Engineering & Mining Journal

OCT 2017

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32 E&MJ; • OCTOBER 2017 www.e-mj.com NORDIC MINING 2017 In the 12 months since E&MJ; last re- viewed the Nordic mining and exploration sector, the picture has remained largely static. Established producers have main- tained their operations, new starts have largely fallen by the wayside, and the junior explorers have thinned both in number and in terms of overall expendi- ture. And, until commodity prices begin to climb again and remain at sustainable levels for sufficient time to allow confi- dence and financing to return, there seems little chance of the Nordic mining scene doing much beyond maintaining the status quo. The relative inactivity compared to four or five years ago, for example, has nothing to do with the region's mineral potential: far from it, in fact. Much more to the point is that exploration funding has shrunk worldwide, especially for the junior sector, while the relatively high pro- duction costs inherent for mines located in countries with expensive labor, strong environmental-protection policies and challenging infrastructural logistics has unquestionably hurt existing producers' competitiveness. Iceland's Energy Conundrum Although without its own mining sec- tor, metallurgy — particularly aluminum smelting and other high-energy processes — is a significant contributor to Iceland's economy. The country generates around 85% of its primary energy needs from re- newable resources, with hydropower con- tributing 20% of the total. And this abun- dant hydropower has been the key to the success achieved by Iceland's aluminum smelters, with the country today hosting three plants with a combined annual ca- pacity of some 800,000 metric tons (mt) of metal. Development in Iceland's alumi- num smelter output since the start of the 21 st century is shown in Figure 1. In operation since 1998, Norðurál's Grundartangi smelter is currently in- volved in a long-term expansion project aimed at increasing annual capacity from 280,000 mt to around 325,000 mt per year (mt/y) in due course. Its name- plate capacity in 2016 was 313,000 mt/y. Operated by a wholly owned sub- sidiary of U.S.-based Century Aluminum, Grundartangi produces standard-grade aluminum and a primary foundry alloy product. It is also Century's largest, most modern and lowest-cost smelter. The plant operated at full capacity during 2016, in contrast to the com- pany's three U.S. smelters, only one of which ran at capacity last year. Commissioned 10 years later, Alcoa's Fjarðaál smelter has a nameplate ca- pacity of 344,000 mt/y. The company did not identify the output of individual plants within its overall metal total in its latest annual report, but the assumption must be that Fjarðaál's low energy costs will have allowed Alcoa to run the plant at or near full capacity. The company claims that Fjarðaál is one of the world's most technologically advanced plants, with a low environmental footprint that is helped by the use of a flue-gas scrubber that removes a reported 99.8%-plus of the smelter's emissions. The smallest of the three Icelandic smelters, Rio Tinto's wholly owned ISAL plant at Straumsvík produced its name- plate 205,000 mt of metal last year, marginally higher than in 2015. Locat- ed at Hafnarjordur, it is also the oldest of the three, having been commissioned in 1969. In 2014, the company renegotiated its power supply contract with the Ice- landic state power generator, Landsvirk- jun, which had been signed four years Nordic Miners Mark Time From the boom days of just a few years ago, the Nordic mining scene has essentially retrenched to its established structure as more speculative ventures have found the going too tough. That has not stopped innovation, however, particularly in the region's metallurgical sector. By Simon Walker, European Editor Figure 1—Iceland's aluminum smelter output, 2000-2016 (mt). Source: British Geological Survey apart from 2016 production: USGS estimate.

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