Noranda reserves grow twelvefold under new mining lease
The expanded mining lease issued to Noranda Bauxite will give the mining operation access to 12 times the reserves it previously had the rights to exploit, according to Anthony Laura, the general legal counsel and chief legal officer of New Day Aluminum LLC.
The renewable 25-year lease includes lands located in St Ann and Trelawny that will allow Noranda to deliver on its targeted 5.2 million tonnes of bauxite per year, Laura said.
New Day operates Noranda Bauxite in Jamaica, as well as Noranda Alumina based in Gramercy, Louisiana. Its Jamaican operation is owned 51 per cent by the government, with New Day as the operating partner.
Laura told the Financial Gleaner on Monday that New Day is yet to receive details on the actual acreage involved.
"I am enquiring into the acreage of the new lease, but can otherwise state that the new area is largely to the West of our prior SML 165 and to the east of the Cockpit Country boundary," he said.
In terms of volumes, he added, "the new lease is expected to increase our prior mineable reserves by a factor of roughly 12 times the previously remaining reserves" and the company is already "seeking additional markets" for the ore.
For this year, Noranda Jamaica expects to produce between 3.5 million and four million tonnes of bauxite.
In a company release issued on Monday, New Day said the lease represented the start of a new 50-year relationship in which the Government of Jamaica.
The company entered Jamaica in 2016 when its owners acquired the assets of bankrupt Noranda Aluminum Holding Company, NAHC, at auction for US$24.4 million.
Subsequent to the auction, New Day promised to pay the back taxes owed by NAHC. It said this week that it has agreed to pay US$12.6 million in outstanding levy amounts that Jamaica had not been able to recover from the former operator of the business, and pay off another US$6.4 million the former operator owed to ex-employees and contractors.
New lease signed
The release noted that on the day the new lease was signed, September 6, New Day paid over US$7 million to the Government of Jamaica in profit-sharing and back levy payments.
New Day also disclosed that in the two years of its operation in Jamaica, its payments for profit sharing, royalty and asset usage fees, as well as with legacy liabilities to third parties of roughly $4.6 million, amounted overall to US$26.2 million.
New Day/Noranda CEO David D'Addario said he expected to finalise the legacy payments by the spring of 2022, ahead of the originally scheduled completion date.