Sep 16 2009

Chinese Aluminium Producer to Buy Icelandic Energy – Búðarháls Dam the Government’s Priority

Chinalco, China’s biggest aluminium producer, has shown interest in buying a 32% share in Þeistareykir ehf., a geothermal energy company from the north of Iceland, owned equally by three companies; Landsvirkun (Iceland’s national energy company), Norðurorka and Orkuveita Húsavíkur (O.H. – Húsavík Energy). Norðuorka has shown interest in selling its share and according to information from the Chinesee Embassy in Iceland a committee from Chinalco will go north to Húsavík soon to discuss with those who the purchase concerns. Alcoa and H.S. Orka, which has been bought by the Canadian H.S. Orka, have also shown interest in buying a share in Þeistareykir ehf.

Chinalco owns 10% shares in Rio Tinto-Alcan, which owns an aluminium smelter in Hafnarfjörður, Iceland. Chinalco has been focusing on buying up companies in different metal industries and e.g. recently bought copper mines in Latin America from Ross Beaty, the director of Magma Energy, a Canadian geothermal energy company that is in the process of buying big shares in an Icelandic energy company, H.S. Orka and has mentioned the possibility of buying shares in Geysir Green Energy, the major owner of H.S. Orka.

The coming 1st of October, the memorandum of understanding between Alcoa, the government and Norðurþing county, expires. Norðurþing has announced their interest in renewing their contract with Alcoa, which is still looking for ways to use the geothermal energy from Þeistareykir. 

Yesterday the minister of industry, Katrín Júlíusdóttir said that sHe does not really care how and by whom the geothermal energy from the north of Iceland will be used. The biggest necessity, according to her words after a government’s meeting yesterday, is to harness the resources and create jobs in the north. Júlíusdóttir has already stated her positive opinion towards lcoa’s planned aluminium smelter in Bakki, Húsavík.

In the last weeks, the government has been pushed on by the big unions, The Industry’s Association and The Economy’s Association, to remove all obstacles that could stand in the way for “necessary energy projects”, including the production of energy for Century Aluminum’s smelter in Helguvík and Rio Tinto-Alcan’s increased production in its smelter in Hafnarfjörður. According to the words of these particular parties, three dams in the Þjórsá river should be included in the government’s plans.

After the government’s meeting yesterday, the heads of the government parties said that Búðarháls Dam (Búðarhálsvirkjun) in Tungnaá river is the prioritized energy project. The dam, which is supposed to create 85 MW is being built for Rio Tinto-Alcan’s 40,000 ton production increasement and Verne Holding’s planned data center in Reykjanes. After Búðarhálsvirkjun, said the government, come the geothermal fields in Þeistareykir and Bjarnarflag.

The Social Democratic Alliance (Samfylkingin) has long time ago broken all their elcection promises concerning environmental issues since they got in power in 2007. Now, since in power from last February, the Left Green Party (Vinstri Grænir) have followed the same footsteps and broken everything they ever stood for – or rather pretended to stand for. Their environmental policy is acooring the head of the party, Steingrímur J. Sigfússon, a puritan policy that can not be practised in times of economical crisis. If people should ever loose their faith in the so-called democratic system, it is now.