Saving Iceland

According to sources close to the business newspaper Viðskiptablaðið, Alcoa has lost all patience with the situation in Húsavík and will drop plans to build a proposed aluminium smelter in the region.

The project has been fraught with obstacles since its inception. Most notably, Minister for the Environment Svandís Svavarsdóttir has been an outspoken opponent of the plan. A damning assessment from the Icelandic National Planning Agency concluded that the proposed smelter would also have a “significant negative impact” on the environment not just of the surrounding area, but on Iceland as a whole. A few days ago Landsvirkjun, Iceland’s National Energy company, announced that they would neither fight for or against the protection of the area and that they will not perform “test” drills in Gjástykki (a globally unique geothermal area in the north of Iceland with ravines, faults, lava fields and volcanic craters) until the government had completed the process of protecting the area, even if they had got a go a head to do so by the National Energy Authority. Read More

Following is a short clip from the documentary ‘Dreamland’, made by Andri Snær Magnason and Þorfinnur Guðnason in 2009. Here you can see Friðrik Sóphusson, then head of Landsvirkjun (Icelandic Power Company), telling the American ambassador in Iceland how they are “bending all the rules, just for this” referring to the Alcoa project in Reyðarfjörður.

Since 2002, when work began on constructing the Kárahnjúkar dam, which today provides electricity to Alcoa’s aluminum smelter in Reyðarfjörður, until end of the year 2009, 1700 work related injuries have been reported in relation to the dam’s construction. 120 of those injured are still disabled from work, ten of them having irrecoverable injuries – and four workers have died as results of their accidents.

When put into context with work related accidents in the rest of Iceland during that same eight year period, it becomes crystal clear that Kárahnjúkar was by far the single most dangerous workplace in the country. The 120 workers still disabled from work ammount to over 70% of all work related disabilities registered in the period, with eight times as many disabilities spawned from Kárahnjúkar than the rest of the country combined. The four who died as results of their accidents count 15% of all work related deaths in the country for those eight years, but they were 26 in all. Read More

Rio Tinto Alcan (ISAL) has landed all the energy-related deals necessary for the company to start expanding it’s aluminum smelter in Straumsvík. In the middle of June, Landsvirkjun (National Power Company) and Alcan renewed their current deal on energy purchase between the companies. The renewal included an extension on purchase right up until the year 2036, along with an added purchase of 75MW of power, energy Alcan needed to secure to be able to act on their plans on expanding the smelters productional capacity by 40.000 tons a year. This expansion will not exceed the companies current boundaries, thus manouvering around any results from local referandums against the smelters expansion. As mentioned earlier, the expansion also requires these 75MW of power on top of all the energy Alcan is already receiving at bargain prices. But the deal does have some reservations, most prominently a demand that the uncertainity about the taxation of heavy industry in the country be settled before the 31^st of August. This is a clear and blatant example of how the power-sector and aluminum lobbyists toy with the countrys government, that has never dared to resist or stand up to this kind of pressure, or blackmails as it is, of financial muscle, so the same should be expected in this case.

A week after the signing of the deal with Alcan, Landsvirkjun invited tenders on the construction of Búðarháls-powerplant and related constructions. The tenders close at the end of August, and construction is expected to be finished by the fall of 2013. Read More

Join our resistance against the industrialization of Europe’s last remaining great wilderness and take direct action against heavy industry!

The Struggle So Far
The campaign to defend Europe’s greatest remaining wilderness continues. For the past five years summer direct action camps in Iceland have targeted aluminium smelters, mega-dams and geothermal power plants.

After the terrible destruction as a result of building Europe’s largest dam at Kárahnjúkar and massive geothermal plants at Hengill, there is still time to crush the ‘master plan’ that would have each major glacial river dammed, every substantial geothermal field exploited and the construction of aluminium smelters, an oil refinery, data farms and silicon factories. This would not only destroy unique landscapes and ecosystems but also lead to a massive increase in Iceland’s greenhouse gas emissions. Read More

He Guoqiang, party secretary of the Central Commission for Discipline Inspection of the Chinese Communist Party, is visiting Iceland along with a delegation of business personale. They will be meeting with the country´s president, Ólafur Ragnar Grímsson, prime minister Jóhanna Sigurðardóttir and the foreign minister, Össur Skarphéðinsson, along with the heads of certain companies they´re interested in cooperating with.

