Northwest Iceland Municipalities sign co-operation agreement for new aluminum project

Northwest Iceland Municipalities and Klappir Development ehf. have signed together a declaration of intent and an agreement of cooperation for the construction and operation of an aluminum smelter with a capacity of 120,000 tpy at Hafursstaðir in Skagabyggð.

The municipalities of Blönduósbær, Húnavatnshreppur, Húnaþing vestra, Sveitarfélagið Skagaströnd, Skagabyggð and Sveitarfélagið Skagafjörður published a joint statement on Friday 12th June declaring the same.

At present the existing smelters have a cumulative annual production of around 800,000 ton with Straumsvík contributing around 190,000 tons, Grundartangi at around 260,000 tons and Reyðarfjörður at 350,000 tons. The new smelter is expected to contribute to the total aluminium capacity in Northwest Iceland.

According to the joint statement, the agreement is a direct result of a parliamentary proposal, made and approved by Alþingi in January 2014 and it was put forward to push national and local authorities to work together for economic development in the Northwest.

The new factory is expected to run on hydro power from Blönduvirkjun dam and it is supposed to be consuming 206 MW of power. The statement also declares that the new project will create 240 permanent jobs and about 800 temporary jobs for the construction of the smelter.

Northwest Iceland however, does not include the Westfjords, which is counted as a separate region in the country.