The municipality of Norðurþing is facing significant financial strain from the halted operations at PCC BakkiSilicon. The closure of the silicon plant at Bakki is estimated to cost the municipality 700 million ISK (about €4.6 million), largely in lost revenue and associated economic activity. RÚV reports that Mayor Katrín Sigurjónsdóttir expects practical solutions from the government’s working group of five ministries, which is due to deliver recommendations next week.
The PCC plant suspended production earlier this summer, leading to the loss of more than 100 jobs after two rounds of layoffs. The company has cited global market instability and the lack of protective tariffs on European silicon as reasons for the shutdown. While PCC’s German parent company has stated its intention to restart operations if conditions improve, uncertainty remains high.
In response, Norðurþing officials are pushing ahead with new opportunities for the Bakki industrial site. As reported earlier this week by Húsavík.com, the municipality recently signed a memorandum of understanding with British-Norwegian firm GIGA-42 Ltd. to develop an artificial intelligence data center at Bakki. The proposed project could bring up to 80 permanent high-tech jobs once completed, with construction expected to begin in 2026.
Municipal leaders emphasize that the unique energy and location advantages at Bakki, including access to geothermal power, efficiency in Iceland’s cool climate, and potential for reusing excess heat, make the site attractive for innovation beyond heavy industry. The AI data center is one of several projects now being considered to diversify the local economy.
Despite the setbacks from PCC’s suspension, Norðurþing officials remain optimistic that Bakki can continue to play a key role in the region’s future. As Mayor Sigurjónsdóttir noted, the municipality is committed to working with the government and private partners to ensure long-term stability and growth for the community.
