodic expense (in hundredths)	5.30%				6.25%
Expected return on plan assets (in hundredths)	8.00%		8.50%		8.50%
Pension Plans, Defined Benefit [Member] | Minimum [Member]
Assumptions used to determine benefit obligations [Abstract]
Discount rate, benefit obligation (in hundredths)	3.50%		5.25%
Assumptions used to determine net periodic expense [Abstract]
Discount rate, net periodic expense (in hundredths)	5.00%				5.85%
Expected return on plan assets (in hundredths)	5.50%		8.00%		8.00%
Nonpension Postretirement Plan [Member]
Change in benefit obligations: [Abstract]
Benefit obligations at beginning of year	0		0
Acquisition of business	11,906		0
Interest cost	0		0		0
Service cost	0		0		0
Amendments	0		0
Actuarial loss	0		0
Benefits paid	0		0
Benefit obligations at end of year	11,906		0		0
Change in plan assets: [Abstract]
Fair value of plan assets at beginning of year	0		0
Acquisition of business	0		0
Actual gain on plan assets	0		0
Employer contributions	0		0
Benefits paid	0		0
Fair value of plan assets at end of year	0		0		0
Funded status at end of year: [Abstract]
Fair value of plan assets	0		0		0
Benefit obligations	11,906		0		0
Funded status	(11,906)		0
Amounts recognized in the consolidated balance sheet consist of: [Abstract]
Noncurrent liability	11,802		0
Current liability	104		0
Accumulated other comprehensive loss	0		0
Accumulated benefit obligation for defined benefit pension plans	11,906		0
Net periodic pension expense [Abstract]
Interest cost	0		0		0
Service cost	0		0		0
Expected return on plan assets	0		0		0
Amortization of net loss	0		0		0
Net periodic pension expense	0		0		0
Assumptions used to determine benefit obligations [Abstract]
Discount rate, benefit obligation (in hundredths)	5.10%			[1]
Assumptions used to determine net periodic expense [Abstract]
Discount rate, net periodic expense (in hundredths)		[1]		[1]		[1]
Expected return on plan assets (in hundredths)		[1]		[1]		[1]
Employer contributions [Abstract]
Estimated future employer contributions for the current fiscal year	104
Expected future benefit payments [Abstract]
2013	104
2014	153
2015	209
2016	259
2017	303
Years 2018 - 2022	$ 2,066
Equity Securities [Member]
Benefit plan asset allocation [Abstract]
Benefit plan asset allocation, minimum (in hundredths)	55.00%
Benefit plan asset allocation, maximum (in hundredths)	70.00%
Fixed Income Securities [Member]
Benefit plan asset allocation [Abstract]
Benefit plan asset allocation, minimum (in hundredths)	30.00%
Benefit plan asset allocation, maximum (in hundredths)	40.00%
Real Estate [Member]
Benefit plan asset allocation [Abstract]
Benefit plan asset allocation, minimum (in hundredths)	5.00%
Benefit plan asset allocation, maximum (in hundredths)	10.00%

[1] NA

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Inventories (Tables)

12 Months Ended

Jun. 30, 2012

Inventories [Abstract]

Schedule of Inventory

Inventories comprise the following at June 30:

	2012		2011
Finished goods	$	41,550		29,570
Work in process		403		2,078
Raw materials		62,957		67,213
Parts and supplies		14,531		10,431
Total	$	119,441		109,292

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Organization and Business Operations (Details)		12 Months Ended					0 Months Ended
	Nov. 13, 2006 Norchem [Member]	Jun. 30, 2012 Solsil [Member]	Feb. 29, 2008 Solsil [Member]	Nov. 08, 2008 Ningxia Yonvey Coal [Member]	May 15, 2008 Ningxia Yonvey Coal [Member]	Jun. 13, 2012 Quebec Silicon Limited Partnership [Member]	Nov. 05, 2009 Globe Metais [Member]	Nov. 05, 2009 WVA LLC [Member]
Subsidiary or Equity Method Investee [Line Items]
Ownership percentage (in hundredths)	50.00%
Percentage of business acquired (in hundredths)			81.00%		58.00%	51.00%
Percentage of business sold (in hundredths)							100.00%	49.00%
Subsequent ownership percentage (in hundredths)		97.25%
Additional ownership percentage acquired (in hundredths)				12.00%

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Income Taxes

12 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

Income Taxes

(14) Income Taxes

The sources of income before provision for income taxes and income attributable to noncontrolling interest for the years ended June 30, 2012, 2011, and 2010 were as follows:

			2012	2011	2010
U.S. operations		$	73,859	87,096	21,865
Non-U.S. operations			12,777	5,618	32,942
	Total	$	86,636	92,714	54,807

The components of current and deferred income tax expense are as follows:

				2012	2011	2010
Current:
	Federal		$	13,506	16,113	10,471
	State			1,996	1,982	2,686
	Foreign			3,946	4,355	14,446
		Total current		19,448	22,450	27,603
Deferred:
	Federal			8,257	12,622	(3,745)
	State			1,244	1,107	(3,315)
	Foreign			(189)	(191)	(4)
		Total deferred		9,312	13,538	(7,064)
		Total provision for income taxes	$	28,760	35,988	20,539

The following is a reconciliation, stated in percentage, of the U.S. statutory federal income tax rate to our effective tax rate for the years ended June 30, 2012, 2011, and 2010:

		2012	2011	2010
Federal statutory rate		35.0%	35.0%	35.0%
State taxes, net of federal benefit		2.4	2.6	(3.6)
Foreign tax holiday and rate differential		(1.8)	0.7	2.3
Change in valuation allowance		1.1	(0.2)	5.5
Domestic production activities deduction		(1.9)	(1.7)	(1.2)
Other items		(1.6)	2.4	(0.5)
	Effective tax rate	33.2%	38.8%	37.5%

The Company operated under a tax holiday in Argentina, where the Company's manufacturing income was taxed at a preferential rate, which varied based on production levels from the Company's Argentine facilities, compared to a statutory rate of 35%. The tax holiday in Argentina expired in June 2012. For the year ended June 30, 2012, the foreign tax holiday in Argentina provided a benefit of $144 to net income and no impact to earnings per share.

