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PR(03)04: The EFTA Surveillance Authority authorises aid to an aluminium plant in Iceland


The EFTA Surveillance Authority has approved measures taken by the Icelandic authorities with the aim to facilitate investment in a new aluminium smelter in the Township of Fjarðabyggð in eastern Iceland. The American company Alcoa Inc. undertakes the project.

The electricity for the aluminium smelter will be supplied by the Kárahnjúkar hydropower facility, which the National Power Company, Landsvirkjun, is planning to build in the region. Both the smelter and the power plant are scheduled to start production in 2007.

During the construction period 2003 to 2007, the smelter project is expected to involve about 2,300 person-years. The aluminium plant is expected to provide 455 jobs on a regular basis. To provide services etc, it is estimated that another 300 jobs will be created in the eastern part of Iceland.

The Authority has deemed the aid elements of the project to be investment aid, which can be approved as regional aid. The eligible area where the aluminium plant will be located, corresponds to a zone eligible for regional aid, according to a Decision by the Authority in August 2001 to establish a regional aid map for Iceland. The estimated amount of aid, as well as the Icelandic commitment not to exceed a maximum amount of aid, relative to capital investments is well below the maximal allowed aid ceilings. Against this background the Authority has decided not to raise objections to the notified arrangements.

For further information, please contact Mr. Amund Utne on tel. +32 2 286 18 50 or Mr. Rolf Egil Tønnessen on tel. +32 2 286 18 56. 

14 March 2003

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