Minister of Science, Technology, Energy and Mining, Hon. Phillip Paulwell, has said that divestment of the Government’s shares in Clarendon Alumina Partners (CAP) is still subject to discussions with interested parties.
The Minister, was addressing the introductory meeting with the newly installed board of CAP at the Jamaica Bauxite Institute in Kingston on March 21, said all options will be considered for the sale of the government’s 45 per cent stake in Jamalco, which it owns through CAP.
He indicated that prospects for a recovery of the aluminium market, or resurgence in demand, going forward, are considerations which will help to guide the divestment process.
The previous administration approved the sale of the government’s interest in CAP, to pave the way to finalise ongoing negotiations with the International Monetary Fund (IMF) on the targets contained in the stand-by Agreement. It was indicated at the time that the process of divestment had gone some way and that Glencore was interested in the entity.
However, during today’s board meeting, Minister Paulwell stated that while discussions on the divestment continue, the country is not as close to selling the entity as it was led to believe.
He explained that discussions are being held with Alcoa, (which jointly owns Jamalco with the government), as well as with Glencore, one of the world’s leading integrated producers and marketers of commodities.
CAP is set to cost the country more than $5 billion this fiscal year, which ends in March, and the Minister observed that the failure of the timely divestment and settlement of the liabilities of CAP, was a major factor in the Third Supplementary Estimates of Expenditure for the 2011/12 financial year, tabled yesterday (March 20) in the House of Representaives.
The government is trying to sell the entity, to remove the burden being placed on taxpayers. Importantly, also, it is desirable that any deal going forward will ensure the continued operation of the plant, which provides significant direct employment and hard currency national income.
The Minister, who also has portfolio responsibility for energy, emphasised that given the critical importance of energy to the mining and bauxite processing operations, amid the “high cost and volatility of oil prices”, the government is promoting a policy, which allows the prospective owners the opportunity to utilise “least-cost” energy arrangements.
By Allan Brooks, JIS Senior Reporter