Alcoa cancels smelter plans in north Iceland

Alcoa has confirmed that it is no longer interested in building a new aluminium smelter near the northern Icelandic town of Husavik.

The American giant formally cancelled its interest in a letter to Husavik councillors yesterday, reports.

The president of Alcoa in Iceland says that the Landsvirkjun power company could neither offer enough electricity for the project or at a low enough price compared to neighbouring countries like the USA, Canada and Norway.

Alcoa already runs a large smelter in eastern Iceland and it fell to the company’s head in Iceland, Tomas Mar Sigurdsson, to withdraw the company’s interest at a meeting with four municipalities’ councillors in Husavik yesterday afternoon.

Sigurdsson told that he does not agree with those who say the proposed smelter had always been too big a project for the region to sustain, otherwise Alcoa would not have taken the idea so far since 2005, he said. The decision is, however, final now that it has been made.

There is enough energy in the area for heavy industry and Landsvirkjun has already signed declarations of intent with several companies. The trouble is that they cannot sell the same electricity twice, Sigurdsson says.

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