Alcoa to study feasibility of a hydro-powered smelter

On May 23, the Greenland Home Rule Cabinet agreed to enter into a memorandum of understanding (MOU) with the aluminum company Alcoa Inc. The agreement entails cooperation on a feasibility study for constructing an aluminum smelter with a 340,000 metric-ton-per-year capacity in Greenland.

The MOU also encompasses a hydroelectric power system and related infrastructure improvements, including a port. The exact size and cost for the overall venture will be determined when the project plan is finalized.

Under the MOU, the parties will begin site selection, environmental studies, engineering assessments and other aspects of the project. If the viability of the project is proved, groundbreaking for the hydroelectric power system would be expected in 2010, and for the smelter in 2012. The smelter could then commence operation by the end of 2014.

“Alcoa has a disciplined growth strategy, as aluminum demand is strong and consumption is expected to grow significantly over the next decade. We have nearly 120 years of experience in developing and operating aluminum smelters around the world in a sustainable manner, sensitive to the environment, and valued by the communities in which Alcoa operates,” said Alcoa chairman and CEO Alain Belda. “We will bring our technology and management capabilities to this venture to ensure the development of a highly competitive, environmentally friendly smelter that adheres to our stringent values and delivers sustainable development.”

“The aluminum industry offers an excellent opportunity that we may in Greenland exploit our hydropower resources for the benefit of the country’s occupational and business development,” stated Siverth K. Heilmann, Greenland’s minister of trade, labor and vocational training. “At the same time, the project is in full accordance with the cabinet’s long-term goal of replacing hydrocarbon-based energy production with hydropower, one of the reasons being concern for the global environment.

“I have visited smelters in different parts of the world, and through personal experience learned about Alcoa’s consideration for the environment and commitment to ensure that a future smelter will also in Greenland become an asset to the local community, socially and educationally, as well as economically.”

About the choice of Alcoa as partner in preference to other interested aluminum companies, explains, “Alcoa has shown their determination to invest considerable resources in the development of this project together with us. Simultaneously, they have been ready to meet Greenland’s requirements as to the pace of the project development, the environmental process, efforts in training and education, etc. We still have far to go and important decisions to make before the project becomes reality, but with this agreement, Greenland and Alcoa have taken a very important step on the way.”

In order to facilitate a quick initiation of the important field surveys, the parties have agreed that the MOU will be signed in connection with the upcoming meeting of the Joint Committee in Ilulissat, on May 25-27.

Preferred sites for the proposed smelter will be collaboratively identified by Alcoa and the Greenland Home Rule Government. The three municipalities of Nuuk, Sisimiut and Maniitsoq, which have all selected potential locations, support the project, and will take active part in the continued work. Final recommendations will go to the Greenland Home Rule Government for ratification.

Upon completion, this development project would represent one of the largest investments in Greenland’s history, stimulate economic growth and manufacturing diversity, create up to 600 direct, stable jobs, and contribute to increase Greenland’s overall productivity and economic self-support.