Iceland: Mining, Minerals and Fuel Resources

Topics Covered

Welcome to Iceland
Overview of Resources
Metals
Investment
Sources

Welcome to Iceland

Iceland is an island country located in Northern Europe to the northwest of the United Kingdom. The total area of the country is 103,000 km2, and it has a small population of 313,183 as of July 2012. The climatic conditions of the country are mostly cool temperate.

The national flag of Iceland.
Image Credit: CIA Factbook.

Iceland’s economy has a capitalist structure with free-market principles. The country’s close ties with the European Union (EU) and its membership in the European Free Trade Association allows it to easily trade within Europe. Prior to the 2008-2009 financial downturn, Iceland had enjoyed high levels of growth, low unemployment rate, and an equal distribution of income. The GDP of the country was reported to be $12.57 billion in 2011.

Iceland has an abundant source of geothermal power, but limited mineral and metals reserves. The mining industry does not play an important role in the country’s economy and the economy is more dependent on its fishing industry. However, the abundance of geothermal power has attracted foreign investments to the aluminum sector recently.

Overview of Resources

Aluminum is Iceland’s leading mineral commodity. Ferrosilicon and diatomite is also produced in the country. The country relies on imports to meet domestic demand for mineral commodities.

In 2010, small quantities of industrial minerals such as cement, crushed stone, pumice, salt, sand and gravel, and scoria were produced.

The map of Iceland. Image Credit: CIA Factbook

Metals

Rio Tinto Alcan of Canada invested $487 million in its Straumsvik aluminum smelter to increase production by 20% in 2010. The Straumsvik smelter increased production in April 2012 and aims to reach its full production capacity by July 2014.

In 2010, construction of a new pot relining facility was started at Alcoa Inc. of USA’s Fjaröaál smelter at Reydarfjordur, which would cost about $30 million. This June, the new Fjardaál pot lining unit was officially opened for production operations.

Investment

Experts feel that Iceland’s mining sector would remain the same with aluminum and ferroalloy production continuing to dominate the mineral industry. The government is likely to pay more attention to petroleum exploration once the country’s economy is stabilized.

Disclaimer: The Author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.

Sources

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