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Paulwell threatens to revoke mining licences again

Published:Wednesday | June 11, 2014 | 12:00 AM

Daraine Luton, Senior Staff Reporter

The mining licences of UC Rusal to extract bauxite at Alpart in St Elizabeth and Kirkvine in Manchester could be revoked by the end of the month if the Russia-based company fails to provide the Government with a firm undertaking for the reopening of the plants.

Speaking in the House of Representatives yesterday, Mining Minister Phillip Paulwell said UC Rusal has said it intends to have the plants reopened in 2016, but the company has not put the agreement in writing.

"We are disappointed that unlike the Ewarton situation, where there is a signed agreement, apart from a verbal indication that 2016 is when we are trying to reopen, I have not been able to get it in writing," Paulwell said.

Officials of UC Rusal and the Government are set to have meetings later this month to discuss, among other things, the reopening of the plants, which have been closed since 2009.

"We have to make a determination at the end of June whether we continue with those mining leases or we give effect to an authorisation that I now have to proceed. It could mean that the reserves could be made available to other players who are interested," Paulwell said.


It is the second time in two years that Paulwell is using the floor of Parliament to indicate his desire to strip Rusal of its licence if it fails to restart mining operations at Alpart and Kirkvine. He said the meeting will, among other things, consider whether Kirkvine has a future in bauxite mining.

From as far back as last year, Paulwell has been threatening UC Rusal that it would lose its licence if it fails to resume mining operations. Paulwell has said the Government would continue to insist that UC Rusal provide a clear timeline as to when Alpart and Kirkvine would reopen.

"They know that their licences will not be tenable unless we finalise a day for reopening, so all parties are aware that this is a fundamental issue that has to be settled," Paulwell has said.

Yesterday, Paulwell, responding to questions from Opposition MPs Karl Samuda and Audley Shaw, said Rusal was required to indicate an energy solution, which it plans to implement at Alpart to ensure the reopening of the plant.

"I am prepared to concede that Kirkvine might be a changed situation because of the fact that it has been closed for so long, but in any event, those reserves are there and there are sufficient reserves," Paulwell said.


Samuda said action should be taken to transform Kirkvine into an alternative use, saying it was not a good approach to be "living in a state of hope" in relation to the plant.

Paulwell, however, said that unlike two years ago, when nobody was interested in bauxite, the game has changed and there is heightened interest in the sector.

Paulwell also announced that the Government has sold its seven per cent stake in the West Indies Alumina Company (Windalco) to parent company, UC Rusal, for US$11 million. He said Jamaica will not pocket a dollar from the agreement since the money will be credited against a US$21.15 million debt to Rusal.

He said, as a result of the sale, Jamaica would save US$3 million a year. He also said Jamaica Bauxite Mines would continue to service the remaining US$10.15 million debt to Rusal

The minister has also announced that the Government has extended the waiver of the bauxite levy for Rusal. The one-year waiver expired in October.

The minister said the new waiver, which will be for two years, will end in September 2015.