Alcoa's representatives; B. Michael Baltzell and Alain J.P. Belda, and the Minister of Industry and Commerce; Valgerdur Sverrisdóttir, sign the contracts.

Alcoa Inc., the world’s leading producer of aluminium, has finalized agreements with the Government of Iceland and Landsvirkjun (the National Power Company) to build the 322,000-metric-tonnes-per- year Fjardaal aluminium facility in Reydarfjördur, Eastern Iceland. The facility will be designed as the most environmentally friendly aluminium production facility in the world. The cost of the Fjardaal aluminium facility will be approximately $1.1 billion over the next four years. The agreements were signed at a festive reception in the town of Reydarfjördur. The Minister of Industry and Commerce, Valgerdur Sverrisdóttir, and Minister of Finance, Geir H. Haarde, signed the agreements on behalf of the Icelandic government, and Chairman and CEO Alain J.P. Belda and B. Michael Baltzell, Director of Alcoa in Iceland and President – Primary Development, on behalf of Alcoa.

Production scheduled in 2007
Construction of the aluminium plant will begin in 2005 and it is scheduled to start production in early 2007. The aluminium project will create 750 new jobs, thereof 300 positions in related industries. These new jobs will help strengthen and diversify the economy of East Iceland which has experienced declining employment and out-migration as traditional jobs in fisheries and farming have declined. GDP will increase by 1% and export by 10-14% when production has started.

Karahnjukar power station
Karahnjukar power station, which is being constructed by Landsvirkjun, will supply Fjardaal with electricity for the next 20-40 years. The hydropower station will have an installed capacity of 630 MW and estimated construction cost is $1.2 billion.

“We look forward to working closely with the Icelanders for years to come”
Alain Belda, Chairman and CEO of Alcoa Inc. is pleased with the speed of work Alcoa has experienced during the process of deciding about taking their smelter to Iceland and feels that setting up in Iceland will prove beneficial. “Negotiations have proceeded quickly and well, and the present agreements will be profitable for each of the parties to the contracts. The energy and the positivity which have characterized the process of negotiations have proved inspiring for Alcoans; therefore, we look forward to working closely with the Icelanders for years to come.” 

“Fjardaal will make use of the cleanest energy that is to be had”

Alain Belda

Mr. Belda explained in his speech during the signing on the new Alcoa smelter, Fjardaal, that this facility will be a vital part of the company’s mission for the environment. “The new aluminium plant of the company here in Reydarfjördur will contribute to the fight against the emission of greenhouse gases. Every year, the world's need for aluminium rises by 900,000 tonnes. The greater part of this aluminium is produced in aluminium plants which depend on coal or oil. That involves a tremendous release of greenhouse gases, butbut that is not how it will be at Fjardaal. Fjardaal will make use of the cleanest energy that is to be had, so that Iceland's contribution will be invaluable in combatting greenhouse gas-emissions,” said the CEO.

Alcoa in Iceland