About Norðurál

 

Norðurál is a solid and dependable company. We produce aluminum responsibly, safely, and profitably in harmony with the environment and society.

 

Norðurál Grundartangi ehf. operates an aluminum plant at Grundartangi that produces aluminum and aluminum alloys for the international market. The company has an operating license to manufacture up to 350,000 tons of aluminum each year. The company has facilities at Grundartangi and Skógarhlíð in Reykjavík.

 

Norðurál Grundartangi ehf. is 100% owned by Norðurál, which is 100% owned by the Century Aluminum Company, a company registered in the United States. The Board of Norðurál Grundartangi is responsible for maintaining proper organization and operations, development of long-term objectives, and monitoring the day-to-day operations of the company.

 

Norðurál Grundartangi had a contract with Concord Resources Limited and Glencore International for sales of all aluminum for production and delivery in 2020 and 2021. The contract is based on the market value of aluminum according to the LME (London Metal Exchange), plus a premium for sales across the European Union.

Norðurál’s social responsibility

 

Norðurál is one of Iceland’s largest industrial companies, one of the largest workplaces in the country, and one of the largest buyers of Icelandic electricity. Creating long-term value in a sustainable and responsible manner, for the long term and with a positive impact on society, is at the heart of our corporate social responsibility.

 

Norðurál strives to respect human rights, society, and the environment. Continuous efforts are being made to keep the environmental impact of activities to a minimum and to make better use of energy and raw materials. The safety, health, and well-being of staff is a top priority. We promote the equal right of staff to career advancement, remuneration, and rights, irrespective of their sex, sexual orientation, religion, or origin. We are committed to inspiring our entire value chain and strive to carry out procurement with integrity and in line with the company’s values.

 

Norðurál has introduced strong risk management within the company, where the company’s risks are divided into four categories: business risk, financing risk, operational risk, and environmental risk.

 

Norðurál is heavily dependent on changes in the price of aluminum, energy prices and access to energy, salary costs, and the costs of obtaining key raw materials such as alumina and anodes. Salary payments, taxes, and various other operating expenses are in ISK, while the company’s income is mostly in USD. Adverse changes to these factors may have a considerable effect on the company’s operations.

 

The main opportunities lie in the small carbon footprint of Icelandic aluminum and the country’s geographical location within a market area where demand for aluminum is high.

 

 

Key focus areas:

 

Production in harmony with the environment

We strive to minimize the environmental impact while promoting the responsible use of energy and raw materials. Norðurál promotes increased environmental awareness and staff participation in reforms. Norðurál satisfies the requirements for operating licenses and complies with environmental laws and regulations.

 

Climate action plan

Norðurál has set ambitious targets for reducing greenhouse gas emissions and waste from sources outside the EU Emissions Trading System by 40% by 2030.

 

Targeted environmental monitoring

Environmental monitoring includes approximately 100 parameters for air, sea, fresh water, domestic animals, and vegetation in and around Hvalfjörður. This is done to ensure that the operations of Norðurál do not have a negative impact on the environment. Environmental monitoring is carried out by independent entities.

 

Less waste and better utilization of resources

Norðurál’s green accounting is a detailed record of all materials that enter and leave the plant. Or goal is to reduce all raw material use to the greatest extent possible and to report in detail how we dispose of all undesirable substances.

 

People first

Norðurál conducts its activities and business with respect for human rights. Norðurál emphasizes the equal right of staff to career advancement, remuneration, and rights, irrespective of their sex, sexual orientation, religion, or origin. Norðurál aims for continuous improvements and complies with laws and regulations on human rights and equality.

 

Active participation of staff in preventive measures and improvements

Norðurál prioritizes safety and health. Staff should be familiar with risks and safe procedures, and no work should be carried out in unsafe conditions. Active participation by employees in accident prevention and in making improvements is emphasized. Norðurál complies with all laws and regulations concerning health and safety.

 

Constructive communication

We are part of a larger community that includes our families, our immediate environment, and the environment as a whole. We are proud of our community and want the community to be proud of us.

