Rio Tinto lodges complaint with ICA over ISAL aluminium smelter power agreement

Rio Tinto announced that it has submitted a formal complaint to the Icelandic Competition Authority (ICA) alleging abuse of market dominance by energy supplier Landsvirkjun to the company’s ISAL aluminium smelter in Iceland.

The company is asking the ICA to address anti-competitive conduct by Landsvirkjun through discriminatory pricing and long-duration power contracts.

Rio Tinto Aluminium chief executive Alf Barrios said “Landsvirkjun’s abuse of its dominant position in the Icelandic energy market needs to be addressed or Iceland is in danger of losing export industries with major employment like ISAL. ISAL pays significantly more for its energy than other aluminium producers in Iceland, which undermines its competitive position in the market. We cannot continue to produce aluminium in Iceland if the power pricing system is not transparent, fair and internationally competitive. In the meantime, our teams at ISAL will continue to focus on safely reducing cost, improving productivity and delivering on our commitments to customers.”

Its complaint alleges that pricing terms of the power agreement with Landsvirkjun are discriminatory, abuse its market dominant position and cannot be justified.

Rio Tinto has actively engaged with the energy supplier this year to ensure a sustainable future for the smelter and its 500 people.

“Despite numerous efforts to constructively engage, Rio Tinto has concluded that Landsvirkjun is not ready to provide electricity purchase conditions that will allow ISAL to become sustainable and competitive,” the company said.

Rio Tinto announced a strategic review of the ISAL smelter on 12 February 2020.