The Aluminum Project in Figures
The scale of the aluminum project is enormous. This is reflected both by the project's physical size and the time required to develop it before reaching a final decision. A large amount of effort and time goes into preparing the analyses that contribute to the aluminium project's development. These analyses will provide us with an accurate picture of the scope of the project in terms of scheduling issues, figures and quantities. The following is an overview of the project's key figures as of the spring of 2010.
Project key figures
Construction phase – hydro power | Approx. 5 years |
Construction phase – transmission network and furnace | Approx. 2-3 years |
Annual aluminum production | Approx. 400,000 tons |
Direct employment during the construction phase | Approx. 2,600 persons |
Employment in connection to structural investment and services during the construction phase | Approx. 500 persons |
Employment at the aluminum plant and hydro power plant during the operational phase (including apprentices) | 650 persons |
Other employment during the operational phase | 500 - 600 persons |
Number of hydro power plants | 2 |
Total installed hydro power plant capacity | Over 650 MW |
Annual electricity production | Over 5.5 billion kWh |
Total length of power transmission cabling | Over 240 km |
Total estimated plant cost (hydro power plants, transmission network and aluminum plant) | Approx. 20 billion DKK |
Total estimated structural investment (Harbour, roads, accommodation etc. in Maniitsoq) | Approx. 2.3 billion DKK |
Detailed aluminum project construction cost estimates and engineering calculations are not publicly available. This is because such information is owned jointly by both project partners: Alcoa and the Greenland Self Rule Government. All other project information is available for download here: www.aluminium.gl, or from the Greenland Government website on strategic environmental assessment (SEA) www.smv.gl. You are also welcome to contact us at info [at] gd [dot] gl should you require further information.
Why do the figures change?
As analyses of the project become more detailed a more accurate picture emerges (see the figure below detailing the project's overall phases – the Memorandum of Understanding (MoU) phases). As results become available, figures can be adjusted and are thereby rendered more precise. At the same time, it should be borne in mind that several significant studies have yet to be completed, and that calculations and estimates are incomplete, although the margin of error is significantly narrower than previously.
Figure 1: The projects phases (the MoU phases):
An example of a key figure is the total estimated cost – a figure which is crucial to an assessment of whether the project is financially viable. The total estimated cost is based on a variety of inputs from surveys and analyses and the conditions under which the project will operate. A number of these conditions have changed since the first estimate of the total cost of the project, contained in the following report: Energy Intensive Industry in Greenland dated April 2007:
- The project has gone from a 3 hydro power plant model to a 2 plant model
- Fewer construction personnel will be required (2600 not over 5000)
- We now know far more about the hydrological and geological conditions that the hydro power plants will operate under
- In 2007 it was anticipated that the aluminum furnace would produce 340,000 tons of metal a year. It is now estimated (2010) that the plant will be able to produce up to 400,000 tons a year.
These are just some of the factors which have changed and which have led to an adjustment of the figures involved.
It should be noted that even though the figures change and are associated with a degree of uncertainty they are still of use for planning purposes.
For cost estimates for large scale projects a system exists whereby estimates are given a value indicating the degree of certainty attached to them (see figure 2 below). This can be of help in indicating how far project planning has progressed and how seriously the cost estimate should be taken. In this way there exists a relation between the precision of the cost estimate and the degree of detail possible in decisions based on these figures.
The classification system was devised by AACE International, an umbrella organisation for persons and companies working in the fields of cost estimates and cost scheduling. The cost estimate in the 2008 decision basis report is, as an example, a class 5 estimate. Before an ownership decision can be reached cost estimates have to reach the class 4 level and for project tenders to be issued costs need to be specified to the class 3 level. A variety of factors including the cost estimate methodology and the degree of project definition determine the class of the figures. The aluminium project follows this system with some adjustments.
Link to AACE International’s website: http://www.aacei.org/
Figure 2: The classification system
Read more about the classification system in this English-language document. (Download) 