Bright Prospects for Bauxite & Alumina Sector

The input from the bauxite and alumina sector continues to be a mainstay for the Jamaican economy with operations doing very well in 2003, accounting for just over nine per cent of the Gross Domestic Product.
General Manager of the Jamaica Bauxite Institute, Parris Lyew-Ayee tells JIS News this in a recent interview. He says that in 2002, alumina was selling in the US$130 – US$140 per tonne range, and by the close of 2003, it was being sold in excess of US$400 per tonne, meaning better returns for the sector. The gross revenue from the industry last year was some US$773 million, which was an 8.6 per cent increase over the previous year.
Mr. Lyew-Ayee explains that last year was a record year in production for the island’s bauxite companies, which saw the sector producing 3.8 million tonnes of alumina, which was a six per cent increase over 2002. This, he says, is an all-time high of alumina production.
Overall production of bauxite was 13.4 million tonnes, which is some 2.5 per cent in excess of the year before. Alumina Partners of Jamaica (Alpart) has been expanding its production and is very close to 1.65 million tonnes per year, Mr. Lyew-Ayee points out, while the JAMALCO plant, which was originally operating at half a million tonnes, went to 1.25 million tonnes last year, completing its expansion within budget and within schedule.
Meanwhile, the West Indies Alumina Company (WINDALCO) plants at Kirkvine and Ewarton are producing at full capacity and are currently reviewing their operations. With the restarting of the Gramercy plant in Louisiana, United States, the Kaiser Jamaica Bauxite Company (KJBC) has also been producing at full capacity.
And, in what Chief Technical Director in the Cabinet Office and former Director at the Jamaica Bauxite Institute, Dennis Morrison, has hailed as the largest expansion that any industry in Jamaica had seen since the 1960s, Alcoa Inc., the world’s leading supplier of alumina, recently announced a US$690 million expansion project at the JAMALCo Refinery in Halse Hall, Clarendon. The expansion will increase employment in that section of the island and bring the country an additional US$300 million per year in gross foreign exchange earnings.
The expansion, to be undertaken over the next three years, will result in an additional 1.4 million tonnes of alumina 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.
Mr. Lyew-Ayee notes that the various elements in the bauxite alumina industry are now working together toward one goal. “The bauxite and alumina industry in Jamaica operates as Jamaica Inc. There was a time when there was more rivalry, but now what we are trying to do is to get the Jamaican operations being as competitive as possible in the world so we are looking to make it more productive, to be more economically viable and to ensure a good industrial relations climate,” he explains.
Mr. Lyew-Ayee adds that since the establishment of a Memorandum of Understanding among the government, the unions and the companies and the linkages with the communities, “things have gone much more smoothly and we are trying to find solutions rather than dwell on problems or difficulties.”
He further states, “I think, with the increase in productivity which come as a result of the effort put out by the workers, with the help from government in terms of adjusting the fiscal regime, the work on the environmental aspects (upgrading of plants), all of this has augured well for the well-being of the industry, at this point, and prospects for the future.”
Commenting on how government policies have helped to enhance developments in the industry, the General Manager points to the Bauxite Encouragement Act, which gives direct incentive and encouragement to the industry. “In recent times, the fiscal regime that has been adjusted to ensure the competitiveness of the industry is perhaps one of the most important ones,”
Mr. Lyew-Ayee states, adding, “for instance, ALCOA chose to expand its facility and by doing so, it was able to move from a production levy regime into an income tax regime, something which it had always wanted.”
He recounts that when the Gramercy refinery went down because of an explosion, the government of Jamaica worked very closely with Kaiser to maintain those operations.
One very significant policy which has helped to greatly improve industrial and community relations in the industry is the Bauxite Community Development Progamme, whereby investment is put back into the bauxite and alumina areas to ensure that there is life after bauxite and on a sustainable basis.
In Jamaica, the red earth, which is basically the raw material for aluminum, can be seen in parishes such as Manchester, Clarendon, St. Ann, St. Elizabeth and to some extent, the hills of St. Andrew. This red earth is easily accessible, making the mining process much easier than it is in countries such as Guinea and India, where the bauxite exists as hard rock that has to be blasted and crushed before it can be processed.
Mr. Lyew-Ayee explains that the accessibility of Jamaican bauxite is an advantage, but there was a disadvantage in some instances, because “in our case, we have people and towns on top of the bauxite.” This is where the linkage between the land, the community, the JBI and the bauxite mining companies come in.