As of June 30, 2012, we had approximately $80,000 of undistributed foreign earnings. We intend to continue to reinvest earnings outside the U.S. for the foreseeable future, and therefore, have not recognized any U.S. tax expense on these earnings.

Significant components of the Company's deferred tax assets and deferred tax liabilities at June 30, 2012 and 2011 consist of the following:

				2012	2011
Deferred tax assets:
	Inventories		$	3,676	2,414
	Accounts receivable			198	139
	Accruals			9,322	6,673
	Deferred Revenue			178	298
	Net operating losses and other carryforwards			16,223	17,999
	Other assets			901	259
	Share-based compensation			5,104	4,868
		Gross deferred tax assets		35,602	32,650
	Valuation allowance			(10,340)	(8,754)
		Net deferred tax assets		25,262	23,896
Deferred tax liabilities:
	Fixed assets			(46,257)	(39,340)
	Prepaid expenses			(1,861)	(899)
	Intangibles			(1,147)	(974)
		Total deferred tax liabilities		(49,265)	(41,213)
		Net deferred tax liabilities	$	(24,003)	(17,317)

The Company has tax benefits for net operating loss carry forwards (NOLs), a portion of which are subject to various limitations, which expire at various dates in the future. The Company's NOLs and expiration dates at June 30, 2012 are as follows:

		Amount	Expires
Federal	$	23,204	2024 through 2026
State		105,123	2013 through 2031
Foreign		9,074	2013 through 2021

The Company maintains valuation allowances where it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances are included in our tax provision in the period of change. In determining whether a valuation allowance is warranted, the Company evaluates factors such as prior earnings history, expected future earnings, carry back and carry forward periods and tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. For the year ended June 30, 2012, the increase in the valuation allowance of $1,586 was primarily attributable to the Company's net operating loss carryforwards in China and a corresponding adjustment to the valuation allowance resulting in no net impact on the Company's provision for income taxes. For the year ended June 30, 2011, the decrease in the valuation allowance of $4,743 was primarily attributable to a decrease in the Company's net operating loss carryforwards in China due to taxable income in 2011 and a corresponding adjustment to the valuation allowance resulting in no net impact on the Company's provision for income taxes.

The total valuation allowance at June 30, 2012, 2011, and 2010 is $10,340, $8,754, and $13,497, respectively, and consists of the following:

		2012	2011	2010
Federal NOLs	$	4,100	4,100	3,848
State NOLs		857	819	1,055
Foreign NOLs		2,787	1,229	5,781
Federal credits		236	235	463
State credits		2,360	2,371	2,350
Total	$	10,340	8,754	13,497

The Company files a consolidated U.S. income tax return and tax returns in various state and local jurisdictions. Our subsidiaries also file tax returns in various foreign jurisdictions. The Company's principal jurisdictions include the U.S., Canada, Argentina, and China. The number of open tax years subject to examination varies depending on the tax jurisdiction. The Company's major taxing jurisdictions and the related open tax years subject to examination are as follows: the U.S. from 2009 to present, Argentina from 2006 to present, and China from 2009 to present.

General accounting principles relating to uncertain income tax positions prescribe a minimum recognition threshold a tax position is required to meet before being recognized, and provides guidance on the derecognition, measurement, classification and disclosure relating to income taxes. The following is a tabular reconciliation of the total amount of unrecognized tax benefits for the year, excluding interest and penalties:

		2012	2011	2010
Balance at the beginning of the year	$	774	2,039	—
Gross increases for prior year tax positions		—	206	2,039
Gross decreases for prior year tax positions		(252)	(1,471)	—
Balance at the end of the year	$	522	774	2,039

The Company has elected to include interest and penalties in its income tax expense. Included in our liability for uncertain tax positions are interest and penalties of $76, $145, and $336 for the years ended June 30, 2012, 2011, and 2010, respectively. For the years ended June 30, 2012, 2011, and 2010, we recognized $42, ($149), and $268, respectively, of interest and penalties in income tax benefit/provision. The Company believes that it is reasonably possible that approximately $146 of its currently remaining uncertain tax position liability may be recognized within the next twelve months. The portion of uncertain tax positions as of June 30, 2012 that would, if recognized, impact the effective tax rate was $522, $774, and $629 as of June 30, 2012, 2011, and 2010, respectively.

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Fair Value Measures

12 Months Ended

Jun. 30, 2012

Fair Value Measures [Abstract]

Fair Value Measures

(19) Fair Value Measures

ASC 820, Fair Value Measures and Disclosures, establishes a fair value hierarchy for disclosure of fair value measurements. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to value the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3 — Unobservable inputs reflecting management's own assumptions about the inputs used in pricing the asset or liability. For example, cash flow modeling using inputs based on management's assumptions.

The Company does not have any assets that are required to be remeasured at fair value at June 30, 2012. The following table summarizes liabilities measured at fair value on a recurring basis at June 30, 2012:

	Total		Level 1		Level 2		Level 3
Foreign exchange forward contracts	$	20		—		20		—
Power hedge		742		—		742		—
Restricted stock units		1,282		1,282		—		—
Total	$	2,044		1,282		762		—

The Company does not have any assets that are required to be remeasured at fair value at June 30, 2011. The following table summarizes liabilities measured at fair value on a recurring basis at June 30, 2011:

	Total		Level 1		Level 2		Level 3
Interest rate derivatives	$	320		—		320		—
Power hedge		110		—		110		—
Restricted stock units		130		130		—		—
Total	$	560		130		430		—

Derivative liabilities relate to the interest rate cap and interest rate swap agreements, the foreign exchange forward contracts, and power hedge agreement summarized in note 12 (Derivative Instruments). Fair values are determined by independent brokers using quantitative models based on readily observable market data.

