Faced with power supply problems, Rio Tinto may close Icelandic aluminum smelter

Published: Jul 23, 2020 08:45

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SMM7, March 23: Rio Tinto said that unless power suppliers change the terms of the energy agreement, it may close the aluminum smelter in Iceland, which Rio Tinto considers "discriminatory".

Rio Tinto has 100 per cent ownership of the ISAL aluminium smelter in Iceland with a total capacity of 212000 tonnes and has been operating since 1969 and employs about 390 people. In 2019, the smelter produced 184000 tons of aluminum.

It is reported that Rio Tinto has filed a formal complaint with the Icelandic Competition Authority, accusing Landsvirkjun, the energy supplier of the country's ISAL aluminium smelter, of "abusing its market dominance".

Electricity is one of the most expensive inputs for the production of light metals.

A report earlier this year showed that about half of the world's smelters were losing money. In February, Rio Tinto began a strategic review of the ISAL smelter to explore options such as cuts and closures, saying the smelter was unprofitable. Earlier this month, Rio Tinto said it would close its lossmaking New Zealand business, mainly because of low prices, weak demand and high energy costs.

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