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Blue Lagoon, Iceland. This is a geothermal spa and one of the most popular tourist attractions in Iceland. It is located in a lava field near Grindavík on the Reykjanes Peninsula, about 39 km from the capital city of Reykjavík1. The milky-blue water of the lagoon is rich in silica, algae, and minerals, and has a temperature of about 37-40°C.