Musings, politics and environmental issues

 

On Thursday last week, PCC Bakki sent out a press release saying that they would be shutting down the smelter at the end of July. The closure is supposed to be temporary, as they hope to restart after 6-9 months. But whether it will restart is another question.

PCC blame COVID-19 and lack of demand due to it. The Icelandic press, however, have been quick to point out that PCC has suffered economic and technical problems for a long time and have intimated that COVID may just be a pretext. Note that no news of this has appeared on PCC’s international site, nor their Icelandic site, nor their Icelandic Facebook page. Nor has it appeared on any of the English-language news sites in Iceland that I have checked.

Around 80 of 130 workers will be laid off, with more leaving after some modifications have been made to the plant. PCC’s idea is to rehire its current employees when it restarts again. The local council says that efforts will be made to find alternative work for those with families, who have become settled in the nearest town to the plant, Húsavík, but that people living in accommodation on site are likely to be more mobile and will move elsewhere to look for work. An unnamed shop steward said that PCC employees had sensed for some time that the plant would close.

Personally, I can’t see any of the workers deciding to stay in the area on the basis that it might/will reopen at some stage.

Rún­ar Sig­urpáls­son, CEO of PCC Bakki, is realistic and told an Icelandic newspaper that “he hoped he would be able to reclaim his staff. It’s no more complex than that … Whether it will be 6 months or 12 months I can’t say”. But he says that the global demand for silicon metal is low at the moment and the price is low. And the COVID-19 pandemic is by no means over, and it’s impossible to predict when it will end. He then said that for the company to restart, the price for silicon metal would have to rise significantly.

PCC have to keep paying Landsvirkun, their energy provider, as they have a take-or-pay energy agreement. Generally, the buyer has to keep paying energy costs, or at least 80% of the negotiated energy. When no income is being generated, this will be yet another setback that the company will have to face.

One of the arguments put forth for constructing smelters in Iceland has been that it will provide employment, meaning employment for the local community. But this doesn’t happen. Building is usually done by foreign workers as locals don’t want to do it, and it turns out that 30 of the 40 families that have been affected by PCC’s imminent closure are foreign, as are the 40 workers living in purpose-built site accommodation.

Meanwhile, comments on the new EIA for the former silicon metal plant in Helguvík have just closed. Stakksberg, a company set up by Arion bank to see to the sale of the plant that was shut down in September 2017 by the Environment Agency, has been trying to sell the plant for the last three years and I suspect that they hope that if a new EIA is approved, it will help the sale. The locals are against it re-opening, and the local council was also very critical of the EIA, especially in hindsight of its earlier experience with the Helguvík smelter. In my comment to the Planning Agency about the EIA for the Helguvík smelter, I asked whether notice had been taken of the problems suffered by the PCC smelter – and that was a few days before PCC announced they were closing.

I suspect that neither smelter will be operating a year from now.

Update, 2 July: PCC have another glitch to face. About 25% of the silicon metal produced by PCC goes to the USA and is used by the car industry. Not only is the car industry now selling far few cars because of lockdown, travel  restrictions and the like, but American silicon metal manufacturers Ferroglobe and Missisippi Silicon are now pressurizing the American government to impose a tax on silicon metal from Iceland, Bosnia, Malaysia and Kazakhstan because these countries hamper normal pricing and healthy competition.

I’ve just had an article published in BBC Future about how the CarbFix version of CCS (carbon capture and storage) can potentially be used to reduce CO2 emissions from large-scale industry, which in Iceland’s case consists of three aluminium smelters, a silicon metal smelter and a ferro-silicon plant.

The CarbFix method is adapted for Iceland’s porous, permeable basalt rock. Instead of taking thousands of years for mineralization to take place underground, with CarbFix it only takes 1-2 years. The procedure has been used to capture both CO2 and hydrogen sulphide from the Hellisheidi geothermal power plant, where CarbFix is in operation, but potentially it could be used for other gases. Read the article to find out more!

A great deal of emphasis in CCS has been put on Direct Air Capture, which is also discussed in the article. Part of the reason for the expense is the need to capture and fix small concentrations of target gases, which is more challenging. A small DAC system is now in operation at Hellisheidi.

Using funds from the EU’s Horizon 2020 programme, the four-year Geothermal Emission Control (GECO) project is investigating the use of CarbFix in Germany, Italy and Turkey near geothermal fields as well as Iceland. As the bedrock in these countries is not basalt, the initial groundwork involves carrying out background studies of potential injection sites, such as the potential of different rock types to mineralize CO2 and permeability. Injection is due to start in 2021.

