On that date the two partners agreed to sign a Memorandum of Understanding (MOU) wich entails co-operation on a feasibility study for the construction of an aluminium smelter with a 340 000 metric-ton-per-year capacity in Greenland, according to press-releases. In comparism, the new Alcoa Fjaardal site in Reidarfjördur in East Iceland, described on pp 4-5 of this issue of the Journal of Nordregio, will have a production capacity 364 000 tonnes annually.
The MOU also encompasses a hydroelectric power system and related infrastructure improvements, including a port. The exact size and cost of the overall venture will be determined when the project plan is finalized.
Studies on site selection, environmental issues, engineering assessments and other aspects will commence this summer. If project proves viable, construction work on hydroelectric power system could be expected to begin in 2010 and for the smelter itself by 2012. The smelter could then commence operations by the end of 2014, according to official statements.
– Alcoa has a disciplined growth strategy, as aluminium 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 aluminium 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, in a comment on the agreement:
– 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, he added.
– The aluminium industry offers an excellent opportunity that we may in Greenland exploit our hydropower resources for the benefit of occupational and business development, was the key message from Greenland's Minister of Trade, Labour and Vocational Training, Siverth K. Heilmann.
–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 ensuring that any future smelter in Greenland will also become an asset to the local community, socially and educationally, as well as economically, notes Heilmann.
At some time during the process, the Norwegian based Norsk Hydro was also discussed as a potential partner in transforming Greenland's society through the production of aluminium.
The reason why Alcoa was chosen as the partner in preference to other interested aluminium companies, was explained by Siverth K. Heilmann:
– Alcoa has shown its 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.
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, would stimulate economic growth and manufacturing diversity, create up to 600 direct, stable jobs, and contribute to increasing Greenland's overall productivity and abilityto support itself economicaly.
Greenland stretches across an area of 2 166 086 km2. More than 80 percent of the country is covered by the massive ice cap. The present-day population is
57 000, mainly of Inuit origin, Greenland has a modern sea-going fishing fleet and emerging tourism and mining industries. Extensive oil exploration activities off Greenland's West Coast will soon also be underway. Alcoa has, in total, 122 000 employees in 44 countries.