Editorial | Change mineral law to cover red mud

Having already advised Audley Shaw of the need for a new, more inclusive approach to the mining and refining of Jamaica’s remaining bauxite reserves, this newspaper now urges him to put his mind to something else that might lead to the island extracting additional value from the mineral.

Minister Shaw must have it placed beyond doubt that any residual minerals or substances that are left after bauxite is taken through any transformative process, such as refining or calcination, are deemed to be like all minerals that are still in the ground and vested in the State. This should be so unless there are specific agreements to the contrary, for which the Government has been appropriately compensated.

This newspaper previously commended this idea to Mr Shaw’s predecessor, Robert Montague, but we are not aware that he acted on our suggestion. A number of recent developments, however, give the matter urgency.

Depending on who provides the prognosis, Jamaica has between 30 and 100 years of bauxite reserves remaining. Extracting what is left could become increasingly problematic, as future mining operations come closer to communities, many of which already complain of pollution and its other disruptive effects.

However, as we have noted before, there are, at this time, no viable economic alternatives to the bauxite/alumina industry, which provide good-paying jobs, substantial foreign exchange inflows and, usually, significant contributions to the Government’s coffers. That is why we proposed to Mr Shaw a reset of the industry, starting with frank conversations between the Government, the firms, communities and environmental activists on the way forward. These debates must include how to provide greater development and social support to those areas where bauxite is mined and, therefore, suffer the worst of the industry’s negative effects.

WHO OWNS THE MINERALS

Then there is the separate question of who owns the minerals that may be found in the waste from the refining of bauxite into alumina, which could be of significant economic value. When bauxite is refined into alumina – the stage before that substance is smelted into aluminium – it leaves a red effluent, which is stored in large ponds, sometimes called ‘red mud lakes’. These ponds are obviously in areas near alumina refineries. Sometimes the substance is dried and stacked.

It is common knowledge that there are several other minerals in bauxite. However, what has provoked excitement in recent years is the scientific advancement of technology, although the economic feasibility of none has been verified, to extract rare earth elements (REEs) from red mud – the effluent stored in those ponds in St Catherine, Manchester and St Elizabeth.

A group of 17 minerals, rare earth elements, are widely used in modern technological applications, such as batteries for electric vehicles, parts in mobile phones, satellites, and in ultra-modern war weaponry. While REEs are not really rare, they are not generally found in large, concentrated deposits. The country with the largest known deposits of the stuff is China, which controls around 60 per cent of the world market. The Chinese have also been corralling deposits elsewhere, which worries the Americans. Washington considers REEs strategic minerals, and the Biden administration has been prompting American companies to seek out domestic supplies and expand output.

Indeed, the geostrategic importance of REEs was highlighted a dozen years ago when Beijing briefly halted the export of the minerals to Japan, during diplomatic jousting over Japanese fishermen’s detention of fishing waters that Japan insisted is theirs, which China contests.

Although REEs have not yet been talked about as a fallout from the Russia-Ukraine war, it is unlikely to be far from the minds of strategy analysts. Russia is not a major exporter of REEs, but it is estimated to have about 12 per cent of world reserves. The Russians, however, believe that significantly undercounts their reserves, given the limited exploration and mapping of the reserves. The West’s effort to isolate Russia over its invasion of Ukraine and Moscow’s relationship with Beijing now add another dimension to the geostrategic importance of REEs and Russia’s potential role as a supplier. Ukraine, too, is a supplier of the product, whose mining and export have been disrupted by the war.

IMPORTANT PLAYER

All this could make Jamaica an important player if we, indeed, have plenty of the stuff lying around as waste and there is the technology with which to cost-effectively extract from the effluent. In 2013, Japan’s Nippon Light Metal partnered with the Jamaica Bauxite Institute to advance technology to extract REEs from red mud, but apparently failed to develop a process whose application was economically feasible.

However, early last year, DADA Holding, the then principal outfit that is now rebranded as Atlantic Alumina Company, announced a joint venture with a Canadian green energy firm, Enervoxa, to use Enervoxa’s proprietary technology extract REE from the red mud from the Atlantic’s alumina refinery in Gramercy, Louisiana. At the time, they reported having 35 million tonnes of the waste at the Gramercy refinery. That waste would have come from bauxite shipped from Jamaica over decades.

It is not clear whether that idea is still alive. If it were, the red mud would represent a second economic resource for its owners, whose royalties and levies covered only a single mineral – the bauxite they mined and shipped.

Obviously, Jamaica cannot do anything about effluent from the bauxite that has already left the island, for which companies have already paid. But we can do something about what remains on the ground here by applying the principle used with respect to unmined minerals. Regarding bauxite acquired for refining abroad, the levies and royalties should take into account the likelihood of other minerals, like REEs, being extracted therefrom. This principle should also apply to the tailings from bauxite mining and other processing.

Further, the Jamaican authorities should aggressively encourage domestic research and development of the promising extraction technologies, as well as promote partnerships with Jamaican firms and foreign individuals and outfits that may be on the way to bringing such know-how to market.