Rio Tinto files complaint with Icelandic Competition Authority over ISAL smelter power agreement
22 Luglio 2020 - 04:43PM
Business Wire
Rio Tinto has today submitted a formal complaint to the
Icelandic Competition Authority (ICA) alleging abuse of market
dominance by Landsvirkjun, the energy supplier to Rio Tinto’s ISAL
aluminium smelter in Iceland.
Rio Tinto is asking 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 are able to compete
internationally.
Rio Tinto Aluminium chief executive Alf Barrios said
“Landsvirkjun’s abuse of its dominant position in the Icelandic
energy market needs to be addressed or Iceland is in danger of
losing export industries with major employment like ISAL. ISAL pays
significantly more for its energy than other aluminium producers in
Iceland, which undermines its competitive position in the market.
We cannot continue to produce aluminium in Iceland if the power
pricing system is not transparent, fair and internationally
competitive. In the meantime, our teams at ISAL will continue to
focus on safely reducing cost, improving productivity and
delivering on our commitments to customers.”
Rio Tinto’s complaint alleges that pricing terms of the power
agreement with Landsvirkjun are discriminatory, abuse its market
dominant position and cannot be justified. 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.
Rio Tinto has actively engaged with Landsvirkjun this year in an
attempt to ensure a sustainable future for the smelter and the 500
people that work there. Despite numerous efforts to constructively
engage, Rio Tinto has concluded that Landsvirkjun is not ready to
provide electricity purchase conditions that will allow ISAL to
become sustainable and competitive, and to address its abusive and
discriminatory conduct.
Rio Tinto announced a strategic review of the ISAL smelter on 12
February 2020. Rio Tinto is concluding the first phase of the
strategic review with the filing of the ICA complaint. If
Landsvirkjun does not address its abusive conduct, ISAL will have
no choice but to consider termination of its energy contract and
commence planning for orderly closure of the smelter.
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