An old prophecy had said that once three specific things had happened in Vestmannaeyjar, pirates would again raid the island. Those three things were first, that the town would extend west of the landmark, Hásteinn, second, that the freshwater pool of Vilpa would no longer be in use, and third, that the son of a bishop would be ordained as a priest for the island. Early in 1973 these three things came to pass: the town extended west of Hásteinn, the Vilpa pool was filled in after the drowning there of a young child, and Karl Sigurbjörnsson, the son of a bishop (and the present bishop of Iceland) was given a position of service at the church in Vestmannaeyjar.
Actually, pirates did not raid the island again but another catastrophe hit instead, in the form of a volcanic eruption. In the early hours of the morning of January 23, 1973 a large erupting crevice tore open the earth on the east side of Heimaey. Fortunately, the winds that morning were favorable, blowing from the southwest and thus carried the fire and ash mostly away from the town. Because of stormy weather the day before, all of the island’s fishing fleet was in the harbor so that most of the inhabitants were able to be quickly ferried to Þorlákshöfn. Many were also flown to Reykjavík. Only 500 stayed behind, which included the police, the members of the fire department and others who remained because of the jobs they held. The evacuation to the mainland went extremely well and everything possible was done to accommodate the islanders there. In addition, a special fund was established that was intended to compensate for most of the damage and loss that the islanders had suffered.
The eruption lasted until July 3rd, when it was officially pronounced as being over. The damage was overwhelming. Nearly one-third of all the homes and buildings had burned or been covered under the lava and ash. A thick layer of ash covered nearly the entire island, especially the part of town nearest the crater. Immediately in the summer of 1973, clean-up and reconstruction plans were implemented and the townspeople started to return to the island. It was decided that the schools would open in the fall. Many islanders who had lost their homes in the eruption decided not to return, but in their place a large group of new people arrived on the island, full of energy and an interest in participating in rebuilding the town.
After the eruption, the landscape was drastically changed. Lava covered the oldest part of the town and the size of the island had increased by more than two square kilometers. The harbor entrance barely escaped being blocked due to the lava flow, but in the end was even more protected. The eruption also provided unlimited landfill materials of which there had been a shortage before. And last but not least, for several years heat from the lava was harnessed and used to heat the homes in the town, which led to an eventual unified system of heating on the island.