Musings, politics and environmental issues

Posts tagged ‘Environment Agency’

Difficult silicon market hinders sale of Helguvik smelter

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.


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.


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.


Fire at PCC silicon smelter

The Icelandic media have just reported that a fire broke out last night at the PCC silicon smelter at Bakki, Husavik. The fire was in the furnace building and lasted about three hours. No one was hurt.

PCC have not put any news on their website since 8 June, so I don’t know whether it’s actually been operating as their last news said that they intended to start up the furnace again after midnight, i.e. June 9. I emailed them two weeks or so ago to ask if the reason nothing new was on their website was because nothing newsworthy was happening, but they didn’t reply. They had generally reported when the plant was being started up again but this time they didn’t.

Perhaps now the Environment Agency will start looking more closely into the operation at Bakki.

Today is the deadline for comments on the scoping document for improvements to the United Silicon plant which the company Stakksberg are overseeing. Stakksberg was set up specifically by Arion Bank for the process, as it is intended to sell the plant and get it operating again, though probably this will not happen before 2020. Karen Kjartansdottir, who was in charge of publicity for United Silicon, is now doing the same for Stakksberg.

Fire in silicon smelters is not unheard of, at least not in Iceland, as three fires occurred in the United Silicon plant at Helguvik, southwest Iceland, before the plant was eventually closed by the Environment Agency. Activists from ASH, the group opposed to heavy industry at Helguvik, are not surprised by the fire at Bakki – the best possible technology was supposedly being used at Bakki but STILL a fire can occur.

Problems with the United Silicon plant were partly attributed to the owners using a mismatch of equipment. But it appears that silicon smelters are proving more of a problem than the Icelandic authorities – not to mention the Icelandic government –  originally thought.

Stay tuned – this blog will probably get updated.

Update: PCC Bakki are on Facebook.  They have news (in Icelandic) there, including about the fire. They want to start up the other furnace as soon as possible while the other is getting repaired/checked. They have also now (mid-afternoon Tuesday) updated the news page on their website with information about the fire.

Update 19 July: They have still not started up the smelter again. “It is clear that changes have to be made,” they say.

Update 25 July: They began to start it up again yesterday morning (the process has to be done gradually), but shut it down 8 hours later due to a leak in the cooling system. They warned that villagers might be aware of odour.

Lead-up to United Silicon’s Helguvik smelter criticized

Iceland’s National Audit Office has strongly criticized the actions – or lack of actions – of various government bodies during the period leading up to the start-up of the silicon metal plant run by United Silicon which was eventually closed by the Environment Agency on September 1 last year.

The report (in Icelandic) was submitted to the parliamentary Althing at the end of last week, as it was Vidreisn MP Hanna Katrin Fridriksson who had requested the investigation. Many points came up in the report, some of which were foreseeable and known while others were not.

The Audit Office say that the issuing of concession agreements should be refined in future. They say that those responsible for issuing operating licences (i.e. the Environment Agency) and concession agreements (the Government) must ensure beforehand that the operators of polluting industries can verify their ability to manage such operations and the truth value of the information presented.

They say that the environmental impact assessment (EIA) included air pollution dispersion forecasts that were purported to come from a Danish engineering consultancy, COWI – but, just before the EIA was presented, COWI said they had nothing to do with the making of the model and wanted their name removed. The EIA also did not mention odour pollution and the reasons for it were never explained fully, apart from irregular operation of the arc furnace. They say the the Planning Agency must think about how to react in cases of conceivable deviations from the EIA, especially when a plant is in close proximity to a residential area (as was the case both with United Silicon and the PCC plant in North Iceland that has just started operating).

According to the report, the plant was not fully completed when operations started and the compulsory pre-startup visit by the Occupational Safety and Health Authority did not take place until after operations had started. The plant’s buildings were not in accordance with existing planning regulations, visual pollution was greater than expected (probably due to two buildings being higher than planned) and the plant was not operated in accordance with the EIA, the operating licence or the aims of the concession agreement.

The capital requirements were also underestimated. When the concession agreement and profitability analysis were being prepared, all available data and information came from the company itself, and the information on the owners and administrators was unclear.

The newspaper Fréttablaðið covered the report in some detail and also dug up the following: If the owners had been investigated beforehand, it would have come to light that one of the owners, Magnus Gardarsson – who was fined for speeding last year and also charged with embezzlement and forgery – had been made to resign from COWI for misusing his position as an employee there, and also that a company owned by him had been fined for violating the rights of employees.


End of United Silicon

The end has come for United Silicon. They have requested bankruptcy. The moratorium they were given ends today, and last night the Icelandic press reported on latest developments.

This is what has happened over the last few days. United Silicon had written a letter to the Environment Agency (EA) dated 16 January, detailing what they were planning to do, and said they hoped that some of the required rectifications could be carried out after the plant was in operation. Three days later, the EA replied (Norconsult’s report in English follows on from the EA’s Icelandic text). They had enlisted the help of Norwegian consultants Norconsult (United Silicon had been using the Norwegian engineering firm Multiconsult) and said that virtually all of the items in the company’s improvement plan must be carried out before another start-up could be considered, including erection of a smoke stack/ chimney to reduce the odour problems experienced by local residents (the company had hoped to do this once the plant was in operation).

