A Grapevine service announcement Pay attention: Holuhraun, still spewing lava. Bárðarbunga, still sinking.
Mag
Articles
Magma Energy Lied to Us

Magma Energy Lied to Us

Published May 21, 2010

Let’s cut to the chase. The opacity of Icelandic business and politics has done the country, as a whole, no favours. Much hand shaking and back scratching has gone on behind closed doors and such secluded business environments have proved themselves to be breeding grounds for lies, corruption, fraud, swindling, and downright thievery.

With Icelandic bankers being held in local prisons and wanted by Interpol and the once celebrated “outvasion Vikings” having their pants sued off by the Americans, now is a time to usher in a new, honest era of business in Iceland in an effort to get the country and its economy back on track and to restore the trust of the mass populace in the system.

Enter geothermal corporation Magma Energy of Canada

In the summer of 2009 Magma Energy developed an interest in Icelandic energy company HS Orka. As we explained at length in our October 2009 issue, HS Orka was largely owned by FL Group, the investment company of one Jón Ásgeir Jóhanneson (the previously mentioned legally entwined outvader), the municipality of Reykjanesbær (an Independence Party stronghold and loyal donator of funds to the party) and a couple of other municipalities on the Reykjanes peninsula on which Keflavík airport sits.

At that time Magma Energy had created a shelf company in Sweden to skirt Icelandic laws forbidding non-EEA companies from owning any stake in the country’s natural resources and snatched up 43% of HS Orka in two separate transactions in July and October. Geysir Green Energy maintained 55.2% of the company and a couple of surrounding municipalities held on to less than 2%.

Lies, lies, lies, lies, lies, lies, lies

On September 16, 2009, Magma’s founder and CEO Ross Beaty was asked by the Grapevine to respond to the suspicions of some that his company was in Iceland to take advantage of the country’s economic turmoil. He told us “I would suggest that is ignorance and complete nonsense. It’s just because they don’t know what we’re all about and they don’t understand the world that we live in. We’re not in Iceland for any such reason. We’re in Iceland because it has opportunities for long-term benefit where we can deploy capital and we can improve the condition of an Icelandic company for the long term. We would be interested in Iceland under any circumstances, absolutely, even two years ago [in 2007] it would have been unchanged.”

Eight months later, on May 5, 2010, Ross Beaty told online investment newsletter Hera Research Monthly “We would have been farther along had [the global economic crisis] not happened, although we may not have had opportunities that we took advantage of. For example, going into Iceland was strictly something that could only have happened because Iceland had a calamitous financial meltdown in 2008.”

On September 16, 2009, we asked Ross Beaty if Magma had its eye on a majority stake in HS Orka, to which he replied “no, we do not plan on getting a majority. I have no interest in fighting Icelanders, particularly the government, over what is proper energy policy in the country. The government said they would accept Magma going to a 50.0 % interest so long as Icelandic interests had the other 50 %. So that’s neither minority or majority, it’s a rather awkward business position but certainly something that we feel can be workable and we certainly will be striving to achieve, but not increase beyond that. That’s something that we think should be acceptable to the Icelandic government and, we hope, the people of Iceland.”

The Grapevine followed that up by asking if Magma planned on making any further acquisitions in Iceland, to which he replied “No we don’t. No we don’t.”

Lies, lies, lies, lies, lies, lies, lies lieslieslieslieslieslieslies

On May 17, 2010, Magma Energy issued a press release stating the company is “pleased to announce that it has signed an agreement with Geysir Green Energy ehf (“GGE”) to purchase all of GGE’s stake in Iceland geothermal company HS Orka hf (“HS Orka”) resulting in Magma’s stake increasing to 98.53%.”

On May 19, 2010, the Grapevine called up Ross Beaty to ask him a couple of questions about the recent goings on and he rushed off the phone saying “I’m just going through a tunnel and I’m just about to jump onto an airplane.”
Are there tunnels on route to Keflavík now?

Iceland is in serious need of honesty and transparency. These massive deals that put private control of the country’s natural resources in the hands of foreign firms and are only made public knowledge as the i’s are being dotted and the t’s crossed will do nothing for restoring the faith of the Icelandic people in their politicians and businessmen. Neither will politicians crying foul after the fact.