Emissions from Iceland’s power plants are minimal compared to those in other countries. Nevertheless, Landsvirkjun, Iceland’s national power company that operates three geothermal power stations, is going to build a gas capture plant at one of its geothermal plants, Krafla, using CarbFix to capture the CO2 that is emitted, and in so doing intends to work towards becoming carbon neutral by 2025.

Because BBC attracts a global audience, my editor wanted me to include information on the processes involved in  conventional CCS as well, which I did. Currently, there are 2 large-scale power plants with CCS in operation, but the number of large-scale CCS facilities globally number 21: 2 of these are in power, while the remaining 19 are in industrial applications. I was originally given misleading information on the number of large-scale CCS plants operating, but after the article was published I was told the correct figures (see above), with which my editor says she’ll amend the article (she hasn’t done so yet).

 

 

PCC Bakki are rather secretive about how well their silicon metal smelter in North Iceland is performing. They have not published any news on their website since December last year and their Facebook page gives limited information. Both are only in Icelandic.

However, the German site of the holding company has more recent news, dated April 30: “Our silicon metal production facility in Iceland currently operates with only one furnace. We shut down the second one due to a technical malfunction and it will remain out of operation until the plant constructor has carried out the projected modification of the roof. However, due to travel restrictions because of the coronavirus pandemic, this modification is likely to be postponed to the summer of this year“.

The holding company has an 87% share in PCC Bakki, the remainder being in the hands of Íslandsbanki bank and pension funds.

The PCC Quarterly Report 1/2020 is equally illuminating. Talking about the PCC company as a whole, it says: “The performance of PCC BakkiSilicon hf., Húsavík (Iceland), was adversely affected by the severe winter which lasted into April this year and led to several production interruptions during the quarter. The production output of PCC BakkiSilicon hf. was therefore significantly lower than planned, with corresponding effects on volume and sales. … The earnings for the first quarter of 2020 were likewise below our expectations and down on the previous year. The gross profit ratio declined compared to preceding quarters. The main reasons for this development … were the losses incurred by PCC BakkiSilicon hf.

Towards the end of the report, more information is revealed. After repeating that Iceland’s severe winter weather had been detrimental to the smelter’s performance, the report goes on to say: “Moreover, PCC BakkiSilicon hf. remained unable to fully benefit from the slightly rising price level for silicon metal as a number of old contracts still had to be serviced at low prices during the first quarter. Meanwhile, one of the two arc furnaces has had to be entirely shut down due to the effects of Covid-19 and will probably not be put back into operation until completion by the plant construction contractor of the rehabilitation work on the roof of the facility’s filter house. Due to coronavirus restrictions, this rebuild planned for May will probably be delayed until summer 2020. The second furnace is presently operating stably. Our team on site is also currently working flat out on the implementation of various measures to increase efficiency and thus reduce costs in order to sustainably improve the earnings situation over the long term.

However, it seems, from their Facebook page, that they have indeed being trying to start up the problematic arc furnace in May – unless their “stable” furnace has also been having problems. There are posts dated May 5, May 8, May 14, May 15 and May 28, which detail “cleaning” of one of the furnaces (twice), a broken electrode, unspecified repair work and maintenance work. In each case they warn that white or light-coloured smoke could be expected to emanate from the plant, and sometimes odour is mentioned.

Despite all the problems the PCC plant has been encountering with its “best available technology”, on the other side of Iceland Stakksberg (owned by Arion bank) is still trying to sell the silicon smelter that was owned and operated by United Silicon until it was closed down. Stakksberg have produced an environmental impact assessment for the Helguvik smelter that is composed of a number of separate files, probably in the hope that if the EIA gets approved the smelter will be easier to sell. The EIA is initially aimed at operating one furnace, but this will be stepped up to four furnaces in due course.

One of the files is from the Norwegian Institute for Air Research, NILU. Considering that  odour and respiratory problems were frequent complaints from local residents when the Helguvik smelter was operating, it is somewhat pathetic that NILU cannot provide better information that “While there have been several measurement studies around Norwegian metallurgic industries, no studies especially link emissions to odor and/or health impacts on the nearest neighbours. Nevertheless, we have included summary of three older studies, which we believe are relevant even if the source of emissions is not silicon industries.

