Elkem and Landsvirkjun agree long-term PPA for Iceland ferrosilicon plant
- The PPA is take-or-pay, covers 127 MW and remains in effect until 2039.
- From April 2029 the power price will have a fixed floor and a partial link to the ferrosilicon market, sharing upside while protecting competitiveness in low-price periods.
- The agreement increases operational flexibility and is a key factor in the strategic review of the Iceland plant announced in Q2 2026.
- Elkem Iceland operates three furnaces, employs approximately 160 people, and has an annual capacity of 120,000 metric tonnes.
Deal terms
Elkem and Landsvirkjun have signed a new take-or-pay power purchase agreement covering a contracted volume of 127 MW that supersedes the prior arrangement and remains in effect until 2039. From April 2029 the price mechanism will include a fixed floor and a partial link to the ferrosilicon market so both parties benefit from higher product prices while preserving competitiveness in lower-price periods.
Commercial and strategic impact
The PPA provides enhanced operational flexibility and greater visibility for the plant, supporting performance improvements and strategic option assessment. The agreement is highlighted as an important element in the ongoing strategic review of the Iceland plant announced in the second quarter of 2026 and in evaluations of alternatives to secure viable operations.
Plant profile
Elkem Iceland operates three furnaces, employs approximately 160 people, and has an annual production capacity of 120,000 metric tonnes, making it one of the world’s largest ferrosilicon facilities outside China. Its products are primarily supplied to customers in Europe, Japan and North America and are used across automotive, construction, renewable energy and defence sectors.
Source: Elkem