The temporary shutdown of the PCC Bakki Silicon plant near Húsavík has raised concerns about the long-term impact of industrial closures on local communities. RÚV reports that Norðurþing municipality could lose around 700 million ISK in revenue due to the halt in operations, forcing difficult decisions on whether to cut services or find new income.
“This is a very serious situation for Norðurþing,” said Mayor Katrín Sigurjónsdóttir earlier this month. “Altogether, this amounts to around 700 million ISK for the municipal and the Port of Húsavík, which we must respond to either by raising revenue or making cuts.”
Economist Vífill Karlsson of Bifröst University told RÚV that the effects of such closures go far beyond lost wages. “It’s not only the employees. These companies buy services from others, so there are indirect jobs at risk as well. Beyond that, it affects expectations of residents – their belief in the community’s future,” he explained.
The situation recalls other troubled industrial projects in Iceland, such as the ill-fated Helguvík ventures where investors lost tens of billions of ISK. Arion Bank alone lost 22 billion ISK with United Silicon’s bankruptcy, while Norðurál’s unlaunched smelter project in Helguvík ended in losses close to 20 billion ISK.
While there is still hope PCC Bakki will restart, Karlsson warned that the highly specialized buildings and equipment may prove difficult to repurpose. Past examples show that reusing large industrial facilities can take years or even decades. “We are essentially undermining growth opportunities if such investments go unused,” he said.