I haven’t read the whole EIA, but it would be interesting to know if those responsible for it have probed into the problems at PCC’s smelter at Bakki in the north of Iceland and taken account of the problems encountered there – including such basics as “severe winter weather”. I doubt they have.

Update: PCC have announced that they will be closing their silicon smelter at Bakki, supposedly on a temporary basis. They blame COVID-19 – there has been less demand and prices are lower. There is (as yet) nothing on their website, or the international PCC website, or PCC Bakki Facebook page, but here is a report in Icdelandic giving more information. I will write another blog soon about it.

Last week, it was reported that once again Iceland would not be hunting fin whales this year. Kristjan Loftsson, the man behind the killing, gave several reasons for his decision.

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One reason is that since Japan started to allow commercial whaling in 2018 rather than “research whaling”, the Japanese government now subsidizes Japanese whaling ships, which makes it difficult for Loftsson to compete commercially (plus of course he has to get the whale meat to Japan via a circuitous route as so few ports are willing to allow him in).

Loftsson also says that the Japanese have stricter requirements for chemical analysis for Icelandic whale meat than for their own whale meat.

But he also sees potential problems when processing the meat due to COVID-19. He says that the work involves staff working near each other. If one of his employees becomes infected with the coronavirus, all the others will have to go into quarantine for two weeks, which means it will be impossible to cut up the dead whales, etc. He actually has faced legal action for carrying out whale processing in the open air, but has wangled his way out of it.

Although he will not be killing more whales this year, Loftsson still intends to carry on with the university-based research on making gelatin out of whale bones, an iron-rich supplement for people suffering from anaemia, and using whale blubber for medicinal purposes and food production.

On 2018, 146 fin whales and 6 minke whales were killed off Iceland.

The minke whalers basically gave up in 2018, as  their main hunting grounds near Reykjavik had become a whaling sanctuary. That year, they stopped soon after they started.

Gunnar Bergmann Jonsson, who runs the company IP-útgerð that ran the minke-whaling operation, said this week that he does not envisage doing any more minke whaling.

Ironically, a report was produced last year by Iceland’s Institute of Economic Studies which concluded that whaling in Iceland would be profitable. That report was, however, subject to heavy criticism for the assumptions made.

 

The Icelandic pension funds obviously don’t have much faith in the PCC silicon metal plant in North Iceland, as they have reduced the values of their shares in the plant by 75-100%. Íslandsbanki have also reduced the value of their shares “considerably”, without disclosing how much.

A company called Bakkastakki manages the billion kronur investments by the Icelandic pension funds. The five pension funds involved had acquired a 13.5 % share in Bakkastakki, with the German company PCC SE holding 86. 5% stake in the silicon plant. Icelanders can read about it here.

The reason for the action taken by the pension funds (which PCC had approached last year when searching for more funds) was the great deal of uncertainty about the operation of the silicon plant (i.e. delays and difficulties), coupled with harsh conditions in the commodity markets.

Meanwhile, two and a half years after it was closed down by the Environment Agency, Stakksberg is still trying to sell the beleaguered United Silicon smelter in Helguvik in southwest Iceland. And the PCC problems probably haven’t helped.

On 13 February, I wrote a blog about Iceland’s oldest aluminium smelter, Straumsvik, being under threat of closure. The price of aluminium was very low and the owner, Rio Tinto, said that the Iceland smelter had “uneconomic energy costs”. The smelter was constantly making a loss and production was going to be cut by 15% this year.

Since then, COVID-19 has become a pandemic with countless repercussions for society and industry. Aluminium supply has exceeded demand for some time and industry-wide demand is expected to fall by 8% this year. Car manufacturers, which usually are big buyers, are having to deal with workers in quarantine, curfews and reduced demand for new cars, and companies such as Ford, Peugeot and Volkswagen have already reduced their output.

Aluminium production currently stands at being in excess of 6 million tonnes per year, but if uneconomic aluminium smelters are closed the excess will be reduced to around 4 million tonnes.

According to a report in the Icelandic media (in Icelandic), closing a smelter is an expensive undertaking and the smelter is still tied to its energy contract. One of its (unnamed) interviewees says that the smelter was running at such a loss that it would almost be more economical to pay the electricity cost and close the plant, and that the chances of the Straumsvik plant being closed have increased.

Norwegian company Hydro also say they are considering closing one of their 6 smelters in Norway. The smelter at Årdal mainly makes aluminium for the car industry.

