UPDATE 1-Timminco loses silicon customer, shares fall

VANCOUVER, British Columbia , May 27 (Reuters) - Timminco Ltd (TIM.TO: Quote, Profile, Research) and an unnamed customer for solar grade silicon have agreed to end a supply agreement, Timminco said on Wednesday, blaming difficult economic conditions.

Under the agreement, announced in December 2007, Timminco was scheduled to ship approximately 4,400 tonnes of silicon to the customer over a five-year period.

Toronto-based Timminco said it will issue 3.62 million shares, equal to about 3 percent of shares outstanding, to settle the customer's deposit of C$5.6 million ($5 million).

Timminco stock was down 16 Canadian cents, or nearly 11 percent, on the Toronto Stock Exchange at C$1.41 after the news.

This is the second announcement from Timminco this week on renegotiated supply contracts, blamed on a soft solar power market. On Monday it said announced a much-reduced new contract with Germany's Q-Cells (QCEG.DE: Quote, Profile, Research) AG for upgraded metallurgical silicon.

($1=$1.11 Canadian) (Reporting by Nicole Mordant; editing by Rob Wilson)