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Negotiations begun with Alcan for Straumsvík smelter enlargement

January 23, 2006

During the past few years, Alcan has been working towards increasing the capacity of the Straumsvík smelter by approximately 280 thousand tonnes, with the goal of completing construction and commencing operation in 2010. For this purpose, Alcan and Reykjavík Energy have signed a declaration of intent on providing part of the electricity required for the expansion, i.e. about 40% of the additional energy requirements.

The remaining requirements correspond to the capacity of Búðarháls Power Plant in the river Tungnaá and that of those Lower-Þjórsá power plants which have now passed an environmental assessment. Landsvirkjun will refrain from discussions with other energy buyers regarding electricity sales from those power-generating options while the above talks are proceeding.

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