Saving Iceland

By Ben Holland, Bloomberg

It was the week before Christmas in Reykjavik, and all through the town Eva Hauksdottir led a band of 60 whistle-blowing, pan-banging, shouting demonstrators. “Pay your own debts,” they yelled as they visited one bank office after another in Iceland’s capital. “Don’t make the children pay.”
When she isn’t leading one of the almost daily acts of protest in this land devastated by the global financial meltdown, Hauksdottir sells good luck charms made from the claws of ptarmigans, a local bird, and voodoo dolls in the form of bankers. She says she expects to lose her home, worth less than when she bought it two years ago, after the amount she owes jumped more than 20 percent. Read More

The construction of Búðarháls Dam (Búðarhálsvirkjun) in Tungnaá river, will probably be further delayed due to the uncertain future of Landsvirkjun´s financial possibilities. Landsvirkjun is Iceland’s national energy company. The construction was originally supposed to start early next year, after being delayed since 2003. The estimated cost is 25 billion Icelandic krónur.

Because of the collapse of the Icelandic banks and the international financial crisis, most possibilities for foreign loans are now frozen. Landsvirkjun’s long time financement is therefore quite uncertain.

“This mostly impacts new constructions, like Búðarhálsvirkjun” says Þorsteinn Hilmarsson, Landsvirkjun’s PR manager. “It is necessary to insure the future financement before the construction starts.  ”

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Bloomberg – Iceland’s planned economic recovery, based on raising exports of aluminum, may take longer to achieve than the government expects as the global slowdown forces down commodity prices, Fitch Ratings said.

The island is relying on aluminum sales, which have overtaken marine exports as its biggest export, to pull it out of the worst recession in more than half a century. The metal made up about 40 percent of total exports in the first 10 months, compared with 27 percent a year earlier, according to the statistics agency. Still, increased reliance on aluminum comes at a bad time as prices have slumped more than 30 percent since the start of the year.

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Rio Tinto Alcan has taken back it’s plan to enlarge it’s aluminium smelter in Straumsvík, Hafnarfjörður, according to the Icelandic newspaper Fréttablaðið. Alcoa’s planned smelter construction in Bakki (north-Iceland) will also be delayed for the next years. Landsvirkjun (national energy company) and Þeistareykir hf. have agreed to discuss with other interested buyers of geothermal energy in the north of Iceland.

Last Wednesday, Jacynthe Côté, Rio Tinto Alcan’s director, told Össur Skarphéðinsson, the minister of industry, that the company’s planned 40 thousand ton enlargement in Straumsvík would not take place. The enlargement was planned to take place in 2009, inside the company’s already declaired zone. The smelter’s production capacity would have raised from 185 thousand tons to 225 thousand tons.

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Aftaka.org – Since early this winter, Iceland has been facing economic crisis. The three major business banks have been nationalized, putting their dept on the people’s shoulders. People have been losing their livelong savings, loans have increased and are getting sky high (and for sure they already were high enough). 200 people lost their job, every single day of November and more and more people are facing the threat of losing their houses. Read more on Aftaka.org.