The fair value of restricted stock units is based on quoted market prices of the Company stock at the end of each reporting period.

See note 9 (Debt) for information regarding the fair value of our outstanding debt.

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Operating Segments (Tables)

12 Months Ended

Jun. 30, 2012

Operating Segments [Abstract]

Consolidated net sales by product line

Each of our reportable segments distributes its products in both its country of domicile, as well as to other international customers. The following presents the Company's consolidated net sales by product line for the years ended:

			2012	2011	2010
Silicon metal		$	360,726	347,599	296,763
Silicon-based alloys			269,919	236,607	148,092
Other			74,899	57,657	27,803
	Total	$	705,544	641,863	472,658

Summarized financial information for reportable segments

Summarized financial information for our reportable segments as of, and for, the years ended June 30, 2012, 2011, and 2010 are shown in the following tables:

		2012
		Net Sales	Depreciation and Amortization	Operating Income (Loss)	Interest Income	Interest Expense (1)	Income (Loss) Before Income Taxes	Total Assets	Capital Expenditures
GMI	$	631,495	29,261	103,542	1	(5,807)	98,297	679,516	(36,126)
Globe Metais		—	—	(2)	—	—	(2)	—	—
Globe Metales		64,063	1,766	11,332	49	(1,145)	10,422	86,302	(1,926)
Solsil		—	488	(984)	—	—	(984)	30,057	(691)
Corporate		—	424	(27,268)	777	(739)	(25,570)	469,137	(2,675)
Other		28,216	2,061	490	—	(503)	158	41,538	(418)
Eliminations		(18,230)	—	4,315	(584)	584	4,315	(369,803)	—
	$	705,544	34,000	91,425	243	(7,610)	86,636	936,747	(41,836)

		2011
		Net Sales	Depreciation and Amortization	Operating Income (Loss)	Interest Income	Interest Expense (1)	Income (Loss) Before Income Taxes	Total Assets	Capital Expenditures
GMI	$	549,418	20,430	103,685	5	1,775	102,240	384,495	31,061
Globe Metais		15,421	—	397	—	—	398	294	—
Globe Metales		62,321	1,634	13,197	—	1,050	12,669	82,751	1,023
Solsil		9,420	488	8,670	—	—	8,670	29,191	165
Corporate		—	426	(29,606)	816	470	(30,086)	403,177	1,226
Other		32,325	2,077	31	1	511	428	43,317	1,564
Eliminations		(27,042)	—	(1,604)	(608)	(608)	(1,605)	(264,956)	—
	$	641,863	25,055	94,770	214	3,198	92,714	678,269	35,039

		2010
		Net Sales	Depreciation and Amortization	Operating Income (Loss)	Interest Income	Interest Expense (1)	Income (Loss) Before Income Taxes	Total Assets	Capital Expenditures
GMI	$	358,279	15,812	41,126	42	2,368	39,107	324,680	18,971
Globe Metais		62,126	776	5,263	178	525	8,579	8,192	208
Globe Metales		48,959	1,820	10,073	—	1,090	10,069	71,790	996
Solsil		20	508	(1,375)	—	30	(1,405)	30,526	(1,410)
Corporate		—	122	2,815	619	317	2,836	415,184	1,273
Other		12,557	1,634	(4,273)	6	569	(5,036)	41,508	2,863
Eliminations		(9,283)	—	657	(527)	(527)	657	(284,735)	—
	$	472,658	20,672	54,286	318	4,372	54,807	607,145	22,901

1 — Net of capitalized interest.

Net sales by geographical region

Net sales are attributed to geographic regions based upon the location of the selling unit. Net sales by geographic region for the years ended June 30, 2012, 2011, and 2010 consist of the following:

			2012	2011	2010
United States		$	625,681	574,181	407,455
Argentina			57,154	54,695	42,101
Brazil			—	—	12,820
Canada			5,520	—	—
China			3,131	899	592
Poland			14,058	12,088	9,690
	Total	$	705,544	641,863	472,658

Long-lived assets by geographical region

Long-lived assets by geographical region at June 30, 2012, 2011, and 2010 consist of the following:

			2012	2011	2010
United States		$	330,724	224,556	211,876
Argentina			31,185	31,054	31,665
Canada			100,842	—	—
China			26,288	27,524	27,428
Poland			939	823	800
	Total	$	489,978	283,957	271,769

Summary of major customers and respective percentages of consolidated net sales

The following is a summary of the Company's major customers and their respective percentages of consolidated net sales for the years ended June 30, 2012, 2011, and 2010:

		2012	2011	2010
Dow Corning		13%	17%	30%
All other customers		87	83	70
	Total	100%	100%	100%

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Other Long-Term Liabilities (Tables)

12 Months Ended

Jun. 30, 2012

Other Long-Term Liabilities [Abstract]

Other Long-Term Liabilities

Other long-term liabilities comprise the following at June 30:

	2012		2011
Accrued pension and postretirement benefits liability	$	34,076		7,716
Capital lease obligations		11,742		—
Acquired contract obligations		10,949		—
Retained acquisition contingencies		4,931		5,791
Asset retirement obligations		3,424		—
Other		5,681		3,717
Total	$	70,803		17,224

