Rio Tinto has submitted a formal complaint to the Icelandic Competition Authority (ICA), alleging abuse of market dominance by Landsvirkjun, energy supplier for the company’s ISAL aluminium smelter.
The company is asking the ICA to address anti-competitive conduct by Landsvirkjun through discriminatory pricing and long-duration power contracts.
According to Rio Tinto, the pricing and contracts meant the ISAL smelter, among other Icelandic businesses are unable to compete internationally.
Its complaint alleges that pricing systems in its power agreement with Landsvirkjun are discriminatory, abusive of its market position and cannot be justified.
Rio Tinto aluminium chief executive Alf Barrios said Landsvirkjun’s abuse of its dominant position in Iceland’s energy market must be investigated, or Iceland is in danger of losing export industries and employment.
“ISAL pays significantly more for its energy than other aluminium producers in Iceland, which undermines its competitive position in the market,” Barrios said.
“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 has actively engaged with Landsvirkjun this year in an attempt to ensure a sustainable future for ISAL and its 500 employees.
Despite its numerous efforts to engage, Rio Tinto has concluded that Landsvirkjun will not provide purchase conditions that will allow ISAL to become sustainable and competitive.
The mining giant announced a strategic review of the ISAL smelter in February 2020.