Change to the scope of the production upgrade project of Rio Tinto Alcan in Iceland

May 16, 2013

Rio Tinto Alcan in Iceland has informed Landsvirkjun of a change to the scope of the ISAL Production Upgrade project for the company‘s aluminium plant in Straumsvik, Iceland. The initial plan anticipated that the annual production capacity of the aluminium plant would increase by 20% from 190 thousand tonnes of aluminium to 230 thousand tonnes. Rio Tinto Alcan has informed Landsvirkjun of a change to the original plan whereby an increase of 205 thousand tonnes is anticipated. In light of this, it is likely that the power needs of the aluminium plant will be less than originally expected.

A power contract is in effect between Landsvirkjun and Rio Tinto Alcan and is valid until 2036. In accordance with the contract Landsvirkjun will provide 3,590 GWh of electricity annually and 410 MW of power to the aluminium plant. The two companies have a longstanding business relationship and Landsvirkjun anticipates that discussions will take place with Rio Tinto Alcan in the near future and that a satisfactory solution can be found for both parties.

At present Landsvirkjun does not expect that this alteration to the initial plans will have any effect on the construction of the Budarhals hydropower station.

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