 

Responsible business practices

Norðurál considers sharing the knowledge of staff with the academic community, as well as the tech and innovation industry, to be part of its social responsibility. By contributing to dynamic cooperation in this field, Norðurál can promote more efficient operations and potentially reduce greenhouse gas emissions.

 

Responsible procurement

Norðurál wants all procurement to be carried out with integrity, responsibility, and efficiency in mind. Norðurál conducts its operations so that procurement is based on quality, environmental, and health criteria. Norðurál aims for continuous improvements and complies with all applicable laws and regulations on procurement.

 

Continuous improvements

There is always room for improvement. Never be complacent. Always seek ways to achieve more success.

 

Period of Significant Changes

 

2020 and 2021 were unusually eventful in various areas of Norðurál’s operations. There were significant changes to the management team, new contracts were concluded, and innovations were launched in product and technological development, human resources, and the information policy. As with other large workplaces, Covid-19 also had a significant impact on Norðurál’s activities.

 

Norðurál energy contracts no longer confidential

 

Norðurál believes that it is natural for there to be transparency about the price that the company pays for energy produced in Iceland, and it is important for discussions about the company’s competitive environment to be based on reliable information. Norðurál consumes around a quarter of all electric power produced in Iceland, and we fully understand that the people of Iceland want a clear picture of how the natural resources collectively owned by the nation are utilized.

 

In November 2020, Norðurál requested the declassification of its power contracts. In 2021, Norðurál’s contracts were declassified with Landsvirkjun, the National Power Company of Iceland, and Reykjavik Energy, and they can be accessed in full here. There is still a confidentiality clause in effect for Norðurál’s 2005 contract with Reykjavík Energy and HS Orka, but the company’s other long-term contracts are accessible to all.

 

The world’s first long-term contract for green aluminum

 

Aluminum under the brand name Natur-Al™, produced by Norðurál at Grundartangi, has a carbon footprint corresponding to 4 tons of carbon dioxide per ton of aluminum, from the acquisition of bauxite to the processing of aluminum oxide and transportation all the way to the buyer. This means that total emissions of carbon dioxide equivalents in the production of Natur-Al™ are less than a quarter of average emissions in aluminum production. This achievement is based on stable operations and strict environmental standards as well as the use of energy from 100% renewable sources.

 

A sales contract for 150,000 tons of Natur-Al™ aluminum over a five-year period was concluded with the Austrian production company Hammerer Aluminium Industries. This is the first long-term contract on green aluminum anywhere in the world. Hammerer Aluminium manufactures construction products and components for electronic equipment, public transport, and cars.

 

Green financing for an investment project worth ISK 16 billion

 

A contract was signed with Arion Bank for the green financing of a new production line in Norðurál’s casthouse. This is an investment project amounting to approximately USD 120 million, or close to ISK 16 billion.

 

The new production line allows Norðurál to produce more and more valuable products from the aluminum processed in the company’s plant. Aluminum bars will be manufactured to meet high demand from European customers, for use in products such as cars, aircraft, buildings, and electronics.

 

No increase in aluminum production is involved, but the aluminum will be processed further to produce a more valuable product than before, as the bars are more valuable than the slabs cast in the current casthouse. With a new production line, significant energy is saved in the molding process, or 40%, and Norðurál’s export revenue will increase by more than 4 billion per year.

 

The construction work will create around 100 temporary jobs, and the new production line will create approximately 40 permanent jobs.

 

New energy supply contract with Landsvirkjun

 

In July, Landsvirkjun and Norðurál signed a new energy supply contract that involves a three-year extension of the previous contract and support for more varied production and future growth. An agreement for more energy supply supports Norðurál’s plans to invest in a new casthouse for producing value-added special products that will further strengthen the company’s competitiveness.

 

The current contract is linked to the Nordic energy market Nord Pool and will remain in effect until December 31, 2023. With the new contract, the contract term is extended by three years, or to the end of 2026, at a fixed price.

