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)
WWF has vowed to continue to press for a national park in eastern Iceland instead of the combined smelter and hydro project, which will be the largest ever infrastructure development in Iceland. It involves the construction of a 190-meter (623 foot) high dam as well as other smaller dams, tunnels, power lines, roads and a 57 square kilometre (22 square mile) reservoir.

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)
But the WWF charges that the development will affect wildlife and plants over 3,000 square kilometres (1,158 square miles) of Icelandic wilderness - some three percent of Iceland's total land area - and destroy parts of the unique Dimmugljufur canyon, Iceland's Grand Canyon.

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)
WWF, and an alliance of Icelandic conservation organizations, including the Iceland Nature Conservation Association, campaigned for Alcoa to withdraw from the project, since it stepped in when the Norwegian company Norsk Hydro pulled out of a similar project earlier this year.

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."