The project
Alcoa has signed an agreement with the government of Iceland and Landsvirkjun, Iceland’s national power company, to construct a low-emission aluminum facility on the eastern coast of Iceland. Fjarðaál, which means “aluminum of the fjords", will be built near Reydarfjordur, a town set in Reydarfjord, and will have an annual production capacity of 322,000 metric tons per year. Fjarðaál will be the first new primary aluminum facility Alcoa has constructed in 20 years.
Under the agreement, Landsvirkjun will build Karahnjukar, a 630-megawatt hydropower station, and Alcoa will begin conducting environmental and engineering studies of the aluminum facility. The Fjardabyggd Harbor Fund will establish a harbor facility at Mjoeyri to serve Fjarðaál, and roads and other infrastructure in the area will be improved as well. The project represents one of the largest private-sector investments in Iceland's history.
Fjarðaál is being designed to be the most environmentally friendly aluminum production facility in the world. It will directly employ around 450 people, create many more jobs in supporting industries and service organizations, and help put the economy in eastern Iceland on a more secure foundation. A stronger economy will allow for improvements in transportation, education, healthcare, environmental management and quality of life.
The Alcoa facility will incorporate knowledge and technology developed over the past 20 years to promote sustainability and minimize environmental impact.
Environmental and social considerations
From a clean, renewable energy perspective the project itself offers an extremely efficient generating system, requiring only a relatively small reservoir to generate significant amount of electricity. Using hydropower rather than fossil fuels will significantly reduce the carbon dioxide emissions associated with the project, and will help Alcoa meet its stringent greenhouse gas emission targets
Any new development causes change to the environment, and the challenges presented when building a new primary aluminum facility anywhere should not be understated. Alcoa is taking Iceland's unique environmental challenges very seriously. We have conducted extensive environmental studies to ensure that our project will have minimal effect on Iceland’s natural habitat.
The Fjarðaál aluminum facility will also operate using hydroelectric power, a clean, renewable energy source, which will be supplied by the Karahnjukar power station. The project offers an extremely efficient generating system, requiring only a relatively small reservoir to generate significant amount of electricity. Using hydropower rather than fossil fuels will significantly reduce the carbon dioxide emissions associated with the project, and will help Alcoa meet its stringent greenhouse gas emission targets.
According to The Environmental Impact Assessment, the most comprehensive in Iceland's history, the ecosystem in the glacial highlands near the Karahnjukar power station can be protected as well.
The project will involve no relocation of people, no impact on endangered species, no danger to commercial fisheries, and no denial of access by tourists and naturalists to the affected area. The reindeer, bird and seal populations will not be significantly affected, and certainly not endangered. The introduced reindeer herd, for example, down to just 100 animals 50 years ago, now stands at over 3000 and is controlled by hunting.
Alcoa supports the initiative of the government and local authorities to establish a plan for managing multiple land use within these highlands so that future generations can continue to benefit from the conservation and commercial values which exist there.
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Environmental Impact Assessment
Download the pdf of the original Environmental Impact Assessment prepared in 2001 for the proposed 420,000 Norsk Hydro smelter project at Reydarfjordur.
 download PDF (854 k)
Comparison Report Prepared by Alcoa
Submitted November 22 to the State Planning Agency. Download the report in pdf format.
download PDF (2.45 mb)
Environmental Operating Permit (Final)
Read the full approved text.
download pdf (1.32 mb)
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