Agreement on Helguvík Smelter Well Underway Skip to content

Agreement on Helguvík Smelter Well Underway

By Iceland Review

An investment agreement between Iceland’s Ministry of Industry and Nordurál – Century Aluminum because of the planned aluminum smelter in Helguvík, south Iceland, was presented at a cabinet meeting on December 23.

The Nordurál smelter in Reydarfjördur under construction. Copyright: Icelandic Photo Agency.

Minister of Industry Össur Skarphédinsson confirmed to Morgunbladid that the agreement had been discussed at the meeting and that it was well underway. However, the agreement has not been completed and the minister would therefore not go into details at this point.

According to, the agreement is of great importance to Nordurál because it confirms the government’s support to the Helguvík project and makes financing the project easier.

Before the agreement is signed, it has to be accepted by the European Free Trade Association (EFTA) Surveillance Authority (ESA), as is the case with all public grants of this kind. Thereafter, the agreement has to be accepted by Iceland’s Althingi Parliament.

When a similar agreement was made between the Ministry of Industry and Nordurál because of the Reydarfjördur aluminum smelter it took some time before ESA accepted it due to special circumstances such as exemptions from certain laws.

For example, Nordurál was exempt from paying various public tariffs for the Reydarfjördur smelter and Nordurál does not have to pay higher taxes than 15 percent of the smelter’s basic income, despite potential tax increases.

According to Morgunbladid’s sources, the planned agreement with Nordurál on the Helguvík smelter is of a similar nature.

Click here to read more about the planned Helguvík smelter.

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