The Guardian March 19, 2003


Alcoa to vandalise Iceland wilderness

CorpWatch, an organisation holding corporations accountable is appealing 
for support to stop the government of Iceland signing a deal that would 
give a subsidiary of aluminium smelter Alcoa, the go ahead to construct a 
large hydropower project in Iceland's Eastern Highlands. This is one of 
Europe's largest remaining wilderness areas. The subsidiary would supply 
power to an aluminium smelter owned by Alcoa.

The "Kahranjukar Project" involves building miles of roads, boring a series 
of tunnels and diverting dozens of rivers to create three reservoirs and 
erect nine dams, including one that is 750 metres  Europe's highest.

Alcoa is the world's largest aluminium producer and is moving to Iceland, 
not to expand production, but to cut costs. It is closing smelters in the 
US and moving to Iceland where the government is offering dirt-cheap 
electricity.

The aluminium plant will get a subsidised rate, thought to be about 1.5 
cents/kwh. The utility has yet to release the price at which it will sell 
Alcoa its hydropower.

But it is not just cheap power that draws Alcoa to Iceland: Iceland's 
reliance on geothermal power gives it an exemption from the Kyoto 
Protocol's fossil fuel emissions. This would allow Alcoa's smelter to 
operate without having to pay penalties for any carbon dioxide emissions.

If the project goes ahead, a large wilderness area would be sacrificed. The 
project would drown 50 square kilometres of tundra, presently the grazing 
grounds for more than 2000 reindeer and the nesting ground for the pink-
footed goose. It will affect the flow of close to 60 waterfalls. In early 
summer, silt from the exposed banks will blow over the countryside. There 
are a number of other serious environmental consequences.

Project officials claim that it will create close to 750 jobs in eastern 
Iceland, an economically disadvantaged region. Yet the economics of the 
project are questionable.

According to an independent analysis commissioned by Iceland's Nature 
Conservation Agency, it is likely to produce annual losses of US $36 
million. These funds could be spent creating other jobs that do not destroy 
a major wilderness area.

Take Action!

The Iceland Nature Conservation Association (INCA) has led a strong 
campaign against the project with regular large demonstrations, daily 
protests at the parliament building, a hunger strike and a court case 
against the environment minister. The environmental activists want to turn 
the area into a National Park of "Fire and Ice".

But time is running out. The Icelandic Government plans to sign go ahead 
agreements before the national elections of May 2003.

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For more information visit: http://www.inca.is Readers wishing to support the campaign may send a free fax to Alcoa tell the company to withdraw from its destructive project in Iceland immediately. To do this, visit http://www.corpwatch.org/action/PAA.jsp?articleid=5828

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