Rio Tinto files renewal for licence towards operating Iceland Aluminium smelter

Rio Tinto filed renewal of licence this week for its Iceland Aluminium smelter (ISAL). However, the current operating license for the smelter at Straumsvík, near Hafnarfjörður, does not expire until 1^st November’20, as reported by the Environment Agency's website.

In July, the company filed an official complaint against Landsvirkjun, the National Power Company of Iceland and nation’s largest electricity generator to the Icelandic Competition Authority (ICA), alleging "anti-competitive conduct, through discriminatory pricing and long-duration power contracts".

Rio Tinto stated: "Landsvirkjun's supply contracts bind customers to long-duration terms, rendering it impossible for alternative energy suppliers to either enter the Icelandic market or expand operations.”

Landsvirkjun has stated: “We believe the power contract for the facility - the only remaining Rio Tinto smelter in Europe - is priced fairly.”

The Anglo-Australian mining giant said: “Due to the dispute, it was considering a termination of its energy contract and to commence planning for a closure of the smelter, which employs nearly 500 workers.”

Rio Tinto initiated a strategic review of the smelter in February’20 and reduced its operating capacity to 85%, stating that it was unprofitable amid the challenging conditions faced by the aluminium sector. Its value was entirely written off in the latest Rio Tinto financial report.

Application for license renewal has been projected as a sign that the miner could stay on in the country, but Rio Tinto's Tiwai Aluminium Smelter in New Zealand vexed a similar strategic review on energy costs before its closure was declared in July’20, which counts around 1000 job loss.