Labour dispute at Icelandic smelter – a threat to the country’s agreement model?

Rio Tinto Alcan is one of the world’s leading aluminium giants. The company was founded as Alcoa in 1902, but the name was changed to Aluminium Company of Canada Limited and later to Alcan in 1945. In October 2007 Alcan merged with Rio Tinto. 

Rio Tinto Alcan employs 68,000 people in 61 countries. The smelter in Iceland is one of the country’s largest employers with some 500 employees. It produces 450 tonnes of aluminium every day. Closing production at a smelter is complicated, because it is a continuous process. 

Aluminium needs vast amounts of energy, so the price of electricity is crucial to profitability. Aluminium makes up around 22 percent of Iceland’s exports. 

The smelter in Straumsvík was built in the 1960s. It is the oldest of Iceland’s three smelters.