 

 

 

Last week, an Australian tourist died at a hospital in north Iceland. He was admitted when seriously ill, and it turned out that he had the COVID-19 virus but didn’t how typical signs of it. Initially, hospital staff said it was unlikely that he died of the virus but they have now changed their mind, saying that he DID in fact have a severe case of pneumonia, which virus victims may get if badly affected.

The tourist had been travelling around Iceland for a week with his partner. Was he aware of where to go for help? Has anyone has looked into the proportion of “foreigners” and tourists globally who may not know what to do/ where to go in crisis situations, let alone have constant access to hand sanitisers or soap. (Rough sleepers also are unlikely to have access to hand sanitisers or soap, let alone being able to self-isolate away from others, but that’s another story.)

If staying in hotels or guesthouses, the staff should be able to help tourists in trouble, telling them where to find help, etc. But in the case of flats such as Air BnB, there is no guarantee that any such information would be available for guests.

And migrants who do not speak the language of their host country – for instance, many Polish people in Iceland do not speak either Icelandic or English – may also have trouble finding out about latest developments such as bans on gatherings over a certain number, or whether or not to send their children to school. The Icelandic website that gives up-to-date information on the virus, covid.is, is in Icelandic, English and Polish, but is not much use for speakers of other languages.

Although this blog was sparked by COVID-19, it is actually applicable to any health crisis. Crucial information is often not available for everyone, and in some cases elderly family members come to join their family but do not go to school or work and have limited social opportunities and may only speak their heritage language – in which vital information may not be available.

Update 23 March: The Icelandic media reported today that in Sweden,  out of the 27 fatalities due to COVD-19, 6 occurred in people with a Somalian background. The Swedish association of Somalian doctors said that lack of information in Somalian had undoubtedly been partly responsible for the high number of fatalities.

 

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Rio Tinto, owner of Iceland’s oldest aluminium smelter at Straumsvik, has just announced that they will do a strategic review of their Icelandic smelter, as historically low aluminium prices and an “uneconomic energy costs” means they are making huge losses.

They say there is a possibility that the smelter will be closed. The Icelandic company running the smelter, usually known as ISAL, had already announced that production would be cut by 15% this year. Last year, the Straumsvik smelter made a loss of ISK 10 billion ($78.7 million).

Hördur Arnarson, CEO of Iceland’s national power company Landsvirkjun, says he doesn’t think that the price ISAL is paying for electricity is too high. Before he took over as CEO, Landsvirkjun were constantly making a loss, which was partly attributed to low prices to large users such as smelters. Over a period of time, each smelter then negotiated an electricity price for its operations – this was done for the Straumsvik smelter in 2010 – and Landsvirkjun’s finances improved.

Electricity prices for heavy industry are generally not publicized, although now both Rannveig Rist, CEO of ISAL, and Arnarson say they are willing to disclose the electricity price that ISAL has to pay. However, Rist says that compared to the other smelters in Iceland, ISAL pays the highest price for its electricity.

Compared to the price that ordinary customers pay, the large customers still get their electricity very cheaply. In an article in the Icelandic newspaper Fréttablaðið, energy specialist Ketill Sigurjonsson points out that Iceland entices companies that use a lot of energy to the country by promising low electricity prices and later – in this case in 2010 – increase the price. He says that an analysis by the CRU Group revealed that Iceland offers one of the world’s lowest power costs and that only in Canada are operating costs lower than in Iceland.

China has also become very important as an aluminium producer, and is now exporting the metal as well as using it in Chinese factories.

Around 500 people work at the Straumsvik smelter. One of the trade union representatives says that they began to get suspicious about what was about to happen when the parent company refused to agree to wage increases last month, even though these had been agreed by the ISAL wage negotiators and the Confederation of Icelandic Enterprise.

The review is expected to be complete during the first half of this year, and the future of the plant will be decided then.

 

Iceland’s Arion Bank, which has a number of holding companies including Stakksberg, the company entailed with the task of trying to sell the silicon metal smelter in Helguvik originally owned by United Silicon and closed down by the Environment Agency (EA) in September 2017, has sent out a statement saying that they have reduced the value ascribed to Stakksberg from 6.9 billion kronur (USD 52.9 million) at the end of March 2019 to 3.2 billion kronur (USD 25.6 million) nine months later.

