Alcoa Announces Major Expansion Project at Jamalco Refinery

Alcoa Inc., the world’s leading supplier of alumina, has announced a US$690 million expansion project at the Jamalco Refinery in Halse Hall, Clarendon, which will increase employment in that section of the island and bring the country an additional US $300 million per year in bauxite earnings.

The expansion, to be undertaken over the next three years, will result in an additional 1.4 million tonnes of bauxite being produced annually, more than doubling the refinery’s total capacity to 2.65 million metric tonnes per year, and placing Jamalco among the world’s lowest production-cost refineries. The development comes on the heels of the Government’s recent removal of a nearly 30 year-old bauxite levy in order to spur investment in the sector. In 2003, Alcoa completed a 250,000 metric tonne expansion project at Jamalco at a cost of US$115 million and the removal of the levy, along with the expansion, lowered costs at the refinery by approximately 30 per cent.

Upgrading of the Jamalco facility is part of a US$1.3 billion investment initiative, which also includes the development of the Juruti bauxite reserve in Brazil, and is aimed at meeting the growing worldwide demand for aluminum, which is used in the construction industry and to manufacture cars.

In an interview with JIS News, Kevin Lowery, Director of Corporate Communications at Alcoa in Pittsburgh, Pennsylvania in the United States, informed that the decision to include Jamaica in the development effort, “was based on the unbelievable cooperation we have with the Government, as well as the fact that it (Jamalco) has an outstanding workforce and that puts us in an unbelievably low cost position.”

“It is much more efficient for us to expand a facility that is really kicking on all cylinders like Jamalco is, versus trying to build a whole new facility,” he stated further.

With the appropriate Government approvals, work on the project should begin later this year, with ground to be broken soon after for a 2007 completion date. The project is expected to increase employment in Halse Hall and surrounding committees in Clarendon. “As we get closer to the actual breaking of the ground and construction, we will be able to put a better number on the increase in jobs but without a doubt, we are going to need more people,” Mr. Lowery said.

Meanwhile, Dennis Morrison, Senior Director at the Jamaica Bauxite Institute has hailed the announcement by Alcoa as “extremely positive news,” noting that, “this is the largest expansion that any industry in Jamaica would have seen since the 1960s.”

“It will bring much economic activity especially to that part of the island where the expansion project will take place and on a more national scale, the additional tonnage that will be produced will generate an additional US$300 million per year of gross foreign exchange earnings and that in itself is the most significant single action for four decades,” Mr. Morrison said.

He pointed out further, that the intention of Alcoa to undertake such a large-scale development project, signaled the company’s confidence in the industry, stemming from measures put in place to improve the industrial relations climate and train the workforce, as well as the reform of the fiscal regime by the Government.

Alcoa has total alumina production capacity of some 14 million tonnes per year from a number of countries throughout the world. Alcoa Inc. and its affiliate Alcoa World Alumina & Chemicals (AWCO) Own 50 per cent of the Jamalco plant.