 

Changes in the shift system and reduction of working hours

 

To make Norðurál a more family-friendly workplace, May saw the introduction of an eight-hour shift system in the pot room and casthouse instead of the previous twelve-hour system. Steps were also taken to shorten the working hours of day workers. A fifth shift team was added to the pot room and casthouse, which meant recruiting more workers. The change was in line with the collective agreement approved by approximately 90% of the votes cast.

 

Covid-19 measures

 

The Covid epidemic left its mark on Norðurál’s operations in 2021. Norðurál’s activities are exempt from general governmental measures as the company and its activities are defined as being economically significant. Our economic significance provided us with further encouragement to do everything in our power to ensure effective disease-prevention measures. The workplace was divided into 22 disease-prevention areas with limited or no access between them. Strict measures were enacted to protect frontline workers and thus production. Norðurál’s staff were committed to keeping production running during these difficult times, and thanks to their joint effort, operations were maintained without any delays in delivery to customers. We are very proud of this achievement.

 

Changes in the management team

 

During the year, Gunnar Guðlaugsson, Managing Director of Norðurál, was recruited to run Century Aluminum’s plants in Europe and North America. Gunnar’s new title is “Executive Vice President, Global Operations”. In addition to Norðurál, Century Aluminum owns and operates three aluminum plants in North America and an anode plant in the Netherlands. Gunnar has worked at Norðurál since 2008 and has served as Managing Director since 2019. He will continue to serve in that position.

 

Sigrún Helgadóttir took over as plant manager at Norðurál Grundartangi and oversees the day-to-day activities of the plant. In other management changes, Birna Björnsdóttir was appointed manager of the rodding plant and pot room, Guðný Björg Hauksdóttir was appointed head of HR, Guðmundur Óskar Ragnarsson was appointed manager of the casthouse, and Þorsteinn Ingi Magnússon became head of safety, environment and improvements.

 

Certifications, quality standards, customs, and laws

 

Norðurál has ASI certification for environmentally friendly and responsible production, an ISO 9001 certified quality management system, and an environment and safety management system certified according to ISO 14001 and ISO 45001 standards. Norðurál is an equal pay certified company according to ÍST 85:2012, and a recipient of PWC’s Gold Certificate. Norðurál sets out objectives and strategies in accordance with the GRI standard. There is also a focus on four of the UN’s Sustainable Development Goals, in accordance with Norðurál’s focus areas in social and environmental matters.

 

International ASI certification

 

The ASI (Aluminium Stewardship Initiative) is an international association of leading aluminum producers and raw material producers, environmental organizations, and CSR organizations, together with producers of aluminum and aluminum alloy products. The aim of the organization is to encourage corporate social responsibility and environmentally friendly practices in aluminum production and use, from primary raw material processing to final product and aluminum recycling. From mining companies to world-renowned companies in the beverage, automotive, and consumer electronics markets, the association brings together partners from all sectors and from all over the world.

 

In January 2020, Norðurál became the first aluminum company operating in Iceland to receive the international ASI certification for environmentally friendly and responsible production. The certification confirms that the company’s activities and business practices are socially responsible and outstanding in the area of environmentally friendly production.

ISO certifications

 

Norðurál has an ISO 9001 certified quality management system, and an environment and safety management system certified according to ISO 14001 and ISO 45001 standards. The certification extends to Norðurál’s production of aluminum and alloys.

 

ISO standards are based on the so-called Plan-Do-Check-Act (PDCA) philosophy of continuous improvement, and the integrated Norðurál management system is designed to satisfy the requirements of the standards. The first management system audits were conducted in 2012 (ISO 9001) and 2013 (ISO 14001 and ISO 45001). Control systems are maintained through third-party audits twice a year, and periodic internal evaluations.

 

Norðurál is an equal pay certified company according to the ÍST 85:2012 standard, and a recipient of PWC’s Gold Certificate.

Norðurál’s management system consists of various factors, including a quality handbook containing procedures and guidelines as well as a feedback system to record incidents and comments. Comments are followed up on by preventive measures and opportunities for improvement. The management system extends to all Norðurál operations, including both staff and contractors.

