Aluminium Smelting in Iceland – Alcoa, Rio Tinto Alcan, & Century Aluminum Corp.

We’ve all heard about Alcoa’s aluminium smelter in Iceland along with it’s environmental implications.  We have not, however, heard all of the facts along with some of the beneficial reasons for having such smelters in Iceland.

Refining & Smelting – From Bauxite to Aluminium

Aluminium itself (Al) is not exactly a naturally occurring element.  It is most commonly derived from Bauxite which consists of gibbsite Al(OH)3, boehmite γ-AlO(OH), and diaspore α-AlO(OH).  World bauxite reserves are given in the chart to the right.  (Data from a 2012 USGS report)  What we see is that Guinea, Australia and Brazil together have over 50% of the world bauxite reserves.

Bauxite must first be refined into alumina Al2O3 by means of the Bayer process.  This mainly requires sodium hydroxide NaOH and the energy required to heat intermediate products as inputs.  ‘Red mud’ waste with a pH of 10 – 13 is produced as a byproduct and stored in holding ponds.  On average, 2 units of red mud are produced for every 1 unit of alumina.

Alumina Al2O3 is then smelted into aluminium (Al) through the Hall-Héroult process.  Although somewhat complicated, the alumina is disolved into a mixture of molten cryolite, and then electrolysed to end up with pure aluminium.  These reactions take place in cells which are set up in series in a plant.  Given the nature of aluminium smelting, the rate of Al production is proportional to the very powerful electric current that must pass through each cell.  Electric current must be supplied continually and reliably.  Hydrogen fluoride (HF) and CO2 are both given off as fumes.  HF, if untreated, is toxic and corrosive.  Other cyanide-forming materials are also produced as byproducts.  There are methods that are used to treat these products.  (Read more about the Hall-Hérault process here)

For the Hall-Hérault process to function, an electric current of low voltage but from 200,000 to 500,000 amperes must pass continuously through each cell.  On average it takes about 15.7 kWh of electricity to produce 1 kg of aluminium.   This is what makes aluminium smelting such an energy intensive process.

Due to the nature of the process, power outages have the potential to cause damage to production cells as the molten liquids could solidify in absence of adequate current.  For this reason, production facilities need to be near secure and reliable sources of energy.

Aluminium Smelting in Iceland

Why Iceland?  From what we know about the energy requirements for smelting aluminium, countries such as iceland that have untapped hydroelectric dam potential stand to be perfect contenders in the search for low cost electricity.  When profit is your bottom line, lower input costs are what you seek.

There are currently 3 operating aluminium smelters in Iceland.  As much of the world’s bauxite is refined into alumina in other countries, Iceland smelts solely the alumina into aluminium rectifying the problem of red mud waste on Icelandic ground.  (Iceland would not have the comparative advantage in refining, as refining is not energy intensive as is smelting)  In 2010, Iceland only contributed about 2% of the world’s aluminium smelting production (780 thousand metric tons).  The chart on the right shows this information.

The following table summarizes all three Icelandic aluminium smelters. What is notable is that the aluminium industry’s total power usage amounted to roughly 73% of Iceland’s total power consumption in 2010. Employment is sizeable, yet it still attracts a sizeable amount of foreign labour.  It has been criticized by many sources that a large enough percentage of labour used for the construction of these projects was not sourced in Iceland.  What is more, is that high profits in years of particularly high aluminum spot prices have fled the country to it’s foreign owners.  Years of low aluminum prices, however, would result in subsidies from these foreign firms in keeping company operations afloat.

Alcoa’s Fjarðaál Smelter

Alcoa’s Fjarðaál smelter located in eastern Iceland has received a lot of attention.  This is due to the fact that the state owned energy company Landsvirkjun built the 630 MW Kárahnjukar hydropower station along with it’s associated dams in order to accomodate Alcoa’s smelter and thus caused the flooding of a sizeable area that contained various natural wild and plant life.  (Dam reservoirs are shown in red) Water from the hydroelectric dams is diverted through underground tunnels to the underground Kárahnjukar power station.  Water flow comes from the slow melting of the nearby Vatnajokull glacier.  Power is then sent through high voltage transmission lines to the Fjarðaál smelter.

Rio Tinto Alcan and Century Aluminum Corp’s Aluminium Smelters

Less commonly discussed are the Grundartangi and Straumsvik smelters of western Iceland.  Power source data was not available, but it likely comes from the hydroelectric dams that hold up the water reservoirs that are show in red on the above map.

Environmental Concerns

  • Renewable Energy Use – All 3 aluminium smelters rely wholly on hydroelectric and geothermal power.  This carbon footprint from using these power sources is almost nonexistent when compared with the footprints of other smelters that rely on coal-fired power stations in other countries.  Other worldly smelters use nuclear power as well.
  • Some of the main environmental criticisms stem from the flooding of lands following the construction of large hydroelectric dams.
  • Fluoride byproducts, if untreated, can devastate local environments.
  • Most environmental publications start by citing the CO2 and energy consumption emissions per capita of Iceland in comparison with those of other countries.  With a population of under 300,000, it is clear that these statistics will be high.

When you look at Iceland’s scenario with respect to the world as a whole, it can be argued that Iceland is relieving some of the pressure that other smelters in other countries may be facing.  If world production were to be held constant, would it not be better for the world as a whole to have as large of a percent of aluminium smelting as possible fed by non-CO2 emitting energy sources?  If Iceland does not accomodate 2% of world production, will this 2% be moved and thus smelted with the help of dirty third-world coal-fired plants?  China, smelting 41% of the world’s aluminium in 2010 used mainly coal as a power source.  Iceland currently only uses a small percentage of it’s possible hydroelectric capacity.  Would it not be better for the world as a whole to see an even greater percent of world production transferred to a region that would be able to supply this type of energy?  CO2 emissions worldwide would in-fact decrease.  Is this not the goal?  Theoretically, yes it is.

Unfortunately, the reality is that we only have so few locations on the planet that are ecologically pristine.  Iceland is to a large extent one of these locations.  With several new plans currently under development to build new dams and aluminium smelters, there is likely to be much debate ahead related to ecological feasibility.  In 2010 I visited Iceland, and was able to drink arguably some of the best tasting water I had ever had.  Iceland prides itself of the purity of their water, having impressively low traces of heavy metals or contaminates.  It is tough to imagine a future where this would no longer be possible.  Heavy industry is in some ways the fast-track to this future.  For this reason, it is very important that Iceland be strong in evaluating the economic benefits from hosting such an industry.



2 Responses to Aluminium Smelting in Iceland – Alcoa, Rio Tinto Alcan, & Century Aluminum Corp.

  1. Pingback: Oil Formations of Iceland’s Dreki Region Confirmed « Arctic Economics

  2. Pingback: An Icelandic Time-lapse – An Incentive to Recycle your Aluminium « Arctic Economics

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