Tomahawk, WI 01/22/2014 (BasicsMedia) – Greenland government is seeking investors’ interest from the U.S. to Asia in its efforts to improve the economy of the island. The world’s largest island is the home for a variety of untapped heaves of rare earth elements which could now be employed in the productions of goods varying from hybrid cars to mobile phones and batteries. The government expects to double the economy of the island within the next decade with such initiations. Alcoa Inc (NYSE:AA) also has been on the lookout for exploring opportunities to build a facility in the region since 2007.

Smelter in Greenland

Alcoa, the largest producer of Aluminum in the U.S., has proposed its plans for building a smelter which would expectedly produce 340,000 metric tons of the metal every year. The company has been in talks with the self ruling government of the place. The talks which were till date, on informal terms, are starting to take the shape of formal meetings.

Greenland’s Finance Minister Vittus Qujaukitsoq is expected to soon initiate formal talks with Alcoa on building a smelter. In an interview in Reykjavik, he said that during a visit to Iceland, the two parties have had discussions on the matter. He is hopeful that the negotiations with Alcoa will soon be initiated by the metal producer as they had been anticipating for a long time. In its pursuit to improve the island’s economy, the government of Greenland has also adjusted some of the rules to set them in favor of the investors. A lift on the ban of uranium mining is a strong step taking by them in this direction.

Aluminum prices concern

Amidst surging production in the Middle East and China, Aluminum prices haven’t yet fully recovered after the financial crisis. The international demand has outdone production demands for a long period of nine years. To counteract, Alcoa has been shutting down high cost smelters globally. The company has been focusing towards investments in more productive units. Back in 2007, Alcoa had agreed to conduct a viability study with the Greenland Government. The preliminary plans included the building of a hydropower plant to amass energy for the smelter. If things work well, production could begin from this year itself. With this, the Greenland government anticipates generating around 650 employment opportunities for its people in the Alcoa factory.

In a statement, Alcoa said that Aluminum demand will rise by 7% internationally in 2014. Alcoa reported a net loss of $2.34 billion in its fourth quarter. This is in contrast with the $242 million net income that it reported in the last year.

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