The 322,000-metric ton Fjaroaal aluminum facility (Fjaroaal means "Aluminum of the Fjords" in Icelandic) is scheduled to begin production in 2007. Alcoa officials tell GlobeSt.com that the size of the facility is not yet being released.

"The Fjaroaal plant is an important element of Alcoa's growth strategy in primary metals," says Alain Belda, Alcoa chairman and CEO. "Across our entire primary metals portfolio, we are taking action to move our production assets down the cost curve while maintaining return on capital targets. As we explore new projects around the world, we will continue to reassess our existing smelting portfolio, particularly in the United States, where escalating energy and labor costs have made many smelters less globally competitive.

The development is part of a government-sponsored economic plan to improve the country's living standards by creating roughly 450 directly related jobs and approximately 300 ancillary positions. Iceland has seen declining employment and out-migration as traditional jobs in fisheries and farming have declined. The project will create hundreds of construction jobs in the region, helping fuel economic growth. Smelter construction is scheduled to begin in early 2005.