Alcoa has officially scrapped plans to build a proposed aluminium smelter near Húsavík, citing a lack of will on behalf of different parties to complete the project.
The decision does not exactly come as a surprise – as recently as last January, unnamed sources told business newspaper Viðskiptablaðið that the company was planning to walk away, for a number of reasons.
First, Minister for the Environment Svandís Svavarsdóttir has been an outspoken opponent of the plan. Second, a damning assessment was released by the Icelandic National Planning Agency, which 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.
Moreover, it came to light that a company called Carbon Recycling – which converts CO2 into methanol – had been in talks with national power company Landsvirkjun to operate in the same area – which, if it were to happen, would mean there could be no smelter anyway, as the energy requirements for both would be too great for the region.
Tómas Sigurðsson, the director of Alcoa in Iceland, reiterated the sentiments of Viðskiptablaðið’s unnamed sources, saying that while Landsvirkjun has made statements of willingness to supply power to other sources, neither Landsvirkjun nor the government has done so for Alcoa.
In fact, Landsvirkjun did make a statement of willingness in 2005 to supply power to Alcoa. However, this statement expired in 2008. A request for an extension was denied by the government.
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