Alcoa announcement greeted with revelery and protests Skip to content

Alcoa announcement greeted with revelery and protests

By Iceland Review

According to Fréttabladid, Alcoa’s announcement yesterday of a feasibility study for a 250,000 ton aluminum smelter to be built near Húsavík starting as early as 2010 was greeted with “massive jubilation” by the residents of Húsavík. A number of people had assembled at the tavern Gamli Baukurinn and “celebrated enthusiastically” when they received news of the annoucement.

Concurrent with the announcement, Bernt Reitan of Alcoa and the Icelandic Minister of Trade and Commerce, Valgerdur Sverrisdóttir of the Progressive Party, signed a memorandum of understanding between Alcoa and Iceland relating to the feasibility study. According to the Wall Street Journal, the feasibility study “could take one year” and “doesn’t guarantee” the smelter will be built in Iceland. “We feel very much at home” in Iceland, said Bernt Reitan to the Wall Street Journal.

In addition to serving as minister, Valgerdur Sverrisdóttir is the first member of parliament for north-eastern Iceland; her constituency includes Húsavík. According to Fréttabladid, she said that the smelter “presents a massive opportunity for northern Iceland, even if the impact will be the most at Húsavík.” She expects additional jobs also to be created at nearby Akureyri and said that “transportation links between Akureyri and Húsavík must be improved.” Valgerdur also said it was important to prioritize [economic] projects “in such a way the impact is positive, not negative.”

The government has a great responsibility in that matter because it is, of course, entrusted with steering the nation’s economy,” she said. Therefore it was important to arrange [economic] projects “in such a manner that there is not too much going on at the same time,” she said.

If built, the smelter at Húsavík will be Alcoa’s second facility in Iceland. Alcoa is currently building an aluminum smelter at Reydarfjördur in eastern Iceland. The smelter at Reydarfjördur and the hydroelectric dam at Kárahnjúkar, which is being built to supply it, have been heavily criticized for their adverse economic and environmental impact.

Apart from the revelry at Húsavík, public reaction has been mixed.

The leader of the Social Democrats, Ingibjörg Sólrún Gísladóttir, said to Fréttabladid that it was “inopportune” to build three more smelters in Iceland, referring the the proposed new Alcoa smelter and two other expansion projects proposed by Alcan and Century Aluminum. Alcan and Century also operate smelters in Iceland, at Straumsvík near Hafnarfjordur and at Grundartangi close to Akranes.

Of the three proposed locations, Ingibjörg said building a smelter at Húsavík was the “least worst,” taking into account “the employment conditions there.”

“The government should receive the humiliation award,” said Steingrímur J. Sigfússon, leader of the Left-Green Party, for “crawling on their knees in front of American aluminum moguls.”

“The smelter won’t put further pressure on the economy,” said Prime Minister Halldór Ásgrímsson, chairman of the Progressives, “There is leeway for this smelter.” He added that the planning for this decision had been “thorough. The memorandum was [an investment] for the future, and new projects must be undertaken shortly. Icelanders must make use of their energy resources,” he said to Fréttabladid, and “make use of such opportunities as present themselves.”

Árni Mathisen, Minister of Finance and member of parliament for the Independence Party, said the announcement of the feasibility study must be greeted with some caution since a final decision for building a smelter had not yet been made.

According to Fréttabladid, fifteen teenagers protesting the proposed new smelter forced their way into the offices of Alcoa in Reykjavík and behaved in an “unruly manner.” An Alcoa spokesperson said in a statement “unfortunately the commotion was disruptive, and therefore police had to be summoned.” A spokesperson for the protesters said the police had been “rough,” but “not violent.”

Fridrik Sophusson, CEO of Landsvirkjun, said to Fréttabladid that there was “plenty of supply” of electricity available for the new smelter.

According to Fréttabladid, the director of the University of Iceland’s Institute for Economics, Tryggvi Thór Herbertsson, said at an event sponsored by Landsvirkjun that the effect of the current Alcoa smelter on the overheating of the Icelandic economy was “overrated” and blamed instead “lack of preparation in fiscal policy” and structural changes in the financial markets.

In the Icelandic parliament, Althingi, the chief whip of the Left-Greens, Ögmundur Jónasson, has requested a special session to discuss the proposed plans for the smelter at Húsavík.

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