Phillips: Many companies interested in Jamaica's bauxite assets
Finance Minister Dr Peter Phillips yesterday said that there are many companies that are interested in Jamaica's bauxite assets and hinted that the country would not suffer if Noranda Bauxite left.
Noranda, which operates a bauxite plant in St Ann, recently took the Government to arbitration and lost. The company was contending that it should not be paying the full bauxite levy.
However, following the ruling of the arbitration, which now sees Noranda with a bill of US$15 million this year, the company warned of job losses at its operation.
But speaking during yesterday's Standing Finance Committee of Parliament, Phillips said that Noranda was facing financial difficulty and suggested it could fold.
He said that the closure of Noranda "is a possibility that exists independently of anything we do on the levy side".
DUTY TO PROTECT
The minister, while being guarded, suggested that Noranda wants to move to a regime that would see it paying no levy.
"It is not our view that Jamaica should dispense with a levy regime," Phillips said.
He said, too, that as finance minister, his duty was to protect the Jamaican people's interests and signalled that "there are many people who have an interest in Jamaica's assets".
Opposition Spokesman on Finance Audley Shaw, however, had a warning for Phillips.
"Tread carefully with Noranda," Shaw said. "Jamaica cannot afford the kind of economic fallout that would happen were Noranda to close their doors."
But Phillips, in a soft comment to Shaw, said, "I will tell you the name of the company later", an indication that a new firm is in the wings, waiting to take over.
The minister said that at the current price of aluminium of US$1,500 per tonne, the levy would account for US$26 in the cost of producing a tonne of aluminium. He said that this would represent 1.7 per cent of the current cost of producing a tonne of aluminium, which is minuscule by comparison with cost inputs in the United States such as energy, labour, and overheads.
"Were we to accede to Noranda's demand, the country would be realising, in nominal terms, the same amount of taxes that we were receiving prior to the introduction of the bauxite levy in 1974, and we would be doing so while allowing the exploitation of a depleting, non-renewable resource," the minister said.
"This would be dishonouring the legacy of Michael Manley and the generation that struggled for this. Our obligation is not to a particular company, but to the people of Jamaica. We are confident that in doing this, we will keep the employees employed," he added.