International Conference and Workshop on Anode Rodding Plants for Primary Aluminium Smelters, Reykjavik, Sept. 21, 2005.
Mr Chairman, Ladies and Gentlemen!
It is a great pleasure for me as Minister of Industry and Commerce to welcome you all to the International Conference and Workshop on Anode Rodding Plants for Primary Aluminium Smelters, which takes place here in Reykjavík for the third time. After the successful second conference with 145 delegates from 20 countries two years ago, and judged by the number of attendants today, it seems to me that this conference has grown to be a regular event, and I congratulate the organising committee to this success
When I stood here addressing the second conference in September 2003, we could only anticipate the enormous upswing in the Icelandic economy now taking place as a result of new primary aluminium development and expansions of existing smelters. Let me therefore give you a brief overview of the situation
I am not sure whether all of you are aware of the unique power situation in Iceland. Its geographic location in the middle of the North Atlantic Ocean with large annual precipitation, glaciers and rivers provides abundance of hydropower potential. Being located on the crest of the Atlantic tectonic rift zone, Iceland has also access to vast geothermal energy resources, which we have learned to harness to our advantage. Both resources are environmentally clean and renewable and therefore very attractive for power intensive industry in order to reduce the greenhouse gas emission often attached to the power production in other countries.
Iceland is an island with isolated power system without linkage to outside power markets. Two third part of the total energy consumption comes from our indigenous and renewable power resources. 90% of the population heats up their houses with geothermal hot water and almost everyone has access to electricity from the grid. 65% of the total electricity generation goes to power intensive industry. One third part of the energy consumption is based on fossil fuel, mainly used in the transport sector and the fishing fleet.
For almost 40 years primary aluminium industry has played a major role in the economic development of Iceland. The first aluminium reduction plant, ISAL, was commissioned in 1969 – as a result of an agreement between the Icelandic Government and Alusuisse of Switzerland. The plant is now owned by Alcan of Canada. A second aluminium plant, Norðurál, built by Columbia Ventures in 1998 is now owned by Century Aluminum of USA. Today the aluminium industry in Iceland produces some 270.000 metric tonnes of primary aluminium in two plants. Together with Icelandic Alloys, which produces annually 120.000 metric tonnes of ferro-silicon, the energy intensive industry uses annually about 5.500 Gigawatthours of electricity.
Alcoa is building a large greenfield aluminium plant, Fjarðaál, in East Iceland which is scheduled to start production with 322.000 metric tonnes annually in 2007. Norðurál is expanding the plant at Grundartangi by 170.000 metric tonnes partly in 2006 and again early 2009. By the end of the decade we will see the primary aluminium production increase to 760.000 metric tonnes annually, using a total of 11.500 Gigawatthours of electricity annually. Energy intensive industry will at that time consume about 80% of the total annual electricity generation.
Other projects considered for the next decade may include an Anode Plant with 340.000 tonnes of annual production, expansion of the Alcan smelter at Straumsvík, as well as possible greenfield aluminium plants in Northern and South-western part of the country
The increasing electricity demand is a challenge for the power companies. A number of new power plants and expansions of existing plants are under construction in order to meet the needs of the power market. Close to 1000 Megawatts of new power will be installed until 2009. The largest one being the Kárahnjúkar hydroelectric power project in East Iceland with 690 MW power installation. The remaining 310 MW will be harnessed from geothermal fields near Reykjavík.
As a result of the development in the energy intensive industry we see spin-off industry growing independently, providing various services to the existing aluminium industry. For instance, according to information from Alcan in Iceland, the company bought various services, goods and spare parts from local companies for 3.2 billion IKR last year. A similar development has occurred at Norðurál. Interestingly a large part of these services relate to the rodding shop operations as you will hear more about in some of the presentations given at this conference.
A remarkable development has taken place in the high-tech sector in Iceland in the last few years, such as the production of electronic food processing equipment, protheses, pharmaceuticals and information technology. The turnover in the sector has grown from 20 billion IKR in 1997 to 120 billion IKR in 2004. This is in my mind a true demonstration of the capabilities of the human resources in this country based on massive R and D involvement. I am convinced that in the future we will not only see growth in the primary metals industry but also, on the side track, an emerging spin-off and downstream industry adding value to the light metal products for the international market.
Ladies and Gentlemen!
I hope that you will enjoy this interesting conference and that you will take home with you good memories and impressions from your visit to Iceland.