Landsvirkjun and Rio Tinto officials signing the amendment to the power purchase contract. Credit: Landsvirkjun.

Rio Tinto and power supplier Landsvirkjun have reached an amended agreement that will enable continuation of operations at the ISAL aluminium smelter in Iceland for the coming years with an “improved competitive position”.

Wholly-owned by Rio Tinto, ISAL employs around 500 workers on site.

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The latest agreement is set to deliver a competitive power price and energy flexibility that is mutually beneficial for both the smelter and Landsvirkjun.

The agreement between the two companies dates back to 2010.

Rio Tinto Aluminium chief executive Alf Barrios said: “We are pleased to have reached an agreement on a power price that, coupled with improved efficiencies we have delivered at the site, makes ISAL more competitive.

“This provides a stronger footing to continue operations at the smelter and gives increased security for the team at ISAL, who have been doing an outstanding job in challenging conditions.

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“We will continue to work to strengthen ISAL’s future in order to keep supplying low carbon aluminium to customers in Europe and North America, and making a significant contribution to Iceland’s economy.”

Rio Tinto has also decided to withdraw a complaint filed with the Icelandic Competition Authority last July regarding the energy supply for the smelter.

In a separate development, US District Judge Steven Logan said he would not stop the US Forest Service from transferring land in Arizona to Rio Tinto for its Resolution Copper project, Reuters reported.

Native Americans said that the land, which is owned by the government, has religious and cultural import.

Logan said that the Native Americans group who brought the suit lacked standing and the government has the right to give the land to whomever it selects.

Under the new ruling, the land transfer is expected to take place next month.