Bauxite and Alumina Sector Earns US$1.3 Billion

The bauxite and alumina sector yielded some US$1.3 billion in gross export earnings during 2007, State Minister in the Ministry of Mining and Telecommunications, Laurence Broderick informed the House of Representatives on Wednesday (July 9).
Making his contribution in the 2008/09 Sectoral Debate, Mr. Broderick said this was some 14 per cent more than the previous year, adding that 2007 was the third consecutive year that the US$1 billion mark was exceeded.
He also advised that the retained earnings from levy, taxes, royalties, wages, salaries, and other expenditures amounted to US$583 million, “representing an 8 per cent increase over the previous year.”
Noting that the sector accounted for approximately 60 per cent of Jamaica’s merchandise exports, one-third of total goods and services exports, and 85 per cent of the local minerals industry’s reported annual earnings, the State Minister said it stands to gain immensely from the high value-added alumina component of bauxite. This, he pointed out, is especially driven by the current high prices for aluminum on the world market, and continued improvements by local investors.
To this end, Mr. Broderick predicted a 15.5 per cent spike in Jamaica’s export revenue for 2008, yielding earnings of approximately US1.5 billion. He added that total bauxite production was projected to increase by 3 per cent to 14.9 million tonnes.
“Alumina output is also projected to increase to almost four million tonnes, and crude bauxite production 4.6 million tonnes. About 70 per cent of the output will be accounted for by production in the higher value-added alumina segment,” he informed.
Within the global context, Mr. Broderick said the outlook for the local minerals industry “is extremely positive.” He pointed out that Jamaica remains one of the top five bauxite and alumina producers, with other segments of the industry, especially the industrial minerals sector, “showing increased promise.”
“The expanding role of the emerging economies, such as Brazil, China, India, and Indonesia, has dramatically increased worldwide demand for metals and raw materials. The on-going growth in the emerging economies has effectively suppressed the projected fallout associated with the economic downturn in the US and other major economies,” the State Minister said.
Mr. Broderick noted that, currently, China is the dominant player in the global bauxite and alumina sector in terms of production and consumption. He said the Asian country produces some 12.62 million tonnes of aluminium, representing 33 per cent of global production, while consuming 37.81 million tonnes or 32 per cent overall. By contrast, he said North American output was up 5.7 per cent, and that of Western Europe, a mere 2.3 percent.
Regarding alumina, the State Minister said global production for 2007 increased by 5.98 million tonnes to 7.49 million tonnes or 8.8 per cent. These figures, Mr. Broderick added, “indicate the tremendous opportunity that exists for Jamaica to increase its share in the global alumina market.”