Rio Tinto to review future of ISAL smelter
12 February 2020 - 07:03PM
Business Wire
Rio Tinto will conduct a strategic review of the ISAL smelter in
Iceland, to determine the operation’s ongoing viability and explore
options to improve its competitive position.
ISAL is expected to remain unprofitable in the short to medium
term in the challenging conditions facing the aluminium industry,
due to the smelter’s uncompetitive energy costs and historically
low aluminium prices.
Rio Tinto will continue discussions with the Government of
Iceland and power provider Landsvirkjun on how the smelter can
return to profitability and become competitive in the global
market.
Rio Tinto Aluminium chief executive Alf Barrios said “We have
worked intensively to improve ISAL’s performance, however it is
currently unprofitable and cannot compete in the challenging market
conditions due to its high power costs.
“Rio Tinto will review options for the smelter, with the aim of
finding a solution for ISAL to become an economically viable
business.
“ISAL makes a significant contribution to Iceland’s economy and
we will work closely with stakeholders who have a shared interest
in a strong future for the smelter, including the government,
Landsvirkjun, employees, unions and the local community.”
The strategic review will consider all options including
curtailment and closure, and will be complete in the first half of
2020.
Production at ISAL has already been reduced to 85 per cent of
the smelter’s capacity due to its lack of profitability.
ISAL is wholly owned by Rio Tinto and around 500 people work at
the site.
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