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Consolidated Statement of Changes in Stockholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive (Loss) Income [Member]	Treasury Stock at Cost [Member]	Noncontrolling Interest [Member]	Comprehensive Income [Member]
Balance at Jun. 30, 2009	$ 311,352	$ 7	$ 303,364	$ 4,660	$ (3,644)	$ (4)	$ 6,969	$ (48,525)
Balance (in shares) at Jun. 30, 2009		66,944,000
Warrants exercised	1,287	0	1,287	0	0	0	0
Warrants exercised (in shares)		257,000
UPOs exercised	210	0	210	0	0	0	0
UPOs exercised (in shares)		1,519,000
Share-based compensation	5,712	0	5,712	0	0	0	0
Share-based compensation (in shares)		3,000
Stock option exercises	616	0	616	0	0	0	0
Stock option exercises (in shares)	(98,558,000)	99,000
Stock issuance	34,768	0	34,768	0	0	0	0
Stock issuance (in shares)		5,600,000
Sale of noncontrolling interest	71,409	0	44,397	0	0	0	27,012
Realized gain on available-for-sale securities	(10)	0	0	0	(10)	0	0
Comprehensive income:
Foreign currency translation adjustment	65	0	0	0	64	0	1	65
Pension liability adjustment, net of tax	(851)	0	0	0	(851)	0	0	(851)
Unrealized gain (loss) on available-for-sale securities, net of tax	3	0	0	0	3	0	0	3
Net income	34,268	0	0	34,101	0	0	167	34,268
Total comprehensive income	33,485							33,485
Balance at Jun. 30, 2010	458,829	7	390,354	38,761	(4,438)	(4)	34,149	33,485
Balance (in shares) at Jun. 30, 2010		74,422,000
Share-based compensation	4,332	0	4,332	0	0	0	0
Share-based compensation (in shares)		4,000
Stock option exercises	5,215	1	5,214	0	0	0	0
Stock option exercises (in shares)	(878,025,000)	864,000
Cash dividend declared	(11,269)	0	0	(11,269)	0	0	0
Comprehensive income:
Foreign currency translation adjustment	795	0	0	0	795	0	0	795
Pension liability adjustment, net of tax	647	0	0	0	647	0	0	647
Unrealized gain (loss) on available-for-sale securities, net of tax	1	0	0	0	1	0	0	1
Net income	56,726	0	0	52,808	0	0	3,918	56,726
Total comprehensive income	58,169							58,169
Balance at Jun. 30, 2011	515,276	8	399,900	80,300	(2,995)	(4)	38,067	58,169
Balance (in shares) at Jun. 30, 2011		75,290,000
Share-based compensation	2,482	0	2,482	0	0	0	0
Share-based compensation (in shares)		4,000
Stock option exercises	195	0	195	0	0	0	0
Stock option exercises (in shares)	(38,000,000)	38,000
Cash dividend declared	(15,007)	0	0	(15,007)	0	0	0
Sale of noncontrolling interest	210	0	210	0	0	0	0
Solsil shares purchased	(150)	0	2,888	0	0	0	(3,038)
Acquisition of Quebec Silicon	46,762	0	0	0	0	0	46,762
Comprehensive income:
Foreign currency translation adjustment	319	0	0	0	319	0	0	319
Pension liability adjustment, net of tax	(4,125)	0	0	0	(4,125)	0	0	(4,125)
Unrealized gain (loss) on available-for-sale securities, net of tax	(39)	0	0	0	(39)	0	0	(39)
Net income	57,876	0	0	54,570	0	0	3,306	57,876
Total comprehensive income	54,031							54,031
Balance at Jun. 30, 2012	$ 603,799	$ 8	$ 405,675	$ 119,863	$ (6,840)	$ (4)	$ 85,097	$ 54,031
Balance (in shares) at Jun. 30, 2012		75,332,000

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Business Combinations, Investments, and Divestitures

12 Months Ended

Jun. 30, 2012

Business Combinations, Investments, and Divestitures [Abstract]

Business Combinations, Investments, and Divestitures

(3) Business Combinations, Investments, and Divestitures

Dow Corning Transactions:

On November 5, 2009, the Company sold 100% of its interest in Globe Metais pursuant to a purchase agreement entered into on that same date by and among the Company and Dow Corning. The cash received by the Company in connection with the disposition was approximately $65,600, which represents a purchase price of $75,000 less withholding taxes and certain expenses. Dow Corning assumed Globe Metais' cash balances totaling $16,555 and $14,000 of export prepayment financing. The final purchase price was subject to adjustment for changes in working capital as provided for in the purchase agreement, which did not result in a significant change in the final purchase price.

The sale of the Company's equity interest in Globe Metais was executed in connection with the sale of a 49% membership interest in WVA LLC, to Dow Corning, the execution of a long-term supply agreement, and an amendment to an existing supply agreement between Dow Corning and the Company to reduce the amount required to be sold in calendar year 2010 to 20,000 metric tons of silicon metal.

For accounting purposes, the Company allocated $75,000 of the total purchase price received from Dow Corning to the sale of the equity of Globe Metais and $100,000 to the sale of membership interests in WVA LLC. The allocation of total purchase price to the separate transactions was based on the relative fair values of Globe Metais and the membership interests in WVA LLC.

ASC 815.40 requires an entity to consolidate all subsidiaries over which it has a controlling financial interest and considers changes in the ownership interest while the entity retains its controlling financial interest in the subsidiary as equity transactions, resulting in no gain or loss recognition in the statement of income. As the Company retained a controlling financial interest in WVA LLC, no gain has been recognized in net income on the sale of the 49% membership interest. Rather, noncontrolling interest has been adjusted to reflect the change in our ownership interest in WVA LLC. The difference between the fair value of the consideration received, net of final purchase price adjustments, related transaction costs of $2,146, and provision for income taxes of $26,575, and the amount by which noncontrolling interest increased has been recognized as an increase in additional paid-in capital of $44,397.

Core Metals Group Holdings, LLC Transactions:

On April 1, 2010, the Company, pursuant to a Purchase and Sale Agreement dated as of March 26, 2010 (the Purchase Agreement), purchased from Ospraie Special Opportunities Master Alternative Holdings LLC, The Ospraie Fund L.P., Ospraie Holdings, Inc., and the individuals named in the Purchase Agreement, all of the ownership interests in Core Metals, a Delaware limited liability company, for approximately $52,000 in cash, including $15,329 borrowed under the Company's senior revolving credit facility. The Company engaged a third-party appraisal firm to assist in the process of determining the estimated fair value of certain assets acquired. The Company finalized the purchase price allocation for the Core Metals acquisition during the quarter ended March 31, 2011. Goodwill totaling $1,274 has been recorded and assigned to the GMI operating segment.