On the 9^th of June, he and his delegation attended a meeting with heads of Landsvirkjun (National Power Company) where a letter of intent was signed on behalf of Landsvirkjun on one side, one of China´s biggest contracting companies, China International Water & Electric Corporation (CWE) and the government owned Export-Import Bank of China (Exim Bank) on the other. The letter regards participation on tender offers to harness energy in Iceland. The letter does not commit any of these partners to any deals, but Landsvirkjun claims the letter displays their interest in doing business with these partners and CWE´s interest in bidding on the Búðarhálsdam project, with Exim Bank willing to finance some of CWE´s projects for Landsvirkjun. Read More

 

The deals on energy prices between Landsvirkjun (Iceland´s National Energy company) and the aluminum companies working in Iceland have been kept secret from the public since they got signed. The only notion the public had was a pamphlet called ”Lowest Energy Prices”, published in 1995 to lure heavy industry to the country, which like the name states, was filled with promises about cheap, greenwashed, energy. Looking at surrounding countries many estimated that the prices were close to a half of what households in Iceland pay. But after Alain Belda, Alcoa´s president, had the now famous slip of his tounge in Brazil that revealed that they were paying $15 for the MWh (megawatt hour), and RUV´s (Icelandic National Broadcasting Association) exposure of Century Aluminum´s prices earlier in the year, Landsvirkjun decided to open their books in, what they call ”an attempt to create peace around the company´s actions”. In reality they´re just blowing smoke in people faces with well chosen figures in a desperate attempt to save the companies already ruined credibility.

The Price Revealed
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Throughout the years, Saving Iceland has been pointing out that the common household on Iceland would end up paying the bill for the aluminium factories. The secrecy that shrouds the contracts between Landsvirkjun (the National Energy Company) and the aluminium companies shouts corruption and even more voices have been questioning the deals publicly and pressing on for those numbers to be revealed.

On the 9th of March, RUV (Icelandic National Broadcast Association) revealed a strictly confidential report the news channel has in their hands. The report, which was made for Norðurál (Century Aluminum) and foreign banks by the consulation office Hatch, shows the different costs of the industry, including the energy price.

That price of the KWh is bound to the price of each ton of aluminium, a 0.00000001% of the selling price. That means that while the price of aluminum was 1400$ a ton, Norðurál was paying 1,4 cents per KWh, making it the cheapest in Europe and leaving Landsvirkjun’s profit from the energy they sell to them dependant on the unstable aluminum price.
This price also means that Norðurál is paying a fourth of what aluminum companies in Europe are paying for their energy and on top of that, only a meager fifth of what the local population has to pay for their private energy usage.

Since the news came out, Landsvirkjun has announced they will be revealing their prices to the aluminium industry during the middle of next month.

Previously, Alain Belda, presdient of Alcoa, had revealed their energy bill in Iceland in a speech he held in Brazil. From figures he cited there people could calculate that it was the lowest energy price for an aluminium company anywhere in the world.

Keep checking this site for updates on these news.

Svandís Svavarsdóttir, Minister of Environment, recently declined land-use plans made by the parishes of Flóahreppur and Skeiða- and Gnúpverjahreppur at the request of Landsvirkjun (National Energy Company), which had also paid for the preperations to the changes in the plans. The minister declined the land-use plans on the grounds that according to Icelandic law, such plan changes are to be paid for by the communities themselves, and any third-party involvement in the costs is illegal.

Of course the governmental opposition parties and their usual gang of industrial lobbyists are furious over the ruling, and critisice it heavily, displaying reactions the environmental minister described as being similar to allergic reactions. Amongst other things they accuse her of hindering those who are trying to build up work in the energy and industry sectors and blocking the creation of new jobs in a country they claim is ravaged by unemployment (approximately 8,6% at last count).

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By Indriði H. Þorláksson – Economist

The economic effects of heavy industry must take into account both short and long term economic policies.

Statements put forth without reasoning sometimes obtain more significance than they merit. Two such statements that are held aloft about the building of energy plants and heavy industry are particularly dangerous.

On the one hand that they are necessary and that they might even be the way out of the crisis and on the other that the future of the Icelandic economic system is best insured by utilizing energy resources and with heavy industry. One looks to the short term and the other to the long term but both are questionable, probably wrong and even dangerous.

The economic impact of heavy industry must take into account both short and long term economic policies, In the short term, say 3-5 years the goal is to restart the economy. In the long term the goal is to promote growth in the economic system to provide citizens with the good things in life. To do so the economy has to provide the highest augmented value to the nation for its work, capital and resources.

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