Mining, Leo Cousins, said on Monday that the port upgrade is supposed to proceed in 2015, but as a project of JBM.
"The expansion and modification of the port is a new project to be carried out by JBM," said Cousins. "Lydford Mining Company intends to contribute. We want to contribute because we are users of the port."
Cousins is proposing that any financial backing provided for the project by Lydford not be treated as an equity stake, but offset later against future port fees.
The mining company is in expansion mode and has doubled limestone shipments to Chile. A more efficient port capable of loading shipments faster is in Cousin's business interest, as well as an extension of the pier to accommodate more ships.
plan to grow quickly
The port now loads at about 1,000 tonnes per hour, he said. It would need to double that to get to world standards.
"Our ambition is to grow as quickly as possible to a million tonnes or two million tonnes, depending on the market. We have started already to use 50,000-tonne carriers and every day that you can cut off the loading time is money in your pocket," the mining executive told the Financial Gleaner.
"The world standard for loading is 2,000 to 2,500 tonnes an hour. The first purpose of the improved port will be to increase loading capacity so that 50,000-tonne ships can come in on a fortnightly basis. We load as high as 1,000 tonnes an hour now, when conditions are dry," he said.
Financial data published by the Ministry of Finance indicates that JBM's Lydford segment made operating profit of $69m in FY2013 and an estimated $11 million the following year.
But the bauxite company closed the respective periods with overall losses of $961m and $342m due to loss-making forward contracts with Glencore and Windalco debt.
Roache says JBM's profitablility should recover once the announced sale of its seven per cent stake in Windalco to majority owner UC Rusal finally closes. The US$11-million deal is pending transfer of some 500 titles.
"We have been trying to sell Windalco; we have been losing off it for years," he said. "Production costs were more than the value of alumina. I have been here for eight years and it has never made a profit."
Since April 2014, JBM has paid a penalty to Glencore for not supplying contracted alumina on behalf of another state-owned company, Clarendon Alumina Partners, that was due from its seven per cent share of production at Windalco.
"By not supplying Glencore, we have in fact earned over US$21 million over what we would have earned from them," Roache said.
The penalty payments to Glencore will continue to mid-2016.
JBM is the majority owner in Noranda Jamaica, but the minority American owner is the operating partner. JBM has 50 per cent membership on the executive committee.
"They take all the cost of production and get what is produced but pays JBM for its monetary investments. The rate of return is significant compared to most manufacturing businesses," Roache said.
Finance ministry data places JBM's total annual revenue at around $1.4 billion.
Revenue from Noranda was US$2.52 million per year for the first 15 years, but has since declined to US$1.72 million each year, Roache.
"Unlike Windalco, where JBM pays seven per cent of production cost and gets seven per cent of the alumina produced, the Noranda joint venture is different whereby JBM gets what is called an asset usage fee for its investments," said Roache.
"For the first 15 years of the investment, JBM received 14.68 per cent interest per year on its investment and then 10 per cent per year for as long as the company is in operation. Unlike the other investments in the industry, this is more conservative but has never made a loss," he said.