Amid tumble in aluminium prices, Iceland offers cheap power to its smelters

Reykjavik

ICELAND'S aluminium smelters are doing just fine even as the deepest market plunge in about seven years pressures production across the world.

That's because most of them tap cheap power from the north Atlantic island's vast stores of geothermal and hydro-power in contracts that are linked to the price of the metal. The island's three smelters, run by Rio Tinto, Century Aluminum and Alcoa, last year contributed 38 per cent of the US$15.6 billion economy's total exports.

"There are about 300 aluminium smelters in the world and there are probably fewer than five smelters anywhere that are paying less for power than Alcoa and Century pay in Iceland," Ketill Sigurjonsson, chief executive officer of consultant Askja Ener…