On April 7, 2010, the Company sold Masterloy for $3,000 in cash. Masterloy was acquired in connection with the Company's acquisition of Core Metals. Masterloy is a producer of ferrovanadium and ferromolybdenum, an ancillary business the Company does not consider critical to its fundamental business strategy.

In December 2010, the Company completed the divestiture of its 49% ownership interest in Fluorita de Mexico, S.A. de C.V. (FDM) for $2,500. The Company acquired its ownership interest in FDM in connection with the acquisition of Core Metals. FDM operates a fluorite ore mine and fluorspar processing plant located in Mexico, an ancillary business the Company does not consider critical to its fundamental business strategy. There was no gain or loss associated with the sale of the 49% ownership interest in FDM as the sales price was equal to the recorded book value of this investment.

Nigerian Mining Licenses:

In March 2011, the Company made irrevocable advances totaling approximately $17,000 to acquire through transfer exploration mining licenses in Nigeria to mine for manganese ore, a raw material used in the production of certain silicon and manganese based alloys. The transfer process was subject to regulatory approvals, which approvals have been received. The transfer of the licenses is complete and the Company may now begin to execute its operational plans.

Alden Resources, LLC:

On July 28, 2011, the Company, pursuant to three Membership Interest Purchase Agreements dated as of May 27, 2011 (the Purchase Agreements), purchased from NGPC Asset Holdings II, LP, NGP Capital Resources Company, and all other parties named in the Purchase Agreements 100% of the membership interest of Alden Resources, LLC (Alden) and Gatliff Services, LLC (Gatliff), as well as certain royalty interests held by NGP Capital Resources Company, for $73,200 plus an additional $6,800 that could be payable to NGP Capital Resources Company pursuant to an earn-out payment upon the achievement of certain financial results and operational metrics.  The Company financed the acquisition with $55,000 of bank debt and $18,200 of cash. Alden is North America's leading miner, processor and supplier of specialty metallurgical coal to the silicon and silicon-based alloy industries.  The acquisition was made in order to secure a stable, long-term and low-cost supply of specialty metallurgical coal, a key ingredient in the production of silicon metal and silicon-based alloys. The Company finalized the purchase price allocation as of June 30, 2012. The results of the businesses acquired are included in the GMI operating segment.

Quebec Silicon:

On June 13, 2012, the Company closed its acquisition of Becancour Silicon Metal Inc.'s ("BSI") 51% equity interest in Quebec Silicon Limited Partnership ("QSLP") and other working capital assets, collectively known as Quebec Silicon.  The acquisition was financed using $31,800 from the Company's new $300,000 revolving credit facility discussed in note 9 (Debt) and $8,803 cash.  The Company will operate Quebec Silicon's silicon metal plant and will purchase approximately 51% of its finished goods output at a price approximately equal to the fully loaded cost of production and sell the material to third party customers.  Dow Corning has the right to purchase the other 49% of the plant's output at a price approximately equal to the fully loaded cost of production.  This arrangement is similar to the Company's existing joint venture with Dow Corning at its Alloy, West Virginia plant. The Company has engaged a third-party appraisal firm to assist in the process of determining the estimated fair value of certain assets acquired. Based on the preliminary purchase price allocation, goodwill totaling $3,062 has been recorded in connection with the Quebec Silicon acquisition and assigned to the GMI operating segment.

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Investments in Unconsolidated Affiliates (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2010
Other cost investments:
Cost method investment	$ 9,217		$ 8,640
Invesora Nihuiles S.A. [Member]
Other cost investments:
Noncontrolling interest in affiliate (in hundredths)	9.75%	[1]
Cost method investment	3,067	[1]	3,067	[1]
Invesora Diamante S.A. [Member]
Other cost investments:
Noncontrolling interest in affiliate (in hundredths)	8.40%	[2]
Cost method investment	2,906	[2]	2,906	[2]
Norchem [Member]
Equity method investment:
Equity in income (loss) from operating subsidiaries, net of tax	577		455		257
Equity method investment	$ 3,244		$ 2,667
Equity interest in affiliate (in hundredths)	50.00%
Hidroelectica Los Nihuiles S.A. [Member]
Equity method investment:
Equity interest in affiliate (in hundredths)	51.00%
Hidroelectica Diamante S.A. [Member]
Equity method investment:
Equity interest in affiliate (in hundredths)	59.00%

[1] This entity owns a 51% interest in Hidroelectrica Los Nihuiles S.A., which is a hydroelectric company in Argentina.

[2] This entity owns a 59% interest in Hidroelectrica Diamante S.A., which is a hydroelectric company in Argentina.

