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Paulwell's action on Rusal could hurt business, says JLP

Published:Thursday | July 10, 2014 | 12:00 AM

Daraine Luton, Senior Staff Reporter

A member of the second-tier leadership of the Jamaica Labour Party (JLP) feels the decision of mining minister Phillip Paulwell to revoke the Special Mining Leases of UC Rusal in respect of the Alpart and Kirkvine refineries could adversely impact investor confidence in the island.

"If we give the wrong signal to multinationals that we are prepared to act in a manner that is going to be draconian, then you turn off investors from coming to Jamaica," said Kent Gammon, the deputy spokesperson on industry, commerce, energy and mining.

Gammon, who was speaking during a Gleaner Editors' Forum held at the newspaper's Kingston offices yesterday, said Paulwell needs to answer several key questions on his latest actions.

"What are the terms and conditions that were not met, such that he believes he should revoke a licence from a company that has invested in our country and, of course, we want to maintain a relationship with?" Gammon asked.

In closing the 2014-2015 Sectoral Debate in the House of Representatives on Tuesday, Paulwell said the Government has placed UC Rusal on notice by letter dated July 1, 2014 that "it is my intention to revoke the special mining leases in respect of the Alpart and Kirkvine refineries in the event that bona fide mining operations do not commence within six months".

The plants have been closed since 2009 and Paulwell said the bauxite reserves associated with both plants "represent over 200 million tonnes of ore idling in the ground while the plants flounder in uncertainty, and the livelihood of thousands continue to be in peril".

"This situation cannot be allowed to continue indefinitely," he added.

The Mining Act empowers the minister to revoke leases if the holder wholly ceases work in, on, or under the land the subject of the lease during a continuous period of six months, without the written consent of the minister. The law further states that the minister shall not unreasonably withhold consent.

The holder of a mining lease has the exclusive right to prospect, mine and dispose of the mineral specified in the lease on lands within the area of the lease. The lease in respect of Alpart expires in November 2035, four years after the licence for Kirvine is set to expire.

non-transparent manner

Meanwhile, Gammon claimed the discussions and agreement that have been entered into with UC Rusal and the Government were done in a non-transparent manner. He argued that "if we had had more exposure as to what the terms and conditions were, I think we could have gotten a much better deal with the multilateral companies and now the situation where the industry is closing down almost and the Government is scrambling to find new investors".

"You want to be open, you want to be transparent, you want to be business friendly and, therefore, if you engage people in a friendly, businesslike manner and it is not authoritative, then you improve brand Jamaica and you improve the industry across all sectors," Gammon said.

He added that in the absence of proper information, it is difficult to say whether the JLP would have acted in another manner.