Conflicting reports on energy prices paid by Alcoa to Landsvirkjun

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Conflicting reports on energy prices paid by Alcoa to Landsvirkjun

The Icelandic National Broadcasting Service, RÚV, reports on a controversy surrounding information published in Brazil concerning energy prices which the aluminium conglomerate Alcoa pays to suppliers.

According to RÚV, an article published in a Brazilian newspaper, and which appeared on Alcoa's website in Brazil, claimed that Alcoa was paying USD 30 per megawatt-hour of electricity in Brazil, twice the rate in Iceland. The article appeared to quote Alcoa chairman and CEO Alain Belda as a source of price information. It was removed from Alcoa's Brazilian website after employees of Alcoa in Iceland complained.

According to RÚV, Alcoa issued a statement yesterday saying this information was wrong and apologising the Icelandic national power company, Landsvirkjun, because of the apparent breach of confidentiality. The price Alcoa pays Landsvirkjun for electricity is confidential.

RÚV quotes Sigurdur Jóhannesson, an economist at the Institute of Economic Studies at the University of Iceland who has studied the commercial terms between Landsvirkjun and its industrial customers. Sigurdur said that the price information in the Brazilian article was "not far from from [the actual prices]."

According to RÚV, Erna Indridadóttir, a spokesperson for Alcoa in Iceland said the information published in Brazil was "wrong and the comparison misleading, in spite of having come from the chairman and CEO of Alcoa."

Disclosure: Sigurdur Jóhannesson is the chairman of the board of Útgáfufélagid Heimur hf which publishes Icelandic Review.