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”

The expansion of the Nordural aluminium smelter at Grundartangi is expected to start within the next six months. Nordural, owned by the U.S. company Columbia Ventures Corporation, began operation of a 60,000- tonne- per- year smelter at Grundartangi in June 1998. In July 2001, the production capacity was increased to 90,000- tonnes- per- year and another expansion will take place over the next three years, increasing the production capacity to 180,000 ton per year. Currently, there are 200 employees working at the Nordural smelter, and the expansion is expected to create up to 150 new jobs.

Shell Hydrogen has opened the first hydrogen station under its brand in Reykjavík, Iceland. The station will be used to refuel three DaimlerChrysler fuel- cell buses that will be operated commercially on the streets of Reykjavík by Strætó bs., the local bus company. Private hydrogen vehicles are expected to travel the streets of Iceland in the future. Icelandic authorities have already issued all necessary permits for the station to operate on a commercial basis. The Icelandic government is promoting utilization of renewable energy resources in harmony with the environment, such as hydrogen as a fuel. All of Iceland’s electricity is already generated renewably from hydroelectric and geothermal sources. Norsk Hydro supplied the machinery for the station to produce hydrogen from water by electrolysis. Shell Hydrogen and Norsk Hydro are partners in Icelandic New Energy Ltd, a company established in 1999 to pursue this vision. The hydrogen station is a part of ECTOS (ecological city transport system), a project supported by the European Union to research the socio-economic and environmental implications of changing the energy base of a modern society.