Good access to hydropower and geothermal heat means that Iceland can have low electricity prices, which has been used for investments in power-intensive industries, such as aluminum production. With the help of foreign investment in the industry, Iceland has developed into one of the world’s largest aluminum producers.
The first aluminum smelting plant started in 1969, the second in 1998. The aluminum industry’s capacity increased sharply in 2008, when the country’s third and largest smelters reached maximum capacity. It is located in Reyðarfjörður in eastern Iceland and receives its electricity from the disputed hydroelectric power plant Kárahnjúkar (see Natural Resources and Energy).
The raw material for aluminum production is bauxite imported from Australia and the finished product is mainly exported to Europe. There is also an Icelandic smelting plant for the production of silicon iron.
Fish processing is traditionally the most important industry with, among other things, freezing plants, salts and canning factories. The fishing industry also creates employment in areas such as shipbuilding, repair, maintenance and development of modern technology.
- COUNTRYAAH: List of top trading partners of Iceland. Includes countries that imported most shipments from and exported most goods to the country.
Iceland is a prominent IT nation with one of the world’s highest proportions of computer and Internet users among the population. In the country advanced software for export is produced. Iceland is also successful in biotechnology and pharmacology. One of the world’s leading gene research companies, deCode Genetics in Reykjavík, conducts research on hereditary diseases.
Textiles and clothing, furniture manufacturing as well as the chemical industry and cement manufacture are among traditional Icelandic industrial branches.
Fishing exports to Russia are stopped
Russia’s import ban on certain goods from the EU is hitting Iceland, when important fishing exports to Russia are stopped.
Iceland violates fishing ban
The government announces that Iceland will not follow the fishing ban decision in the northernmost part of the North Atlantic, which the Arctic states Norway, Denmark, Canada, Russia and the United States recently took. Iceland says it did not participate in the discussions that preceded the ban and will therefore continue fishing in the waters closest to the polar area.
The government abolishes capital control
The bourgeois government announces that the capital controls introduced during the 2008 crisis that prevented foreign companies from moving capital out of Iceland should be abolished. In recent years, capital controls have been inhibiting for Icelandic companies with interests abroad and discouraged foreign companies wishing to invest in Iceland.
Rapid economic recovery
Official statistics show that Iceland’s gross domestic product (GDP) is again at the same level as before the 2008 financial crisis.