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Share-Based Compensation (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010
Stock Plan Activity Since Inception [Abstract]
Increase in shares of common stock authorized for issuance under the Plan (in shares)	1,000,000
Shares of common stock authorized to be issued (in shares)	6,000,000
Shares available for grant (in shares)	497,633
Grant date fair value of options granted (in dollars per share)	$ 8.97
Share-Based Compensation, Changes In Options Outstanding [Roll Forward]
Outstanding as of beginning of period (in shares)	3,390,127,000	4,266,442,000	4,315,000,000
Granted (in shares)	1,013,270,000	7,960,000	60,000,000
Exercised (in shares)	(38,000,000)	(878,025,000)	(98,558,000)
Forfeited and expired (in shares)	0	(6,250,000)	(10,000,000)
Outstanding as of end of period (in shares)	4,365,397,000	3,390,127,000	4,266,442,000
Exercisable as of end of period (in shares)	3,537,189,000
Weighted Average Exercise Price [Abstract]
Outstanding as of beginning of period (in dollars per share)	$ 4.93	$ 5.18	$ 5.12
Granted (in dollars per share)	$ 18.58	$ 16.23	$ 11.40
Exercised (in dollars per share)	$ 5.12	$ 6.28	$ 6.25
Forfeited and expired (in dollars per share)	$ 0	$ 4.00	$ 4.00
Outstanding as of end of period (in dollars per share)	$ 8.10	$ 4.93	$ 5.18
Exercisable as of end of period (in dollars per share)	$ 5.67
Weighted Average Remaining Contractual Term [Abstract]
Outstanding as of end of period	2 years 7 months 24 days
Exercisable as of end of period	2 years 3 months 14 days
Aggregate Intrinsic Value [Abstract]
Outstanding as of end of period	$ 29,690
Exercisable as of end of period	29,673
Vested and Nonvested Options [Abstract]
Nonvested options outstanding (in shares)	828,208,000	54,251,000
Granted (in shares)	1,013,270,000
Vested (in shares)	(239,313,000)
Forfeited and expired (in shares)	0
Grant date fair value of non vested options granted (in dollars per share)	$ 8.97
Options vested during the period, weighted average grant-date fair value, as modified (in dollars per share)	$ 8.35
Forfeited and expired, weighted average grant-date fair value, as modified (in dollars per share)	$ 0
Weighted average grant-date fair value, as modified, at end of period (in dollars per share)	$ 8.93	$ 5.04
Restricted Stock Units [Abstract]
Risk-free interest rate, minimum (in hundredths)	30.00%		1.26%
Risk free interest rate (in hundredths)		0.72%
Risk-free interest rate, maximum (in hundredths)	0.64%		1.54%
Expected dividend yield (in hundredths)	0.00%	0.00%	0.00%
Expected volatility, minimum (in hundredths)	66.00%		69.10%
Expected volatility (in hundredths)		73.20%
Expected volatility, maximum (in hundredths)	70.00%		75.20%
Expected forfeiture rate (in hundredths)	0.00%	0.00%	0.00%
Expected term, minimum	3 years		2 years 6 months
Expected term		2 years 9 months 14 days
Expected term, maximum	4 years 4 months 24 days		3 years 5 months 5 days
June 30, 2013 [Member]
Share-Based Compensation Expense [Abstract]
Unrecognized compensation expense related to non-vested options	2,352
June 30, 2014 [Member]
Share-Based Compensation Expense [Abstract]
Unrecognized compensation expense related to non-vested options	2,238
June 30, 2015 [Member]
Share-Based Compensation Expense [Abstract]
Unrecognized compensation expense related to non-vested options	2,156
June 30, 2016 [Member]
Share-Based Compensation Expense [Abstract]
Unrecognized compensation expense related to non-vested options	240
June 30, 2017 [Member]
Share-Based Compensation Expense [Abstract]
Unrecognized compensation expense related to non-vested options	0
Grants Vest and Become Exercisable One Eight Increments [Member]
Stock Plan Activity Since Inception [Abstract]
Award vesting rights	Every quarter from the date of grant for two years.
Grants Vest and Become Exercisable One Sixteeth Increments [Member]
Stock Plan Activity Since Inception [Abstract]
Award vesting rights	Every quarter from the date of grant for four years.
Stock Options [Member]
Stock Plan Activity Since Inception [Abstract]
Contractual terms of option grants, minimum (in years)	5 years
Contractual terms of option grants, maximum (in years)	10 years
Grant date fair value of options granted (in dollars per share)	$ 8.97	$ 7.34	$ 4.46
Intrinsic value of options exercised	417	7,194	459
Vested and Nonvested Options [Abstract]
Grant date fair value of non vested options granted (in dollars per share)	$ 8.97	$ 7.34	$ 4.46
Share-Based Compensation Expense [Abstract]
Unrecognized compensation expense related to non-vested options	6,986
Restricted Stock Grants [Member]
Stock Plan Activity Since Inception [Abstract]
Awards granted (in shares)	452,142
Shares available for grant (in shares)	2,676
Non-qualified Stock Option [Member]
Stock Plan Activity Since Inception [Abstract]
Shares available for grant (in shares)	1,013,270
Incentive Stock Option [Member]
Stock Plan Activity Since Inception [Abstract]
Awards granted (in shares)	1,013,270
Vested in period (in shares)	5,784
Vested, fair value	1,998	8,397	10,323
Options, vested, exercisable (in shares)	5,784
Incentive Stock Option [Member] | Grants Vest and Become Exercisable One Eight Increments [Member]
Stock Plan Activity Since Inception [Abstract]
Awards granted (in shares)	27,600
Incentive Stock Option [Member] | Grants Vest and Become Exercisable June 2012 [Member]
Stock Plan Activity Since Inception [Abstract]
Awards granted (in shares)	5,784
Incentive Stock Option [Member] | Grants Vest and Become Exercisable December 2014 [Member]
Stock Plan Activity Since Inception [Abstract]
Awards granted (in shares)	61,136
Incentive Stock Option [Member] | Grants Vest and Become Exercisable One Sixteeth Increments [Member]
Stock Plan Activity Since Inception [Abstract]
Awards granted (in shares)	918,750
Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Expense [Abstract]
Share-based compensation expense	1,089
Share-based compensation expense, net of tax	587
Restricted Stock Units [Abstract]
Vesting period of award	3 years
Restricted stock units outstanding (in shares)	487,367
Liability associated with restricted stock units	1,219
Selling, General and Administrative Expenses [Member]
Share-Based Compensation Expense [Abstract]
Share-based compensation expense	2,482	4,462	5,712
Share-based compensation expense, net of tax	$ 1,338	$ 2,407	$ 3,082

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Related Party Transactions

12 Months Ended

Jun. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions

(20) Related Party Transactions

From time to time, the Company enters into transactions in the normal course of business with related parties. Management believes that such transactions are at arm's length and for terms that would have been obtained from unaffiliated third parties.

