Operational phase for the Fjardaál aluminum smelter
The operational phase for an aluminum smelter can be very long. The most important prerequisite for its longevity is the availability of competitively-priced energy. In very general terms, it can be said that smelters that are able to purchase energy at globally competitive prices are able to enjoy a longer service life than smelters that pay high energy prices. If the price of energy is attractive, an aluminum producer will have the incentive to maintain production at the location concerned and also reinvest and implement a programme of upgrades to the smelter. Currently there are thus a number of smelters that have remained at the same site for around 100 years and are still producing aluminum. These include Hydro’s Høyanger smelter (built in 1918) in Norway and Alcoa’s Massena, New York smelter (built in 1903) in the USA. It also means that local businesses have the chance to accumulate expertise in the industry over a longer period of time, thus benefitting both the smelter and the local community.
The aluminum industry has existed in Iceland since 1969. Since that time, the industry has grown through the construction of additional smelters and the enlargement of existing plants. Today there are three aluminum works which produce a total of 830.000 tonnes per year (2011). This is a considerable increase from a level of around 100.000 tonnes in 1986. Further production increases are under planning, in addition to the construction of a single new aluminum smelter. However, this growth is dependent on whether it continues to enjoy political priority in Iceland and whether sufficient, competitively-priced energy can be secured. At the same time, improved energy efficiency also contributes to increased production and employment. The importance of the aluminum industry for Iceland has increased and the net value of export from the aluminum industry in 2010 was estimated by Samál (the interest organisation for aluminum producers in Iceland) to be around DKK 5.5 billion. The aluminum industry has thus developed into one of the three most important businesses in Iceland – alongside fishing and tourism. Samál states that today there are 1,800 people directly employed in the aluminum industry, which in turn generates approximately 5,000 jobs in the country.