China Nonferrous to build aluminium smelter in Iceland

Soon after visiting the NFC-built aluminium smelter in Pavlodar, Kazakhstan, Wang Hongqian 王宏前, the company’s GM, flew to Iceland to sign an agreement with local company Klappir Development about plans to build a new aluminium smelter in Hafursstaðir, between the villages of Skagaströnd and Blönduós (some 100 km west of Akureyri). Actually, Wang visited the Kazakh smelter a month before going to Iceland, but I just wanted to juxtapose the projects. The Hafursstaðir plant has a planned capacity of 120 tonnes per year, but in a second stage it might eventually reach twice as much, just a bit below that of Pavlodar smelter. PM Sigmundur Davíð Gunnlaugsson and Chinese ambassador Zhang Weidong 张卫东 were present at the signature. NFC (有色股份) is the largest listed subsidiary of state-owned integrated miner China Nonferrous.

The agreement is being called a letter (‘statement’) of intent (viljayfirlýsing) by Icelandic media and an MOU (谅解备忘录) by the Chinese embassy. Whichever the case, we might assume the agreement is non-binding, given that the project’s feasibility depends on securing electricity from nearby power plants, for which it must compete with other, more advanced projects. Icelandic reports talk of a turnkey deal for which NFC would help muster 70% of the financing from ‘Chinese and other’ banks. The Chinese embassy simply says NFC will conduct a feasibility study and then talk again.

Landvernd, an environmental NGO, are firmly against the idea. Nearby municipalities are OK with it, likely looking forward to the 240 permanent jobs the smelter would create.

Klappir has been trying to get NFC involved in building an Al smelter in Iceland for more than two years. Ma ‘Blubbermouth’ Jisheng 马继生, the previous Chinese ambassador and apparetly a Japanese spy, had welcomed the negotiations during a 2013 meeting with Klappir’s owner Ingvar Unnsteinn Skúlason.

There are already three aluminium smelters in Iceland. In 2013, the aluminium industry accounted for 35% of the country’s exports of goods and more than two thirds of its electricity consumption.

China Nonferrous is also involved in mining in Greenland, through agreements with Ironbark for the Citronenfjord zinc project and with Greenland Minerals and Energy for the Kvanefjeld uranium and rare-earth mine, where a pilot plant has already yielded some concentrate.

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One thought on “China Nonferrous to build aluminium smelter in Iceland

  1. […] smelter in Iceland. Their agreement is all non-binding and the plans didn’t look that serious at first, but (again unbeknownst to Western-language media) meetings in China in the last few months […]

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