ICELAND’S PARLIAMENT HAS GIVEN final approval to a plan to build a hydro power plant and an aluminum smelter by the US aluminum giant Alcoa Inc.

The decision to approve the project came amidst intense criticism from environmentalists. Legislators voted 41-9, with one abstention, to permit the Industry Minister to sign an investment contract with the Pittsburgh-based conglomerate. The project involves damming two rivers to create a 657km2 reservoir above Vatnajokull, Europe’s biggest glacier, in the Eastern Highlands.

Alcoa has been negotiating with Iceland’s government for more than a year over its plan to build the hydro power plant and smelter in the country’s rugged Eastern Highlands. In August 2001, Iceland’s State Planning Agency vetoed the project citing possible environmental harm, but the 5Environment Minister overruled the Planning Agency decision.