Rio Tinto plans to review the future of the Icelandic Aluminium Company (ISAL) smelter to determine its ongoing feasibility amid challenging market conditions.
The company has reduced production at ISAL to 85 per cent of the smelter’s capacity due to its lack of viability.
ISAL is expected to remain unprofitable for the short to medium term due to uncompetitive energy costs and challenging aluminium market conditions, including historically low prices.
Rio Tinto is set to consider all options for ISAL including curtailment and closure as the company continues its discussions with the Government of Iceland and power provider Landsvirkjun on whether the smelter can return to profitability.
“We have worked intensively to improve ISAL’s performance,” Rio Tinto aluminium chief executive Alf Barrios said.
“However, it is currently unprofitable and cannot compete in the challenging market conditions due to its high power costs.
“Rio Tinto will review options for the smelter with the aim of finding a solution for ISAL to become an economically viable business.
“ISAL makes a significant contribution to Iceland’s economy and we will work closely with stakeholders who have a shared interest in a strong future for the smelter.”
The ISAL strategic review is expected to complete during the first half of 2020.