It would be nice if politicians acted in the best interest of the electorate and businessmen actually worked transparently in the long-term interest of the economy. How about we all get started with just a little honesty?

Blame Canada? by Catharine Fulton (October 2009)
Björk Guðmundsdóttir Speaks Out About Magma Energy


Mag
Articles
<?php the_title(); ?>

Holuhraun Continues To Erupt

by

It’s been almost a month since the Holuhraun eruption started, and there doesn’t seem to be any indication of it stopping soon. Meanwhile, the Bárðarbunga caldera continues to subside, which means that it must still be feeding magma to the Holuhraun eruptive fissure. The surrounding area is still closed to the public (sorry!) due to high concentrations of poison gas and the continuing risk of flooding. In the last two weeks there has been quite a bit of air pollution (mostly sulphur dioxide, the one that smells like rotten eggs) due to gas emanating from the eruptive fissure. Daily forecasts

Mag
Articles
<?php the_title(); ?>

Which Way 
The Wind Blows

by

“This is what we call a ‘washing board,’” our guide Kormákur Hermannsson says, his voice barely intelligible as we jostle violently on the bumpy mountain road. Indeed it feels like we are driving over one. It’s been nine hours since we set off from Reykjavík to see the Holuhraun eruption in Iceland’s remote highlands, and we are shaking. To our right, the sun is a blinding red ball peeking out from behind the clouds. Mount Herðubreið looms over an orange haze that blankets the horizon. We are still a few hours away from the eruption, yet its presence is unmistakeable.

Mag
Articles
<?php the_title(); ?>

One Man’s Miracle

by

Möðrudalur, one of the most isolated farms in Iceland, lies under the icy nipple of Mt. Herðubreið in the northeastern part of the island.  In 1919, a man named Jón Stefánsson bought Möðrudalur from one of his brothers.  Jón was a saddler and harness maker by trade. He was also an accomplished musician. At night he’d sit at his organ, and the echo of Bach sonatas, which he’d play backwards note for note, would sweep over Möðrudalur’s lava and empty sands. Jón was, to put it mildly, an eccentric. He’d wake up at 4am and get the farm labourers working

Mag
Articles
<?php the_title(); ?>

Mexicans: They’re Everywhere!

by

When I began my search for Mexicans in Iceland, I was prepared to hear fantastic stories about cultural polarity. And that’s exactly what I got. From tiny Vopnafjörður we travel to the centre of it all, Reykjavík. This is the story of Rodrigo Aparicio, who found a second home in Iceland. What does “exotic” mean? For many, Mexico—with its countless ecosystems, dialects, blue shores, sandy beaches, archaeological sites and colonial cities—fits the bill perfectly. To Mexicans, “exotic” is perhaps the type of place where you’ll experience midnight sun and the Northern Lights, where folks aren’t coy about the human body,

Mag
Articles
<?php the_title(); ?>

Höfði-San: Shrimp Salesman Built A Replica Of A Reykjavík Landmark

by

Iceland became the focus of world attention when US President Ronald Reagan and Soviet leader Mikhail Gorbachev met in Reykjavík in October 1986 to discuss nuclear disarmament. The powerful couple met at Höfði, a small villa on Borgartún, the street where the ghosts of the fallen Icelandic banking system roam today. Many of the banks had headquarters and offices on this street, which lies only a kilometre or so away from the city centre. Before the international financial crisis obliterated the overweight Icelandic finance industry, the bankers wanted to build huge towers and other mega structures in the area, which

Mag
Articles
<?php the_title(); ?>

Independence Is Not A Disaster:

by

After decades of discussion on the political and economic details of a theoretically independent Scotland, the Scottish citizens finally face the vote that could bring this country into reality. The vote on the Scottish Independence Referendum Bill, asking “Should Scotland be an independent country?” will take place this Thursday, September 18, 2014. “We have a shared interest” As part of the discourse on their potential independence, Scottish political leaders are looking to the Nordic countries as models in developing their social and economic policies. In addition to potentially modelling welfare and taxation on Nordic systems, other involvement ranges from applying

Show Me More!