A current and a former member of the board of directors are affiliated with Marco International and Marco Realty. During the years ended June 30, 2012, 2011, and 2010, the Company:

● Paid Marco Realty $0, $0, and $166, respectively, to rent office space for its corporate headquarters in New York City, New York.

● Entered into agreements with Marco International to purchase graphitized carbon electrodes. Purchases under these agreements totaled $18,136, $24,731, and $21,962, respectively. At June 30, 2012 and 2011, payables to Marco International under these agreements totaled $962 and $2,952, respectively.

● Entered into agreements with Marco International to purchase rare earth. Purchases under these agreements totaled $1,013, $1,001, and $0, respectively. At June 30, 2012 and 2011, payables to Marco International under these agreements totaled $0 and $1,001, respectively.

● Entered into agreements to sell ferrosilicon to Marco International. Net sales under these agreements totaled $851, $895, and $590, respectively. At June 30, 2012 and 2011, receivables from Marco International under these agreements totaled $137 and $192, respectively.

● Entered into agreements to sell calcium silicon powder to Marco International. Net sales under these agreements totaled $5,611, $524, and $0, respectively. At June 30, 2012 and 2011, receivables from Marco International under these agreements totaled $1,115 and $0, respectively.

The Company is affiliated with Norchem, Inc. (Norchem) through its 50.0% equity interest. During the years ended June 30, 2012, 2011, and 2010, the Company sold Norchem product valued at $5,923, $5,575, and $4,065, respectively. At June 30, 2012 and 2011, receivables from Norchem totaled $622 and $576, respectively.

Prior to the Company's purchase of a majority interest in Ningxia Yonvey Coal Industrial Co., Ltd (Yonvey), Yonvey's predecessor had entered into a lending agreement with the remaining minority stockholder. At June 30, 2012 and 2011, $1,112 and $1,086, respectively, remained payable to Yonvey from this related party.

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Unaudited Quarterly Results (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended												12 Months Ended
	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2009	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010
Unaudited Quarterly Results [Abstract]
Net sales	$ 191,698	$ 173,437	$ 165,547	$ 174,862	$ 175,934	$ 172,802	$ 155,775	$ 137,352	$ 146,436	$ 112,486	$ 108,278	$ 105,458
Operating income	16,780	19,950	22,230	32,465	29,560	36,753	20,229	8,228	8,187	3,307	30,466	12,326	91,425	94,770	54,286
Net income attributable to Globe Specialty Metals, Inc.	$ 8,820	$ 11,613	$ 13,444	$ 20,693	$ 15,545	$ 23,393	$ 11,708	$ 2,162	$ 6,609	$ 516	$ 18,534	$ 8,442	$ 54,570	$ 52,808	$ 34,101
Basic earnings per common share (in dollars per share)	$ 0.12	$ 0.15	$ 0.18	$ 0.28	$ 0.21	$ 0.31	$ 0.16	$ 0.03	$ 0.09	$ 0.01	$ 0.25	$ 0.12	$ 0.73	$ 0.70	$ 0.46
Diluted earnings per common share (in dollars per share)	$ 0.12	$ 0.15	$ 0.18	$ 0.27	$ 0.20	$ 0.30	$ 0.15	$ 0.03	$ 0.09	$ 0.01	$ 0.25	$ 0.12	$ 0.71	$ 0.69	$ 0.46

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Investments in Unconsolidated Affiliates (Tables)

12 Months Ended

Jun. 30, 2012

Investments in Unconsolidated Affiliates [Abstract]

Investments in unconsolidated affiliates

Investments in unconsolidated affiliates comprise the following:

	Ownership Interest			Balance at June 30, 2012		Balance at June 30, 2011
Equity method investment:
Norchem		50.00	%	$	3,244		2,667
Other cost investments:
Inversora Nihuiles S.A.(a)		9.75			3,067		3,067
Inversora Diamante S.A.(b)		8.40			2,906		2,906
Total				$	9,217		8,640

____________

(a) This entity owns a 51% interest in Hidroelectrica Los Nihuiles S.A., which is a hydroelectric company in Argentina.

(b) This entity owns a 59% interest in Hidroelectrica Diamante S.A., which is a hydroelectric company in Argentina.

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Pension Plans

12 Months Ended

Jun. 30, 2012

Pension Plans [Abstract]

Pension Plans

(13) Pension Plans

a.  Defined Benefit Retirement Plans

The Company's subsidiary, GMI, sponsors three noncontributory defined benefit pension plans covering certain employees. These plans were frozen in 2003. The Company's subsidiary, Core Metals, sponsors a noncontributory defined benefit pension plan covering certain employees. This plan was closed to new participants in April 2009.

The Company's subsidiary, Quebec Silicon, sponsors a contributory defined benefit pension plan and postretirement benefit plan for certain employees, based on length of service and remuneration. Postretirement benefits consist of a group insurance plan covering plan members for life insurance, disability, hospital, medical, and dental benefits.

The Company's funding policy has been to contribute, as necessary, an amount in excess of the minimum requirements in order to achieve the Company's long-term funding targets. During the years ended June 30, 2012 and 2011, the Company made contributions of $2,482 and $1,080, respectively, to the pension plans.

The Company uses a June 30 measurement date for these defined benefit plans.

