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ENERGY ECONOMICS: ALUMINUM AND ICELAND
WHY EVER should Iceland, perched at the confluence of the North Atlantic and Arctic Oceans, have a viable business of producing aluminum, even importing the ore all the way from Australia? One reason is energy, as Iceland is also on the junction of the Eurasian and North American tectonic plates.
Iceland’s Almannagja is the eastern edge of the North American tectonic plate.
This country, about the size of Ohio, is extremely rich in geothermal as well as hydro energy. Bjarni Mar Gylfason, chief economist for the Federation of Icelandic Industries, noted that this allows them “to export energy in the form of aluminum.”
The Strokkur geyser gives an indication of just how close Iceland’s geothermal wealth comes to the surface.
Iceland’s aluminum smelting industry consumes five times the electrical energy of the country’s entire population. It also employs some 1400 of these 320,000 Icelanders.
Commercial fishing used to be Iceland’s biggest export, but aluminum smelting overtook this in 2008.
Not without controversy, though. Environmentalists—including pop star Björk—have questioned the tradeoffs of industry versus the country’s fragile ecology. Some even say its geothermal supplies might be exhausted.
Though I certainly claim no inside information, Iceland’s on-going tectonic activity suggests it’ll be in the aluminum business for quite some time.
Check out the Dellow and A Bit of Aluminum nearby. ds
© Dennis Simanaitis, SimanaitisSays.com, 2012
Simanaitis Says 
I never thought of exporting energy in the form of aluminum, but it makes perfect sense.
I’m curious though as to why New Zealand, a country rich in both hydro and geothermal generated electrical energy, has never developed an aluminum industry. It certainly is a lot closer to Australia than Iceland. I would think that the cost of transporting the finished product from an island nation would be more than offset by the reduction in the cost of transporting the heavier, bulkier raw material to it.
New Zealand is a major smelter of aluminum. The Manapouri hydroelectric power station was constructed primarily to power the Tiwai Point aluminum smelter, which consumes approximately one third of total power of the South Island.