Reykjavík City Council approved the sale of 32 percent of Reykjanes-based geothermal energy plant HS Orka to Canadian-come-Swedish company Magma Energy on September 16th in front of a group of protestors, who grew more rowdy as the meeting went on.
Earlier this summer Magma Energy, the latest venture of long-time mining industry hotshot Ross Beaty, acquired an 11% share in HS Orka from Geysir Green Energy. Beaty’s Magma is now the proud owner of 42 % of HS Orka, along with exclusive rights to the geothermal fields of Reykjanes for up to 130 years.
For perspective, note that in 130 years, everyone currently living on Earth – and a lot of folks that haven’t been born yet – will be dead.
In an interview with the Grapevine, Beaty explained his foray into geothermal energy. “I’m an entrepreneur so I’ve started many companies, and this time around I wanted to build something green. I looked at geothermal and it just fit.” The self-proclaimed environmentalist shakes off accusations of hypocrisy for spending the past 35 years in mining – arguably the most destructive industry on the planet – chalking up such beliefs to the bias and “ignorance” of the public.
Another accusation that Beaty chalks up to ignorance is the distrust of the Icelandic people for deals that see the nation’s resources in the hands of foreign firms. “I would suggest that is ignorance and complete nonsense,” asserted Beaty when asked his thoughts on Magma being thought of as an opportunist, taking advantage of the weakened Icelandic economy. “It’s just because Icelanders don’t know what we’re all about, and they don’t understand the world that we live in.”
The sale of a portion of Reykjavík Energy’s share in HS Orka was put forth as a wise business move by Reykjavík’s mayor Hanna Birna Kristjánsdóttir, saying “the only responsible option for the City of Reykjavík was to approve the sale of OR’s shares in HS Orka to Magma Energy Sweden AB.”
Others on the city council and members of Alþingi have spoken out against the deal, however, expressing concerns for this landmark agreement opening the doors for more foreign purchases and rampant privatization of valuable natural resources. Social Democratic MP Ólína Þorvarðardóttir told the Grapevine “I am deeply worried that this sale has opened the floodgates for huge foreign companies to rush in to get a similar ‘bargain.’ Even though we are just talking here about the utilisation right of the resources, we have to keep in mind that the profit of the resource depends on the utilisation right. What’s the use of having ownership of a resource if you don‘t have the right to profit from it?”
More information on Magma Energy, their purchase of HS Orka and the potential for continued privatisation of Iceland’s resources will be available in the October 9th issue of the Grapevine.