Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Rio Tinto announced on Monday it has reached agreement on an amended power contract for the ISAL aluminum smelter in Iceland.
The agreement with Landsvirkjun, the power supplier, will deliver a “more competitive power price and energy flexibility” that is mutually beneficial for both ISAL and Landsvirkjun, Rio said in a media release.
“We are pleased to have reached an agreement on a power price that, coupled with improved efficiencies we have delivered at the site, makes ISAL more competitive,” Rio Tinto Aluminium chief executive Alf Barrios said in a press release.
“This provides a stronger footing to continue operations at the smelter and gives increased security for the team at ISAL, who have been doing an outstanding job in challenging conditions,” Barrios said. “We will continue to work to strengthen ISAL’s future in order to keep supplying low carbon aluminium to customers in Europe and North America, and making a significant contribution to Iceland’s economy.”
In parallel to the new agreement, Rio Tinto has decided to withdraw a complaint filed with the Icelandic Competition Authority in July 2020 regarding the energy supply for ISAL.
The company had previously asked the ICA to address anti-competitive conduct by Landsvirkjun through discriminatory pricing and long-duration power contracts, so that the ISAL smelter and other Icelandic manufacturing and businesses were able to compete internationally.
Rio’s complaint alleged that Landsvirkjun’s supply contracts bind customers to long-duration terms, rendering it impossible for alternative energy suppliers to either enter the Icelandic market or expand operations.
