The Government has granted a bauxite levy concession to Russian-based aluminum company UC Rusal, which will ensure, among other things, that the 600 local jobs are maintained at the Ewarton Works refinery in St. Catherine.
This was revealed by Minister of Science, Technology, Energy and Mining, Hon. Phillip Paulwell on Tuesday (October 2) in a statement to Parliament.
He informed that during the one-year concession period, from October 1 to September 2013, UC Rusal will maintain the level of production at the refinery at not less than 300,000 metric tons per annum, which is half the total capacity of the plant.
"We also agreed that the Ewarton alumina refinery will become a base location as of 2015," he said, explaining that a base location is considered a primary source, or a main supplier of alumina to smelting operations.
It was further agreed that the two other alumina plants operated by UC Rusal – the Kirkvine and Alpart refineries located in Manchester and St. Elizabeth respectively, will, over time, also be designated base locations for UC Rusal's smelting operations.
Under the agreement, UC Rusal will invest US$100 million in a coal-fired electricity generating plant. "The company has advised that work on this plant will commence with engineering at the end of the first quarter in 2013, be completed by 2015 and will employ 800 persons in the construction phase," Minister Paulwell informed.
He added that full production of alumina at Ewarton will resume once construction of the coal-fired energy plant is complete.
"We are not yet in agreement in relation to the other two locations, and a time period of up to the end November 2012 has been allocated for those negotiations to be completed. During this period, the parties will finalise the start-up date as well as the energy solutions for Kirkvine and Alpart," he said.
Minister Paulwell said the Government has given its support to the company to pursue energy options "that accord with our National Energy Policy and local environmental standards".
"In addition, Cabinet has authorised negotiations for the sale of the Government of Jamaica's seven per cent shares in WINDALCO. Those negotiations will also be completed by the end of November," he said.
UC Rusal entered Jamaica's bauxite and alumina sector in 2007. The company currently controls approximately 2.82 million metric tons or 65.1 per cent of Jamaica’s installed alumina production capacity of 4.34 million metric tonnes per year.
The company is majority shareholder and with 93 per cent shareholding, is managing partner in WINDALCO, which owns and operates the Ewarton Works and the Kirkvine Alumina Refinery, and 100 per cent owner of the Alpart refinery.
Alumina refining at both WINDALCO plants at Kirkvine and Ewarton ceased in 2009, and operations at the Alpart plant ceased at the end of May 2009. The Ewarton refinery was re-opened in July 2010 but Kirkvine and Alpart remainclosed.