The Bauxite Community Development Programme was established in 1996 and is managed and monitored very closely by the JBI. “What we have done is to establish community councils in all the bauxite areas whereby representatives from the community sit on these councils together with representatives from the companies and from the JBI. We also bring into play, other agencies that can help to facilitate the activities there. Our main objective is to ensure that there is life after bauxite. In going in, we assist to a certain extent with infrastructural development (light, water, roads), but our primary aim is economic development,” Mr. Lyew-Ayee explains.
Elaborating, he says, “We do a lot of work with regard to skills training to enable the people to be able to get gainful employment in the industry or elsewhere or to be able to establish their own businesses and we also do a lot of work in terms of encouraging agri-processing type operations.”
He further emphasises, “there is the myth that a lot of reclaimed lands are not useful, but it has to do with how you reclaim and rehabilitate the lands and we are doing a lot of work in terms of ensuring that proper rehabilitation is done so that the proper and appropriate products can be farmed in these reclaimed lands.”
To this end, the JBI has established a project in St. Ann where on reclaimed lands, the farmers grow peanuts and to accompany this, a factory has been established where the peanut is processed into peanut butter, drinks, cakes, and a whole range of products that the residents sell and manage as a cooperative. There is also a chicken farm project in that parish. Through the cooperative, the farmers are linked with the market to sell their processed chickens.
Meanwhile, WINDALCO in collaboration with Walkerswood, in St. Ann, has used mined-out reclaimed lands to assist pepper farmers. Walkerswood then buys all the peppers that are produced by these farmers, thus ensuring a market. This project is being expanded, Mr. Lyew-Ayee tells JIS News.
Throughout the years, more than 8,000 farmers have benefited from the community development aspect of the industry, Mr. Lyew-Ayee informs, adding that the JBI worked very closely with the Rural Agricultural Development Authority (RADA), the Social Development Commission and other agencies that can help with implementing these projects.
After mining, Mr. Lyew-Ayee says the used area may be needed for infrastructure such as roads and housing, but to a larger extent, these lands are very important to agriculture. “One of the important aspects with regard to agriculture has to do with water. What we are trying to do is use some of the mined-out orebodies to have them sealed for water catchment to help in irrigation. “The lands can be used for forestry, agriculture, electricity, village expansion, roads.we as a people need to recognize this resource that we have, to husband and protect it and to be able to ensure that as a country we get full benefits from it for a long time to come,” he says.
Mr. Lyew-Ayee was keen in pointing out that although reclaimed lands are still good for farming, farmers need to decide which crops are best for certain lands, what opportunities exist and if markets are available. For instance, he says, ackee and avocado do very well on reclaimed lands. “That is why the project with Walkerswood is such a good one, because here we are marrying the land with farmers, with a guaranteed market and tied to that also is the research and development work that we are doing.if we keep these together I can see a bright future, not only in terms of our bauxite mining sector, but also in terms of the related agricultural operations that can go hand in hand with mining.”
Asked what the future prospects were for the industry, Mr. Lyew-Ayee was nothing short of positive. “A lot of people are interested in Jamaica. We have had visitors from China and Russia, and then there are our regular partners from North America and Europe.and the bauxite and alumina business is bubbling at this time.”
This should come as no surprise as, added to the fact that Jamaican bauxite is easily mined, in terms of quality, our bauxite has 47 per cent of its content as alumina (aluminous oxide), ranking Jamaica in the upper-middle grade. In Brazil and Guinea, the bauxite is graded in the high 50’s, but it had the disadvantages of difficult processing, Mr. Lyew-Ayee points out, adding, “in Australia, although it has so much more bauxite than we do, the quality is not as good as ours, but it has vast quantities and energy to go with it, so, we are still blessed with ours.”
Speaking on the role of the JBI, the General Manager explains that the Institute allocated bauxite reserves to each mining operation and monitors their operations. The JBI also monitors the environmental aspect of each operation and working as an agent for the National Environment and Planning Agency (NEPA) and the Natural Resources Conservation Authority (NRCA), it ensures that the environmental programmes are followed.
“We have been able to get each company to establish environmental programmes, policies, staff and budgets. To a large extent, we have been able to surpass any other industry in the island in terms of environmental operations,” Mr. Lyew-Ayee declares, adding that one of the primary concerns was dust, which under the guidance of the JBI, the operations had been able to control.
Bauxite is mined mainly in the parishes of Clarendon, St. Elizabeth, St. Ann, Trelawny and to a small extent, in St. Catherine.