Saving Iceland

Þeistareykir ehf. and Landsvirkjun (Iceland’s national energy company) have now started discussions with the Norwegian aluminium producer Norsk Hydro about the purchase of geothermal energy from Þingeyjasýsla, north Iceland. The energy was supposed to run Alcoa’s planned aluminium smelter in Bakki, Húsavík.

The memorandum of understanding between Þeistareykir, Landsvirkjun and Alcoa because of the aluminium smelter in Bakki, ran out on November 1st 2008 and was not renewed. One of the reasons was said to be the uncertainty on the Icelandic financial markets. Tómas Már Sigurðsson, Alcoa’s director in Iceland, says that decisions about electricity purchase depends on the market situation and hopes that it will get better in the next 12 months.
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Today the Icelandic government collapsed. Geir H. Haarde, Iceland’s former prime minister announced early today after a row of government meetings. Yesterday, Björgvin G. Sigurðsson, the minister of commerce, announced that he would finally take on his responsibility for the financial collapse, resign and fire the directors of the Financial Supervisory Authority (FMA).

Since the collapse of the Icelandic economy in October 2008, the current Icelandic government formed by Samfylkingin (Social Democrat Alliance) and Sjálfstæðisflokkurinn (neoliberal conservatives), has been under heavy pressure. Every Saturday for 16 weeks people have gathered by the parliament and demanded that the government will resign, the boards of the Financial Supervisory Authority and the Central Bank will be fired, that elections will take place as soon as possible and that the corruption in  the power base and financial sector be curtailed. Read More

On January 6th, more than 50 protesters stopped Vedanta, a British mining company from entering the land of the Dongria Kondh and other Kondh tribes in the state of Orissa in India. Vedanta plans to mine bauxite in the Dongria Kondh’s sacred mountains, destroying the forests – the tribe’s livelihood.

Survival International says:

Last night’s action follows high level meetings at the weekend between Vedanta’s billionaire chairman Anil Agarwal and Orissa Chief Minister Naveen Patnaik, who backs the mine. After the meeting, Agarwal told journalists that mining would start ‘within a month or two’. Read More

IHT – Arne Næss, a Norwegian philosopher whose ideas about promoting an intimate and all-embracing relationship between the earth and the human species inspired environmentalists and Green political activists around the world, died Monday. He was 96. His editor, Erling Kagge, confirmed his death to Agence France-Presse.

In the early 1970s, after three decades teaching philosophy at the University of Oslo, Næss (pronounced Ness), an enthusiastic mountain climber and an admirer of Rachel Carson’s “Silent Spring,” threw himself into environmental work and developed a theory that he called deep ecology. Its central tenet is the belief that all living beings have their own value and therefore, as Naess once put it, “need protection against the destruction of billions of humans.” Read More

The directors of Reykjavík Energy (OR) and Hitaveita Suðurnesja (HS) have both said that the companies are not able to supply all the necessary energy that Century Aluminium needs fo it’s planned aluminium smelter in Helguvík, in the next 7 years, even though 6 new power plants would be built. At least 200 MW would be needed, which is the amount of energy that could be produced by building power plants in Bitra (geothermal field) and in Urriðafoss waterfall (in Þjórsá river).

Össur Skarphéðinsson, minister of industry has on behalf of the Icelandic government, given Norðurál (Century Aluminium) the permission to build up to 360 thousand ton aluminium smelter in Helguvík, which would produce double the amount Rio Tinto Alcan’s smelter in Hafnarfjörður produces. But where does all the necessary energy – 625 MW – come from?

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Alcoa recently reported its fourth quarter 2008 results which e.g. stated that the company lost 929 million US dollars during this period. Aluminium’s global price sank 35% during the fourth quarter and 56% since only July 2008. The demand for aluminium has dropped heavily.

“We are taking wide-ranging measures to address the economic downturn,” said Klaus Kleinfeld, President and CEO of Alcoa. “We have streamlined our portfolio to focus on businesses where Alcoa is the recognized leader, curtailed production to adjust to weakened demand, reduced global headcount, and achieved significant savings in key raw materials.”

According to Aloca’s press release aluminium production will be cut down by 750 thousand tons per year, which is c.a. 18% of the global production. 13,500 workers will lose their jobs (13% of the company’s workforce), salary will be frozen and no new employees will be hired for a limited time. Four company’s owned by Alcoa, that do not work inside aluminium production will be sold and investment costs will be lowered. The press release also states that Alcoa will use new ways to get raw materials.

Alcoa’s directors in Iceland say that these measures will not affect the production and work here in Iceland.

From Aftaka.org – On December 31st, we witnessed a unique action here in Iceland. Obviously it was not the all time climax in the history of Icelandic resistance compared e.g. to the 1949 riot, when Iceland joined NATO and people put up heavy resistance in Reykjavík. But first and all, it was a symbol for the waking up which is taking place in the Icelandic society – society that before was completely apathetic. And the action worked out perfectly in that we managed to do what we wanted, to disrupt and stop the TV transmission.

Hundreds of people had gathered by the government’s office, where flares were lit and people marched to Austurvöllur, the square in front of the parliament. The group then gathered by a statue of Jón Sigurðsson, Iceland’s so called independence hero. In few minutes a live TV program called Kryddsílsd, would take place. The program is an annual show where the ministers of the government and the heads of the political parties come together to drink themselves tipsy and talk about the political year that is about to end. Read More

The construction of Búðarháls Dam (Búðarhálsvirkjun) in Tungnaá river, will probably be further delayed due to the uncertain future of Landsvirkjun´s financial possibilities. Landsvirkjun is Iceland’s national energy company. The construction was originally supposed to start early next year, after being delayed since 2003. The estimated cost is 25 billion Icelandic krónur.

Because of the collapse of the Icelandic banks and the international financial crisis, most possibilities for foreign loans are now frozen. Landsvirkjun’s long time financement is therefore quite uncertain.

“This mostly impacts new constructions, like Búðarhálsvirkjun” says Þorsteinn Hilmarsson, Landsvirkjun’s PR manager. “It is necessary to insure the future financement before the construction starts.  ”

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Bloomberg – Iceland’s planned economic recovery, based on raising exports of aluminum, may take longer to achieve than the government expects as the global slowdown forces down commodity prices, Fitch Ratings said.

The island is relying on aluminum sales, which have overtaken marine exports as its biggest export, to pull it out of the worst recession in more than half a century. The metal made up about 40 percent of total exports in the first 10 months, compared with 27 percent a year earlier, according to the statistics agency. Still, increased reliance on aluminum comes at a bad time as prices have slumped more than 30 percent since the start of the year.

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Rio Tinto Alcan has taken back it’s plan to enlarge it’s aluminium smelter in Straumsvík, Hafnarfjörður, according to the Icelandic newspaper Fréttablaðið. Alcoa’s planned smelter construction in Bakki (north-Iceland) will also be delayed for the next years. Landsvirkjun (national energy company) and Þeistareykir hf. have agreed to discuss with other interested buyers of geothermal energy in the north of Iceland.

Last Wednesday, Jacynthe Côté, Rio Tinto Alcan’s director, told Össur Skarphéðinsson, the minister of industry, that the company’s planned 40 thousand ton enlargement in Straumsvík would not take place. The enlargement was planned to take place in 2009, inside the company’s already declaired zone. The smelter’s production capacity would have raised from 185 thousand tons to 225 thousand tons.

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