24 May 2000
A. INTRODUCTION

1. The Noral Project (the Project) has been in progress for some years and was formalised on 29 June 1999 in Hallormsstaður in the form of a Declaration between the Ministry of Industry and Commerce on behalf of the Government of Iceland, Landsvirkjun (the National Power Company), and Hydro Aluminium as of Norway. The Declaration described the underlying business concept of the Noral Project which includes an aluminium plant, the necessary infrastructure and the power system to supply the aluminium plant with electric power as well as the development of site, harbour and necessary infrastructure. The parties to the Hallormsstaður Declaration together with Reyðarál hf (a special purpose company owned 50/50 by Hæfi hf and Hydro Aluminium as) and Hæfi hf (a special purpose company owned by a group of Icelandic investors) have decided to revise the scope and time schedule for the Project. This new declaration is issued to confirm the interest and commitment of all the parties to evaluate the feasibility of the Project and their intention to reach a final decision on whether or not to go ahead with the Project by 1 February 2002.