CHICAGO The parliamentary
elections in Iceland may work to the advantage of Century
Aluminum Co., according to both the company and analysts.
The center-right Independence
and Progressive parties, which were in power when
Icelands economy collapsed in 2008, beat the ruling
coalition of Social Democrats and Left Green parties in the
April 27 vote, according to media reports.
The victory of "pro-business
parties" improved the prospects of the Monterey, Calif.-based
aluminum producers greenfield aluminum reduction project
in Helguvik, Iceland, Davenport & Co. LLC analysts Lloyd T.
OCarroll and John F. Ockerman said in a note to
The first phase of the smelter,
which remains on hold, would take 18 months to complete once a
power deal is secured, meaning that the soonest the facility
could come online would be 2015, the analysts said. They
estimated the cost of the project at $600 million, with Century
already having spent $150 million. Additional phases of the
project would cost between $300 million and $350 million and
take an additional 18 months.
But once complete, the
360,000-tonne-per-year smelter "would be one of the
lowest-cost, most efficient smelters in the world,"
OCarroll and Ockerman said.
Power discussions at Helguvik
have progressed at a "slow pace" in recent months, Century
president and chief executive officer Michael Bless said during
a conference call. "This project is ready to commence; the only
requirement is the completion of those power contracts and an
assurance that transmission will be in place when the smelter
is ready to produce. Were hopeful that the environment,
post-elections, will be conducive to getting this great project
The Social Democrats and Left
Green parties have platforms and philosophies "less friendly
toward heavy industry" than those of the Independence and
Progressive parties, Bless said. Following the elections,
Century may find "the momentum we need ... to push a few things
over the goal line."
smelter in Iceland, which has a rated capacity of 260,000
tonnes per year, is the companys largest, most modern and
lowest-cost smelter, according to Centurys website. The
company "more than tripled the size" of Grundartangi under the
watch of the parties that won in the recent elections, Bless
said during the conference call.
aluminum shipments totaled 158,776 tonnesabout 88,000
tonnes from U.S. facilities and 71,000 tonnes from
Icelanddown 0.7 percent from 159,967 tonnes in the same
period last year.