Elizabeth Morgan | The export of bauxite/alumina
I was inspired to write about the bauxite/alumina industry, primarily in Jamaica, from a recent visit to Discovery Bay, St Ann, where the plant of Discovery Bauxite owned by Atlantic Alumina Company is located and an article by Lance Neita in The Sunday Gleaner, December 12, titled ‘An injunction not only on mining but on huge chunk of economy’ (sic).
In international trade, the goods and services which were the pillars supporting Jamaica’s economy in the latter half of the 20th century were sugar, bananas, bauxite/alumina and tourism. Today, sugar and bananas are practically gone and I have addressed these in previous articles. The value of these agricultural products, and add cocoa, coffee, ginger and pimento, have not been replaced.
Tourism is now considered the principal pillar. Bauxite/alumina remained quite strong up to about 2012 contributing more than 30 per cent of total goods export earnings. It now seems to be on shifting sands. This may not only be resulting from environmental concerns, such as land degradation, deforestation, water contamination, and air pollution, as well as the mud lakes. Contributing to the instability are company closures, production shortfalls, uncertain development plans, and high cost of energy.
However, the importance of this industry to the Jamaican economy remains in spite of all these challenges. It was interesting to note from STATIN statistics that in 2019, alumina was 42 per cent of the total value of all goods exports; and in 2020 and 2021, 35 per cent.
In the 1950s and 1960s, bauxite mining in Jamaica was the new industry which heralded robust growth in the country and gave hope that Jamaica was on the road to prosperity as it sought self-determination. Jamaica was the leading bauxite producer in the world and had begun refining it into alumina (aluminium oxide). This, although Jamaica was not the first British West Indian territory to commence bauxite mining. Bauxite production had begun in Guyana in 1916. Among current CARICOM members, its exploration and production also dates to about 1916 in Suriname. There have been many changes since.
GLOBAL FORECAST REMAINS GOOD
The current global forecast for trade in bauxite/alumina remains good. It is still essential for the production of many products even with some alternatives. The major producers are now Australia, China and Guinea. Guyana and Suriname have significant reserves, and with oil and plans to improve renewable energy supplies, both are proposing to expand their bauxite production and, in the case of Guyana, to move into alumina production. So, the future looks much brighter for these countries.
Production and export volumes are under pressure in Jamaica due to past and present challenges in the industry. Aluminium Partners Limited (Alpart) at Nain in St Elizabeth was acquired by Chinese firm, Jiuquan Iron & Steel (Group) Company (JISCO), in 2016 from Russian firm, UC Rusal. Operations at Alpart have been suspended since about 2019 to facilitate the plant’s modernisation and expansion. An article from May 2022 indicates that JISCO has been acquiring land for mining and there are plans to upgrade and expand the plant. At this point, Alpart remains closed and it remains to be seen what is to happen with this plant. Thus significant production is lost.
The other two refining plants are WINDALCO Ewarton Works in St Catherine owned by UC Rusal and JAMALCO at Halse Hall in Clarendon co-owned by the Noble Group.
The JAMALCO Plant had to halt production due to a fire that destroyed its powerhouse in August 2021. Rebuilding the powerhouse and other renovations were being undertaken and the company expects to be back to full operation by September.
WINDALCO is producing. As a company with Russian ownership, so far, it does not seem to be affected by sanctions imposed on Russia as a result of its current war in Ukraine now into its second year. I would imagine that the general hope here is that this remains the situation. The company in addition was criticised for pollution of the Rio Cobre River. They are to address these concerns.
HIGH COST OF ENERGY
Recall that the WINDALCO Kirkvine works in Manchester have remained closed since 2009. There were recent news reports about starving cows on a property owned by WINDALCO Kirkvine, which was unfortunate publicity for the image of the company.
Discovery Bauxite in St Ann exports unprocessed bauxite. Lance Neita’s concern is the court stop order against this company preventing mining in an area under a special bauxite mining lease granted in 2018. This is a suit brought by St Ann citizens supported by environmental advocates. It is related to mining in the Cockpit Country.
Neita is concerned about the negative effects actions by environmentalists could have on the bauxite industry. It is acknowledged that while there have been positive developments through government regulations and the role of the Jamaica Bauxite Institute, bauxite mining and alumina processing have had negative impacts on the environment. From what I can ascertain, Discovery Bauxite will continue production while the case is heard.
Another critical issue for all the producers is the high cost of energy especially with the war in Ukraine. This affects cost of production and profit margins.
Another issue is the long-term sustainability of the industry in Jamaica. It seems there are now only about 30 years of reserves available which makes the life of the industry time bound. According to consultant Coy Roache, speaking last year, it will not be easy to replace the bauxite/alumina industry as mining of other minerals, such as limestone, does not have the value of bauxite/alumina. The reality is that Jamaica has to begin to seriously consider diversification and replacement for this industry. Hopefully, this is already being done.
Our economy surely faces serious difficulties as traditional industries continue to falter and without adequate replacements.
Elizabeth Morgan is a specialist in international trade policy and international politics. Email feedback to firstname.lastname@example.org