Somehow mining bauxite on one end of the earth to transport it to a remote location like Iceland where it is smelted only to be exported to yet another part of the world doesn't seem like the best model. Aside of the fact that Iceland doesn't use it's 'energy resource' for this, it is creating new energy sources in the form of large hydro at the cost of its natural capital, because nothing else is cheap and reliable enough. As Iceland has to compete with low cost countries who subsidise their energy, these smelters will never provide large scale, well-paying employment for Iceland's population. The country is planning to import the workers to fill most of the positions, probably from Eastern Europe. Not to mention the dependence Iceland is building into its current account balance on the price of aluminium, which is collapsing at this time.

Fortunately, the financial crisis seems to have had a dampening effect on this insanity.