Ávarp á ensku við verklok vegna stækkunar Norðuráls, 20.10.2001


Valgerður Sverrisdóttir
Minister of Industry and Commerce

on the completion of construction work on the Norðurál smelter expansion
and its full operation at a capacity of 90,000 tonnes

Distinguished guests, Ladies and Gentlemen

I would like to begin by congratulating everyone who has been involved in the expansion of the Norðurál smelter at Grundartangi from 60,000 to 90,000 tonnes per year, now that construction work is completed and the plant is fully operational at its new capacity. This is an important milestone for the Icelandic economy, because national exports can be expected to increase by almost 5 billion krónur per year besides other direct and indirect economic impacts that the expansion will generate. Increased production at the smelter therefore represents a considerable benefit for everyone in Iceland. The local impact will be even greater, however, because an estimated 50 extra jobs have been created at the company following its expansion.

Norðurál has declared an interest in expanding its capacity even further, by another 150,000 tonnes per year. If realized, this will bring annual production up to 240,000 tonnes, or 60,000 tonnes more than was envisaged under the original agreements. Talks have been in progress to discuss these plans. These have focused on two separate areas: talks by Norðurál with Landsvirkjun and other power companies on power supplies, and with the central government, local government authorities in this area and the Grundartangi Harbour Fund. I hope that these talks will produce positive results so that necessary preparations for further expansion of the smelter will be able to commence.

Certain power development projects and power-intensive industry projects have been the subject of considerable controversy. In many cases, the greatest critics of such projects are those who are most remotely affected by them. It is the duty of politicians to make their decisions – in this field like all others – on the basis of the interests of the nation as a whole. In making such decisions it is not enough to focus only on environmental issues. We also need to take economic and social factors into account.

People in Iceland can agree that our experience of Norðurál during its short time of operation has been very positive, and that the company has fully lived up to the expectations made of it. Initially, there were some concerns – especially here in Hvalfjörður – that the smelter's activities would have a negative environmental impact . The fact of the matter, however, is that in all cases the impacts have been significantly below the reference limits laid down in the smelter's operating licence. This is a particularly welcome outcome.

I wish I could say that demographic trends everywhere in Iceland have been as positive as they have been in this area in recent years. When construction work on the smelter at Grundartangi commenced, there was unemployment in the area north of Hvalfjörður. Now there is virtually no unemployment, the population has grown – and Akranes Football Club has even won the league championship again. There are doubtless various reasons for this positive trend, including improved communications after the construction of the Hvalfjörður road tunnel. The building of the aluminium smelter and expansion of the ferrosilicon plant have had widespread benefits for the entire local community. In my discussions with spokesmen for Norðurál, they have expressed their interest in seeing the area strengthen an even stronger community here which can offer the best possible conditions for company employees and their families to live in.

The central and local government authorities are involved in building up power-intensive industry in various ways. Over the years, the government has purchased land which is considered suitable for locating of power-intensive industrial ventures. Likewise, the government has been involved in development of harbours, roads and other infrastructure. In connection with the building of the Grundartangi aluminium smelter, for example, the state purchased land for such activities and leased part of the site to Norðurál. This has proved to be a favourable arrangement. However, I think we need to consider how we can keep development moving on in Grundartangi. There are very good facilities for industrial operations here, plenty of land, a harbour and good transport infrastructure. I think the community here ought to consider how to promote even further development of this area. In this context it would seem a natural step to examine the advantages of establishing an investment and development company in the Grundartangi area with the aim of boosting local activities.

Ladies and Gentlemen

It is the government's policy to promote further development of power-intensive industries in Iceland. Norðurál's development at Grundartangi is one result of that policy. The government hopes that the ideas the company has put forward for further expansion will be realized, and it will make efforts towards achieving such aims.

I would like to conclude by congratulating the company's management and employees on this milestone and hope that we will have occasion to celebrate more milestones of this kind in the future.

Valgerður Sverrisdóttir