 

Norðurál operates in compliance with laws on financial statements, private limited companies, hygiene and pollution control, privacy, and money laundering, as well as general labor laws and national laws. The company satisfies the requirements for operating licenses, complies with environmental laws and regulations, and has signed the Paris Agreement on reduced emissions outside the ETS system.

 

Great emphasis is placed on the quality awareness of employees and staff involvement in matters relating to the environment, safety, health, and human rights.

 

See Norðurál’s policies here.

 

Stakeholders

 

Many aspects of our procedures are the result of discussions and cooperation with stakeholders. Our communication with them is based on a commitment to transparent and honest interactions, and this is an important part of the company’s continued success.

 

Cooperation and procedures, including the frequency of cooperation, depend on the stakeholders and their nature. Communications take place according to a communications plan, and cooperation and construction projects are recorded in Norðurál’s management systems. Our suppliers and contractors must comply with Norðurál’s safety and environmental standards and code of ethics. We appreciate feedback from stakeholders and strive to respond to all queries.

 

Stakeholders are analyzed based on grounds for cooperation and common interests.

 

Northern has partnerships with the following organizations/associations:

 

• (ASI) Aluminium Stewardship Initiative
• The Aluminium Cluster
• European Aluminum
• Festa
• Green by Iceland
• Association of Icelandic Aluminium Producers
• Confederation of Icelandic Employers
• Federation of Icelandic Industries

Ethics and integrity

 

Century Aluminum Company, parent company of Norðurál, and all its subsidiaries commit to the strict application and satisfaction of stringent requirements for honesty, integrity, and propriety in all their operations, transactions, and conduct. All members of management are signatories to the company’s Code of Ethics and committed to maintaining the company’s high standards of honesty and integrity. No employee may promise, give, or accept payments in cash or other valuables, whether personally or through an intermediary, to parties public or private, or to a spouse, partner, or child or other relative of such a party, for the purpose of influencing or rewarding the actions or decision-making of such parties, or to gain any advantage. Stakeholders and employees can report suspected violations to the Compliance Officer (generalcouncel@centuryaluminum.com) or anonymously through an independent third-party reporting system, Ethical Advocate. Reports may be submitted 24 hours a day, 7 days a week, by calling the number 800 9610. When a report has been received, an in-house investigation is initiated.

 

We require all Norðurál suppliers and partners, whether customers, contractors, agents, or consultants, to act with integrity and be honest in their business transactions.

 

Four UN Sustainable Development Goals

 

Iceland is a signatory to the United Nations Framework Convention on Climate Change (the UN climate convention) as well as to the Kyoto Protocol and the Paris Agreement. The UN climate convention is the main forum for the world’s nations to agree on a global response to climate change. It is therefore appropriate for Icelandic companies to follow the government’s plans and try to do better.

 

There are 17 UN Sustainable Development Goals and 169 targets extending to both domestic issues and global cooperation. The goals are integrated and balanced between the three pillars of sustainable development: economic, social, and environmental development.

 

Norðurál focuses systematically on four UN Sustainable Development Goals:

Norðurál’s Equal Pay Certification, Human Rights and Equality Policy, Human Rights and Equality Objectives, and Equality Plan support Sustainable Development Goal no 5, i.e. to achieve gender equality and empower all women and girls.

 

The Safety and Health Policy, Health and Safety Objectives, the Human Rights and Equality Policy, and the Human Rights and Equality Objectives promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.

 

The Quality Policy, Quality Objectives, Environmental Policy, Environmental Objectives, Procurement Policy, Procurement Objectives, Operating License, and Environmental Monitoring have the aim of ensuring sustainable consumption and production patterns.

 

It is necessary to take urgent action to combat climate change and its impacts. The Environmental Policy, Environmental Objectives, Climate Action Plan, Procurement Policy, and Procurement Objectives are Norðurál’s key actions to work towards the 13th Sustainable Development Goal.