Erection of the chimney, not to mention the other modifications needed, could take up to two years and would be expensive, plus a new operating licence and environmental impact assessment would be needed. After receiving the letter from the EA on Friday, the company realised that future operation would not be feasible, and that the probability of a company buying the plant was almost non-existent, and requested bankruptcy.

This morning, Iceland’s National Audit office announced that they are following up on a request by parliamentarian Hanna Katrin Fridriksson into how the Icelandic State has been involved in the United Silicon affair, from investments, environmental impact assessment, issuing of the operating licence and assessment of the plant on the health of local residents. They intend to produce the report by the end of March.

Since the plant’s operation was stopped on September 1, Arion Bank has been paying salary costs of 55 employees and also for the cost of necessary research.


Buyer wanted for United Silicon’s plant in Iceland

Norwegian consultancy Multiconsult say that Euro 5 million will need to be spent on the beleaguered silicon metal plant in Helguvik, Southwest Iceland, if it is to meet the criteria imposed by Iceland’s Environment Agency to bring it back into operation. However, an additional Euro 20 million will be needed to bring it up to Best Available Technology standards. Apparently the furnace itself is well designed and good quality, but the associated equipment is cheap and inferior and the cause of frequent mishaps and the main cause of the odour pollution found in the locality.

United Silicon have clearly had enough and are looking for buyers. Eight to ten companies have supposedly expressed interest in buying the plant, including several big names in the industry. United Silicon say that talks will start in the new year with prospective buyers.

Meanwhile, the PCC silicon metal plant in North Iceland is facing delays because of construction delays. It will not start operation until some time in February, but was originally meant to start up in mid-December.

200 substances emitted from United Silicon’s smelter, but results inconclusive

United Silicon must be facing a difficult decision. The Norwegian company NILA released their final report yesterday with the results of their research on odour-causing pollutants that have emanated from the beleaguered silicon metal smelter at Helguvik, Southwest Iceland. The report states that about 200 different compounds are emitted from the plant, including some that can create odour, but none of them are released in sufficient quantity to produce the odours about which local residents have complained.

But the Environment Agency (EA) say that they received few complaints on the days that the monitoring was taking place, which would not help in producing required results. Members of the local council are also amazed about why readings were not taken at times when the odours were worst.

As before, NILA are most concerned about anhydrides and formaldehyde, but say it is difficult to monitor these substances. Formaldehyde is highly volatile and cannot be monitored with the equipment used in July, so the EA monitored it with different equipment in August. They detected it in the exhaust from the plant but not from the residential areas. Anhydride was then measured separately by NILA and a considerable amount was found at the plant inside the baghouse, but the actual concentration of anhydride was uncertain. Anhydride can cause temporary irritation of eyes and respiratory tract, like those that local residents have experienced. NILA recommend further testing.

And that’s the problem. To do so requires the plant to be operated, and the EA closed the plant down on September 1. They will only allow the plant to start operating again when they are satisfied that each of the deviations they identified in the plant’s operation have been fixed. And United Silicon can’t fix the odour problem without operating the plant, which they’re not allowed to do.

It’s a chicken and egg affair. And remember that when the EA allowed the plant to start up again after the last fire there in August, supposedly on a temporary basis of a few weeks, they did so on the premise that odour-polluting substances would be monitored and put an end to the problems that local residents have had to put up with. Which didn’t happen.

I have a feeling that the company will give up in December – their problems must surely be insurmountable.

Former United Silicon owner charged with embezzlement and forgery

Remember Magnus Gardarsson, ex Board Member of United Silicon who was taken for reckless driving and speeding earlier this year – in fact many times, here and abroad – in a Tesla electric car? He left the company in April, and has now virtually disappeared, or at least is overseas and not responding to media enquiries.

He’s in the news again at the moment. The United Silicon plant is not operating at the moment as the Environment Agency finally said NO on September 1, there had been too many aberrations from the operating licence and the repairs were not helping in any way.  But the company has kept its employees as it still hopes it can restart when its technical problems have been sorted out, and it has even recruited a few more, like press officer Karen Kjartansdottir who is obviously meant to smooth out the company’s image. (She, by the way, had been recruited for a morning programme on national radio but resigned “for personal reasons” before taking on the job. A few days later she was working for United Silicon.)

Besides trying to sort out the smelter’s technical problems, staff are also attempting to sort out the company’s financial mess, as they have been given an extension of a few months to the payment difficulties they experienced when building subcontractor ÍAV took them to arbitration. As part of this, they have discovered that Magnus Gardarsson had been (albeit very professionally) swindling the company since he co-founded the it in 2014, even continuing after he left the Board on April 6. He has taken over ISK 1.5 billion kronur out of the company by sending in pseudo-invoices, etc. The company sued him yesterday for large-scale embezzlement and forgery, while Arion bank, which now owns up to 67% of the company, and three pension companies are seriously thinking about suing him too. The pension companies own most of what Arion doesn’t.

United Silicon’s workforce of around 80 is mostly made up of foreigners, although that was not the original idea. It’s ironic that one of the reasons for the plant’s location was to provide employment for locals, as unemployment was a problem at the time in the area. But the situation has changed, mostly because of the nearby airport and Iceland’s tourist industry, so that now airport personnel as well as smelter personnel are being recruited from overseas as otherwise they cannot fill the positions.

The soon-to-be-opened PCC silicon plant in North Iceland is also having difficulties recruiting non-professional staff. So at least if United Silicon gives up or is closed for good, it’s workers can go and work in the north instead – until that plant too ends in difficulties!