Report Confirms that Pricing Policy is not Competitive

Norðurál regards the newly published report by the Fraunhofer Institute of Germany, written for the Icelandic Ministry of Industry and Innovation, as generally helpful, and believes that the Ministry’s request for an independent study of the impact of electricity prices on the competitiveness of Iceland’s energy-intensive industry is a positive step. Energy-intensive industry is fundamental to the Icelandic economy and is heavily dependent on the competitive pricing of electricity.

The Fraunhofer report confirms Norðurál’s previously stated position, namely, that on average, electricity prices in Iceland have been competitive in the past. The Report also confirms our position that at present, prices and pricing policies are not competitive with neighboring markets, such as Norway and Canada.

Norðurál whole-heartedly agrees with the Fraunhofer Report’s call for increased transparency in the Icelandic market for energy. To encourage the process of developing a healthy and transparent energy market, the Company has therefore requested that the confidentiality clauses of its long-term energy contracts with all principal suppliers be rescinded as soon as possible.