Stakksberg has been rectifying some of the problems with the smelter identified by the EA, and has been trying to find a buyer for almost two years. The smelter’s original owner, United Silicon, went bankrupt in January 2018, but in December 2017 they too were searching for buyers.

According to Stakksberg’s homepage, the idea was to have the smelter up and running in the last quarter of 2020.

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Arion Bank says that because of “uncertainty in the market, several manufacturers have reduced their production or closed smelters. Thus unused manufacturing capacity is available that might well have a negative effect on the sale of the silicon metal smelter in Helguvik”.

If they have done their homework, potential buyers – if there are any – would be aware of the problems faced by PCC Bakki Silicon in the north, who asked for more funding last year. PCC have also had unexpected problems with Iceland’s winter weather, and say that the problems they have encountered were not those they were expecting – despite using best available technology, etc. None of this would be of any comfort to prospective buyers of the Helguvik smelter down south.

People involved in ASH, the campaign group against the reopening of the Helguvik silicon smelter, are overjoyed however, as there was a lot of opposition by locals to the smelter during the short time that it was operating.

It’s not just the silicon metal industry that is facing problems. Because of worsening conditions in the aluminium market, which are “very demanding”, Iceland’s oldest aluminium smelter is going to operate at 15% reduced capacity in 2020, with a corresponding decrease in electricity use. The plant is currently Iceland’s second largest user of electricity.

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This smelter, which is situated on the outskirts of the capital city, is currently owned by Rio Tinto Alcan but was searching for a new owner two years ago. Norsk Hydro was going to buy it but the sale fell through seven months later.

Update, 12 February 2019: Rio Tinto has just announced that it will do a strategic review of its Icelandic smelter at Straumsvik, due to high electricity costs – which Icelanders consider are actually very low – and “historically low” aluminium prices. They may even close the smelter. The review is expected to be completed within the next few months.

 

The Scan4Chem app, which was originally launched in Denmark in 2014 under the name of Tjek Kemien, has been replaced by a new version which this time will be Europe-wide.

Jointly developed by Germany, Sweden, Latvia, Austria, Spain, Poland, Czechia, Croatia, Portugal, Greece, France and Luxembourg as well as Denmark, the new version was launched in Sweden, Luxembourg and Germany in November 2019 but was launched this week in the other countries involved. During the next three years, the app will be developed for other countries so that eventually almost every European country will have its own version. The app is available from App Store and Google Play and is free of charge.

Originally, the app was developed by Danish Consumer Council Think Chemicals (DCCTC) and the Danish Environmental Protection Agency, but now is being coordinated by AskREACH. Now, “500 million Europeans will be able to use the same app”, says Danish Environment Minister Lea Wermelin.

Suppliers of articles containing SVHCs (Substances of Very High Concern) have a duty to inform a consumer, if asked, if an SVHC is present at a concentration above 0.1 %, and the consumer must receive an answer within 45 days.

By scanning the barcode of a product, consumers send a request to the supplier to obtain information about the presence of SVHCs in the product concerned. The app scans information provided by the company about the product and can give the consumer an answer immediately. If information is not available for the product, the company will be notified via the app that information about the product concerned must be provided.

Consumers Europe-wide can help each other, says Anja Philip, President of the Danish Consumer Council: “If a German consumer has received an answer about a product, and if it is placed in the database of the company, then a Danish consumer will get the answer immediately when the product is scanned in Denmark.”

Products such as clothing, furniture, toys and electronics can be scanned with the app.

Claus Jørgensen, head of the DCCTC project, says that the original app was downloaded about 40,000 times and that when the app was overwritten, “officially yesterday”, they still had “between 500-1,000 scans per month” for the Danish app.

He says he believes the app “has raised awareness among consumers and companies. Unfortunately, companies chose to answer ‘around’ the app, so that the consumer received the answer, but the answer was not stored in our database for the benefit of other consumers scanning the same product”.

This was the reason for the development of the app Europe-wide, says Jørgensen: “The companies will now face many requests and it will be easier for them to put the data in the database than answering each person individually.”

At least 3 million European consumers are expected to download the new app, although potentially half a billion could do so. AskReach say that 13,460 have downloaded the app for Android and iOS in Sweden since it was launched there two months ago, but it has not been heavily promoted because they want to make improvements first.

Note that the app is not available for the UK – and whether it will eventually be available with Brexit about to happen is an interesting question.

A shorter version of this appeared today on the ENDS Europe website.