Benefit Obligations and Funded Status — The following provides a reconciliation of the benefit obligations, plan assets, and funded status of the plans at June 30, 2012 and 2011:

				Pension Plans			Nonpension Postretirement Plan
				2012	2011		2012	2011
Change in benefit obligations:
	Benefit obligations at beginning of year		$	30,218	28,367	$	—	—
	Acquisition of business			23,827	—		11,906	—
	Interest cost			1,553	1,439		—	—
	Service cost			102	114		—	—
	Amendments			465	—		—	—
	Actuarial loss			6,860	1,698		—	—
	Benefits paid			(1,430)	(1,400)		—	—
		Benefit obligations at end of year	$	61,595	30,218	$	11,906	—
Change in plan assets:
	Fair value of plan assets at beginning of year		$	22,502	19,249	$	—	—
	Acquisition of business			14,328	—		—	—
	Actual gain on plan assets			1,543	3,573		—	—
	Employer contributions			2,482	1,080		—	—
	Benefits paid			(1,430)	(1,400)		—	—
		Fair value of plan assets at end of year	$	39,425	22,502	$	—	—
Funded status at end of year:
	Fair value of plan assets		$	39,425	22,502	$	—	—
	Benefit obligations			61,595	30,218		11,906	—
		Funded status	$	(22,170)	(7,716)	$	(11,906)	—
Amounts recognized in the consolidated balance sheet consist of:
	Noncurrent liability		$	(22,170)	(7,716)	$	11,802	—
	Current liability			—	—		104	—
	Accumulated other comprehensive loss			13,008	6,356		—	—

All of our pension and postretirement plans are underfunded, and have been underfunded for all years presented. The amounts recognized in other comprehensive (loss) income consist entirely of net actuarial loss during the years ended June 30, 2012, 2011, and 2010 and totaled ($6,652), $1,066, and ($1,402), respectively.

At June 30, 2012 and 2011, the accumulated benefit obligations were $61,595 and $30,218, respectively, for defined benefit pension plans and $11,906 and $0, respectively, for the defined postretirement benefit plan.

Net Periodic Pension Expense — The components of net periodic pension expense (benefit) for the Company's defined benefit pension plans are as follows:

			2012	2011	2010
Interest cost		$	1,553	1,439	1,285
Service cost			102	114	26
Expected return on plan assets			(1,737)	(1,487)	(1,075)
Amortization of net loss			866	678	572
	Net periodic pension expense	$	784	744	808

In fiscal year 2013, actuarial net losses of approximately $1,774 are expected to be recognized into periodic benefit cost from accumulated other comprehensive loss.

Assumptions and Other Data — The assumptions used to determine benefit obligations at June 30, 2012 and 2011 follow:

	Pension Plans		Nonpension Postretirement Plans
	2012	2011	2012	2011
Discount rate	3.5% - 5.0%	5.25% - 5.30%	5.10%	—

The discount rate used in calculating the present value of our pension plan obligations is developed based on the Citigroup Pension Discount Curve for both the GMI plans and Core Metals plan, and the Mercer Yield Curve for Quebec Silicon pension and postretirement benefit plans and the expected cash flows of the benefit payments.

The assumptions used to determine net periodic expense for the Company's defined benefit pension plans for years ended June 30, 2012, 2011, and 2010 are as follows:

	2012	2011	2010
Discount rate	5.00% - 5.30%	5.25%	5.85% - 6.25%
Expected return on plan assets	5.50% - 8.00%	8.00% - 8.50%	8.00% - 8.50%

Expected return on plan assets is determined based on management's expectations of long-term average rates of return on funds invested to provide for benefits included in the projected benefit obligations. In determining the expected return on plan assets, the Company takes into account historical returns, plan asset allocations and related investment strategies, as well as the outlook for inflation and overall fixed income and equity returns.

The Company expects to make discretionary contributions of approximately $4,128 to the pension plans for the year ending June 30, 2013.

The following reflects the gross benefit payments that are expected to be paid for the benefit plans for the years ended June 30:

		Pension Plans		Nonpension Postretirement Plans
2013	$	2,555	$	104
2014		2,788		153
2015		2,981		209
2016		3,193		259
2017		3,305		303
Years 2018-2022		17,398		2,066

The accumulated nonpension postretirement benefit obligation has been determined by application of the provisions of the Company's health care and life insurance plans including established maximums, relevant actuarial assumptions and health care cost trend rates projected at 8.5% for fiscal 2013 and decreasing to an ultimate rate of 4.5% in fiscal 2027. The effect of a 1% increase in health care cost trend rate on nonpension postretirement benefit obligation is $2,801. The effect of a 1% decrease in health care cost trend rate on nonpension postretirement benefit obligation is ($2,134).

The Company's overall strategy is to invest in high-grade securities and other assets with a limited risk of market value fluctuation. In general, the Company's goal is to maintain the following allocation ranges:

Equity securities	55 - 70%
Fixed income securities	30 - 40
Real estate	5 - 10

The fair values of the Company's pension plan assets as of June 30, 2012 are as follows:

			Quoted Prices in Active Markets for Identical Assets	Significant Observable Inputs
			(Level 1)	(Level 2)	Total
Cash and cash equivalents		$	418	—	418
Equity securities:
	Domestic equity mutual funds		4,307	—	4,307
	International equity mutual funds		3,707	—	3,707
	Commingled domestic equity funds		—	3,253	3,253
	Commingled international equity funds		—	6,339	6,339
Fixed income securities:					—
	Fixed income mutual funds		9,348	—	9,348
	Commingled fixed income funds		—	11,082	11,082
Real estate mutual funds			971	—	971
		$	18,751	20,674	39,425

The fair values of the Company's pension plan assets as of June 30, 2011 are as follows:

			Quoted Prices in Active Markets for Identical Assets	Significant Observable Inputs
			(Level 1)	(Level 2)	Total
Cash and cash equivalents		$	341	—	341
Equity securities:
	Domestic equity mutual funds		5,083	—	5,083
	International equity mutual funds		2,573	—	2,573
	Commingled domestic equity funds		—	3,374	3,374
Fixed income securities:					—
	Fixed income mutual funds		8,212	—	8,212
	Commingled fixed income funds		—	2,037	2,037
Real estate mutual funds			882	—	882
		$	17,091	5,411	22,502

See note 20 (Fair Value Measures) for additional disclosures related to the fair value hierarchy. The Company held no level 3 assets during the year.