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Government won't bow to Noranda Bauxite

Published:Friday | January 22, 2016 | 1:00 AMDaraine Luton
Phillips

THREATS MADE by Noranda Aluminum Holding Corporation that it would send home a huge chunk of its workforce if the Government pushes ahead with plans to collect outstanding levy from them have been rebuffed by Finance Minister Dr Peter Phillips, who says the Government believes it can collect the revenues without impairing the ability of the company to survive.

"We believe that we can both collect on our money and keep the company working, but we cannot give away depleting, non-renewable resources of Jamaica without getting what is provided for, in law, for the people of Jamaica," Phillips said yesterday.

Noranda Aluminum Holding Corporation has announced it will be moving ahead with job cuts, as it grapples with several challenges, including the insistence of the Jamaican Government to collect the full bauxite levy. A press release issued by the company's head office in Tennessee, United States, says 190 jobs will be cut.

POOR MANAGEMENT

A senior official close to Jamaica's bauxite industry told The Gleaner that it is poor management that has led to Noranda being in the current position.

"They have been badly run, and it has got itself into a lot of problems. It has nothing to do with Jamaica," the official said.

"If the Jamaican Government were to tell Noranda tomorrow morning that you are paying zero levy, it would not change the financial problems they are in, and not one worker's job would be saved. Noranda needs more than levy concession from Jamaica to turn around the business," the official added.

Asked yesterday if the Government would risk job losses by not granting Noranda its wishes for an extension of a levy waiver, Phillips said that "our purpose is the protection of Jamaica's interest in relation to the industry as a whole, not any particular firm".

"We don't have any hostile disposition to any firm nor do we have an obligation to any particular firm, but to the entire Jamaica and I believe that there are many many opportunities to keep the industry operating if the problems that Noranda faces, which have nothing to do with Jamaica, become overwhelming for them," the minister said.

"The clear understanding was that this arrangement would cover the period 2008-2009 to December 31, 2014, and that Noranda would revert to the standard regime on January 1, 2015," Phillips told Parliament last year.

The bauxite levy amounts to approximately US$7 per tonne, which is reflective of a base rate of US$5.50 per tonne, plus increments determined by a specified formula.

daraine.luton@gleanerjm.com