Iceland Chooses Smelter, Hydro Project over Park

REYKJAVIK, Iceland, July 23, 2002 (ENS) - The world's largest aluminum company, Alcoa Inc., the government of Iceland, and Landsvirkjun, Iceland's national power company have signed a deal to build a large aluminium smelter and hydropower development in eastern Iceland. The pact, signed Friday, drew immediate condemation from WWF, the conservation organization.

Icelandic Prime Minister David Oddsson
(Photo courtesy Office of the Prime Minister)

Alcoa says that when completed, the project will represent one of the largest private sector investments in Iceland's history and "one of the cleanest aluminum production facilities in the world."

This "sustainable development project" is designed to create hundreds of new, permanent jobs in eastern Iceland helping to put the economy there on a more solid foundation, Alcoa said in a statement. "A stronger economy in the region will allow for improvements in transportation, education, healthcare and culture."

Dimmugljufur canyon in eastern Iceland (Photo courtesy Halendi)

WWF criticised the Icelandic government for ignoring strong support for a national park in the Eastern Highlands. Samantha Smith, director of WWF's International Arctic Program, said, "A new Gallup poll in Iceland shows that 65 percent of Icelanders want a national park in the Eastern Highlands, which includes the area the project will destroy. But the government seems determined to build this project before it will seriously consider the different options for a park."

"If the project stays on its fast track, some of the most valuable areas will be destroyed before a national park is in place," said Smith.

Alcoa says Landsvirkjun will begin development of a 500-megawatt hydropower facility in eastern Iceland, and Alcoa will complete environmental and engineering studies of the smelter near Reydarfjordur in eastern Iceland.

The deal also encompasses a harbor facility at Mjoeyri and related infrastructure development.

Icelandic waterfall (Photo courtesy Robert Loney)

The national park that the alliance is proposing in the Eastern Highlands would be bordered by the Vatnajökull glacier in the south, the Vonaskard canyon in the west, the Lonsoderaefi highland plains to the east, and the National Lands boundary to the north.

WWF is offering to commission an initial study for the national park, including detailed boundary planning, protected area categorization, and implementation planning.

The study would also look at eco-tourism, research and other low impact activities in the area as alternative income sources for local communities, and provide an analysis of the political and formal steps necessary to implement such a comprehensive protected area plan for Iceland.

Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets.

As the construction process continues, Alcoa said, it will "work to meet the company's high standards for sustainable development."

But the conservation organization says Alcoa has already violated its own princples. Smith said, "Alcoa is ignoring its own principles of environmental integrity."