Tue | Sep 17, 2019

Alpart plant to temporarily shutdown for upgrading

Published:Tuesday | September 3, 2019 | 11:44 AM
The Alpart plant in Nain, St Elizabeth - File photo.

Hundreds of workers at JISCO-Alpart will soon be out of a job as the company will be suspending alumina production at its St Elizabeth-based plant.

The scale down will begin over the next 30-60 days and coincides with the second phase of a modernisation and expansion programme.

In a media release, the Transport and Mining Ministry did not detail the exact number of workers who will be made jobless.

However, a spokesperson said the company has sought to assure the ministry that it will keep a percentage of the current workforce for maintenance as well as to assist with the execution of the modernization and expansion programme.

The ministry says the upgrade will result in a significantly more efficient plant with production capacity being increased from 1.65 million tonnes per year to two million tonnes per year.

The Ministry says its technical team offered several options to JISCO during the modernisation discussions, but it says the company decided that a temporary shutdown is the best option.

“After due consideration the company decided that in light of worker safety and welfare, high cost of production, the prevailing low and falling price of alumina on the world market, and difficulties being faced sourcing parts for old equipment, the best option at this time is to temporarily suspend alumina production to ensure an efficient upgrade process,” said a spokesperson in the release.

“The modernisation programme means new investment and greater future job security for the people of Jamaica,” the spokesperson added.

JISCO-Alpart reopened in 2016 under management by the Chinese firm Jiquan Iron and Steel (Group) Company (JISCO) after being closed for eight years.

Full Statement

The Ministry of Transport and Mining confirms the second phase of the modernisation and expansion programme to commence at the JISCO/ALPART plant within the next thirty (30) to sixty (60) days. The upgrade will result in a significantly more efficient plant with production capacity being increased from 1.65 million tonnes per year to 2 million tonnes per year.

In 2016, Jiquan Iron and Steel (Group) Company (JISCO) purchased 100% of the fifty (50) year old Alumina Partners of Jamaica (ALPART) refinery at Nain, St. Elizabeth at a cost of two hundred and ninety nine million United States dollars (US$299 million) and conducted initial rehabilitation and upgrades over the years valued at approximately three hundred million United States dollars (US$ 300 million).

The refinery’s energy use is extremely high, primarily as a result of its original design. One of the principal objectives of the modernisation programme to be conducted by JISCO is to lower the refinery’s production cost and therefore to increase its competitiveness. The Government Of Jamaica (GOJ) has engaged over the years numerous initiatives to promote efficiency in the local alumina manufacturing industry as a tool to induce economic growth. These mechanisms have focused on incentivising companies to improve the efficiency of their alumina refineries.

Methodologies have included:

* Changes to the taxation and wider fiscal regimes afforded to companies,
* Numerous targeted partial or total waiving of the Bauxite Production Levy for specific periods of time.
* Profit sharing agreements

Phase one of the modernisation programme which included civil work has been completed. Equipment and machinery needed for expansion are either: on site, en route or on order.

The Technical team of the Ministry offered several options to JISCO during the modernisation discussions. However, after due consideration, the company decided that in light of: worker safety and welfare, high cost of production, the prevailing low and falling price of alumina on the world market, and difficulties being faced sourcing parts for old equipment, the best option at this time is to temporarily suspend alumina production to ensure an efficient upgrade process.

JISCO, a company wholly owned by Gansu Province in the People’s Republic of China, has given their long term commitment to the people and Government of Jamaica.

Experts agree that a more efficient refinery will work to the benefit of all in the long term.

The Ministry commits to continue dialogue with JISCO to ensure the welfare of workers and the livelihood of the community are duly protected.

We commend the three Unions, the BITU, UCASE and NWU, who had given their support to the facility by agreeing to a period of wage restraint and industrial peace.

As a result, the company has assured the Ministry that it will maintain a percentage of the current workforce for maintenance as well as to assist with the execution of the modernisation and expansion programme.

The mining sector is an important pillar in Jamaica’s economic growth plan:

* Accounting for fifty per cent (50%) of total traditional exports.
* Contributing forty per cent (40%) of total GDP growth for the recently concluded fiscal year 2018/19.
* Third largest foreign exchange earner for the economy.
* Responsible for five thousand (5,000) high-paying direct jobs and at least twenty five thousand (25,000) indirect jobs.

It is therefore in the best interest of the country to ensure the viability of the Bauxite and Alumina Sector by encouraging plants to be more production efficient. Efficiency in turn:

* Reduces production costs,
* Facilitates increased competitiveness,
* Increases profitability and
* Creates greater employment

The modernisation programme means new investment and greater future job security for the people of Jamaica.

The Ministry of Transport and Mining wishes to remind the people of Jamaica that the modernisation and expansion programme will be one of the largest investments in the history of the country.

The Ministry will continue to monitor developments in the sector with the welfare of workers and the livelihood of communities being our primary concern.

We thank the workers, community and all stakeholders for the support given to this very important part of our economy over the years. Thanks must also be extended to JISCO for their long term commitment to Jamaica and we look forward to a bright future.

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