Fri | Dec 9, 2016

Two-year plan to put Alpart back to work

Published:Tuesday | December 23, 2014 | 12:00 AMNeville Graham

The Jamaican mining rights for Russian aluminum giant UC RUSAL are safe for now.

Mining and Energy Minister Phillip Paulwell indicated yesterday that, beginning January 2015, two million crude wet tonnes of raw bauxite will be mined and shipped to Russia.

Paulwell was addressing a press conference at Jamaica House in St Andrew yesterday.

The minister said the bauxite ore would attract full levy plus royalties at current prices and is valued at between US$55 million-US$60 million.

The mining activity is part of a larger deal that will lead to the reopening of the long-shuttered Alpart alumina plant in Nain, St Elizabeth. The plant should reopen by December 1, 2016. Alpart, operated by UC RUSAL, has been closed for the last five years, reportedly because of the low market price for the product and high production costs.

The Government had threatened to withdraw UC RUSAL's mining rights if the plant was not reopened.

Paulwell said a deal was hammered out between Russian interests and Jamaican authorities as late as yesterday morning as, despite Cabinet approval, UC RUSAL's board only ratified the deal late Friday.

"The new deal represents an expression of the Government's commitment to ensure that the full potential of the bauxite-alumina industry is realised in the shortest possible time, as well as an expression of confidence on the part of UC RUSAL in the future of our bauxite and alumina industry," Paulwell said as he gave details.

UC RUSAL is expected to spend a total of $400 million on port/storage/transportation infrastructure along with an upgraded power plant. Once open, the Alpart plant is expected to produce 1.65 million tonnes of alumina.

Part of that production will be dedicated to an alumina smelter in Russia, instead of being sold on the spot market.

In the meantime, Opposition Spokesman on Industry, Investment, Mining & Energy Karl Samuda welcomed the UC RUSAL deal, but poured cold water on the instrumentality of Paulwell.

"UC RUSAL is one the largest producers of bauxite in the world, and this plant has excellent resources. This decision of UC RUSAL has less to do with any threats from the minister but must be regarded as just common business sense," said Samuda.

He said the announcement was not unexpected, as it was a natural outcome of recent developments in the world alumina trade.

neville.graham@gleanerjm.com