Skip to main content

Amended agreement delivers stronger competitiveness for Straumsvik smelter

Written by Customer Service on . Posted in Public Companies.

Amended agreement delivers stronger competitiveness for Straumsvik smelterLandsvirkjun and Rio Tinto Iceland have agreed on amending the power purchase agreement (PPA) between the two companies dating back to 2010, thereby allowing the Straumsvik aluminum smelter to continue operating with a stronger competitive position.Landsvirkjun and Rio Tinto welcome this milestone that gives a more secure footing for ongoing operations of the smelter for the coming years, as well as predictable revenue stream for Landsvirkjun and increased flexibility for both parties. As before, the contract specifies the sale of 390 MW or 3.416 GWh pr. year and expires in 2036.Amending the contract is a positive development for both parties. The base power price has been adjusted and remains in USD and linked to the US Consumer Price Index (CPI). To a small extent, the contract is also linked to aluminum prices which enables price correlation to international markets to some degree.This agreement is an amendment to the current power contract from 2010. The contract‘s terms of non-disclosure are still in full force and therefore it cannot be made public at this time.In parallel to the modified agreement, Rio Tinto has decided to withdraw a complaint filed with the Icelandic Competition Authority in July 2020 regarding the energy supply for ISAL.Hörður Arnarson, CEO of Landsvirkjun: “We welcome the agreement on amending the power purchase contract, as Rio Tinto had requested, and the outcome benefits both parties as well as enhancing the power system ‘s efficiency in Iceland. Our goal remains the same, to guarantee predictable income while considering the changes now taking place in the global markets and customer needs.At Landsvirkjun, we have emphasized supporting our customers in these challenging times. We are determined to continue offering competitive energy prices, as well as fulfilling our role of maximizing the potential yield and value of the renewable natural resources we have been entrusted with, for the benefit of Icelanders.”Rannveig Rist, CEO Rio Tinto Iceland: “This is positive news which reduces the uncertainty around the operation in Straumsvík and improves our competitiveness. We can be very proud of our work in Straumsvík during the last few years. Despite uncertainty the operation has been running smoothly and people never lost sight of the most important things. Safety issues were in good order, production went very well, and the quality of our products has been very good. Our environmental performance was also one of the best ever. Although we have reached this milestone, it does not mean ISAL is not faced with challenges. Situation in the aluminum markets will continue to be challenging but with this agreement we can focus on producing high quality aluminum with our customers’ needs in mind.”AttachmentFRÉTTATILKYNNING_ens

Disclaimer & Cookie Notice

Welcome to GOLDEA services for Professionals

Before you continue, please confirm the following:

Professional advisers only

I am a professional adviser and would like to visit the GOLDEA CAPITAL for Professionals website.

Important Notice for Investors:

The services and products offered by Goldalea Capital Ltd. are intended exclusively for professional market participants as defined by applicable laws and regulations. This typically includes institutional investors, qualified investors, and high-net-worth individuals who have sufficient knowledge, experience, resources, and independence to assess the risks of trading on their own.

No Investment Advice:

The information, analyses, and market data provided are for general information purposes only and do not constitute individual investment advice. They should not be construed as a basis for investment decisions and do not take into account the specific investment objectives, financial situation, or individual needs of any recipient.

High Risks:

Trading in financial instruments is associated with significant risks and may result in the complete loss of the invested capital. Goldalea Capital Ltd. accepts no liability for losses incurred as a result of the use of the information provided or the execution of transactions.

Sole Responsibility:

The decision to invest or not to invest is solely the responsibility of the investor. Investors should obtain comprehensive information about the risks involved before making any investment decision and, if necessary, seek independent advice.

No Guarantees:

Goldalea Capital Ltd. makes no warranties or representations as to the accuracy, completeness, or timeliness of the information provided. Markets are subject to constant change, and past performance is not a reliable indicator of future results.

Regional Restrictions:

The services offered by Goldalea Capital Ltd. may not be available to all persons or in all countries. It is the responsibility of the investor to ensure that they are authorized to use the services offered.

Please note: This disclaimer is for general information purposes only and does not replace individual legal or tax advice.