Saving Iceland

The men who made Iceland go cap in hand to the IMF are now bent on ruining its landscape

Björk, The Times – After touring for 18 months I was excited to return home a few weeks ago to good, solid Iceland and enjoy a little bit of stability. I had done a concert there earlier this year to raise awareness about local environmental issues and 10 per cent of the nation came to it; but I still felt it wasn’t enough.
So when I returned I decided to contact people all over the island who had attempted to start new companies and bring in new greener ways of working but had not succeeded. For a long time Iceland’s main income was fishing, but when that become uneconomic people started looking for other ways to earn a living. The ruling conservatives thought that harnessing Iceland’s natural energy and selling it to huge companies such as Alcoa and Rio Tinto would solve the problem.
Now we have three aluminium smelters, which are the biggest in Europe; and in the space of the next three years they want to build two more. The smelters would need energy from a handful of new geothermal power plants and the building of dams that would damage pristine wilderness, hot springs and lava fields. To take this much energy from geothermal fields is not sustainable. Read More

A number of protests have been taking place in Reykjavik, Akureyri and Seydisfjördur where several thousands of people attended and demanded action taken banks and that the prime minister and directors of the central bank would resign. Landsbanki flags were burned at one of the demonstrations on Saturday. Some protestors carried black and green and black and red flags and called slogans such as ‘Burn the banks’.

[kml_flashembed movie="http://www.youtube.com/v/QUggaKTWlb0" width="249" height="212" wmode="transparent" /]

Jaap Krater, Morgunblaðið, 26-10-2008

In times of economic crisis, it is tempting to embrace new megaprojects such as new power plants and aluminium smelters. But will this realistically improve Iceland’s economic prospects?

Prime minister Geir Haarde recently explained on Stöd 2’s chat show Mannamál that one of the main reasons for the fall of the Krona, was due to the execution of heavy industry projects: the construction of Kárahnjúkar and Alcoa’s smelter in Reyðarfjörður. If more large projects are executed, what will the cost be for the Icelandic taxpayer?

Haarde’s comments were not surprising. Before construction of Kárahnjúkar many economists predicted the negative impact on inflation, foreign debt and the exchange rate of the ISK.

Of course there is some economic benefit from new smelters, but “it is probably outweighed by the developments’ indirect impact on demand, inflation, interest rates and the ISK exchange rate,” stated a report by Glitnir in 2006 on the impact of aluminium expansion in Iceland. The report expected an increase in inflation and a depreciation of the ISK.

“Kárahnjúkar will never make a profit, and the Icelandic taxpayer may well end up subsidising Alcoa,” said the eminent economist Thorsteinn Siglaugsson after publishing another report on the profitability of the Alcoa dam in East Iceland before construction commenced. Read More

Andri Snær Magnason, Fréttablaðið – In these turbulent times interested parties use the opportunity to offer us “solutions” and relief. This time around it involves “alleviating all restrictions” and putting public energy companies up as 300 – 400 milliard collateral for two to three new aluminium plants. This is what is on the drawing board when the total debt of OR and LV (the central public energy institutions) are already at a dizzying 550 milliards – mostly because of Alcoa and Norðurál (Century Aluminum). This is why the banks always preached large-scale industry policies – more debt – more joy. It’s down to the price of aluminium to repay these loans, but aluminium prices are plummeting and a level of overproduction has already been reached. The nation believes that the magic term EXPORT EARNINGS is money that will end up in the nation’s pocket. News of export earnings and foreign currency receipts have time and again been directly false and treacherous. A bar chart published in the Morgunblaðið newspaper the 11th of October depicts the aluminium industry as more important than the fishing industry and considerably larger than the tourism industry. But the presentation is exactly as the INTERESTED PARTIES would like to have it portrayed in the media. When Alcoa Fjarðaál claims to export for 70 milliards a year, most Icelanders believe that this is currency that we can use. Read More

The Saving Iceland gathering will take place during the weekend of November, 7th – 9th, in Ghent in Belgium. Every activist who was involved in the Saving Iceland Campaign in the past, and everybody who wants to join the campaign in the future is welcome. For practical reasons we need to know how many people will come. So subscription is necessary. Let us know by sending an email to savingicelandinfo@gmail.com. Ask by mail for more information about the exact location and the timetable.

INDIA – Unfazed by the global economic slowdown, international mining behemoth Rio Tinto is seeking to develop bauxite mines as a prelude to investing about $2.2 billion for a greenfield alumina refinery and 250.000 tonne smelter plant in India, its top official in the country said.
“We are interested in getting bauxite mines which may enable us to further the process of setting up the alumina refinery and smelter plant,” Rio Tinto’s India Managing Director Nik Senapati said while unfurling his company’s plans in the country. The London-listed company is believed to be the world’s biggest producer of alumina and aluminium. Read More

CONAKRY, GUINEA – At least one person was killed when police in Guinea cleared protesters from a railway carrying bauxite for Russian aluminium company RUSAL, police and industry sources said on Friday the 10th of October. RUSAL, after it’s merger with Glencore, is the largest owner of Century Aluminum, which owns the Grundartangi smelter in Iceland and has been preparing to construct a new smelter at Helguvik, south of Reykjavik. The trains, which have been blocked for five days, had still not restarted, the sources added. Read More

INDIA – Farmers in Hirakud, Orissa are protesting against the Hindalco aluminium smelter plant for emitting poisonous gas, which has damaged their paddy crops spread across 113 acres of land. They have also demanded immediate compensation from the factory management. In an early morning in September farmers in Nuagujatal and Gundurupada village near Hindalco aluminium smelter plant in Hirakud NAC of Sambalpur district, found that their paddy crops had turned from green to yellow. They were surprised to see the change happening so quickly, overnight, and when they looked around similar symptoms were noticed in the trees.
The yellowing had been a regular phenomenon in the area, which occurs every year. This time the factory had released noxious emission, mostly fluoride wastes, when there was a heavy downpour. With the rain water the fumes became toxic rain and damaged the crop, allege agricultural scientists. Read More

“They are saying in the paper every day, let’s throw up these aluminium smelters because of the economic crisis. This is a bad idea because in a way building smelters is part of the economic crisis. These huge loans that companies take is too big a chunk for the Icelandic economy to pay. We are on an economic roller coaster ride right now,” said Björk in a recent interview with ITN news. Read More

Century Aluminum announced in a statement it is reconsidering the planned smelter in Helguvík. It said it has stopped making any new capital commitments due to the global financial crisis.

“In the current environment, we have ceased making any new capital commitments and are reducing project spending. We believe the potential exists for a prudent way forward over time, but will soberly evaluate the feasibility of all elements of the project during the near term,” (1) said Logan Kruger, Century’s CEO.

While Century Aluminum’s revenue for the third quarter of 2008 rose due to an increase in aluminium shipments (2), prospects were deemed less rosy. Merrill Lynch downgraded Century Aluminum’s investment rating to ‘underperform’. It said aluminium pricing is weak, inventories of the metal are high and there are little catalysts to drive the price up.

“Some might think this is bad news for Iceland and that a new smelter could help with the economic crisis. But when we looked at what happened with Alcoa Fjardaal and Karahnjukar, a cancellation of Helguvik may be a blessing in disguise,” says Saving Iceland’s Jaap Krater. Read More