Minister of Science, Technology, Energy and Mining (STEM), Hon. Phillip Paulwell, says that the Clarendon Alumina Partners (CAP) will no longer be a financial burden on Jamaica.
He stated that “the Consolidated Fund will no longer be supporting CAP” adding that “very soon the entity will operate on its own”.
The Minister was addressing Government’s decision to retain its stake in CAP, during the post -Budget press conference at Jamaica House on Thursday, April 25.
Jamaica owns 45 per cent interest in Jamalco, which is vested in CAP, and the Government had been attempting to sell its stake in the loss-making company to Glencore. Alcoa owns the other 55 per cent.
In his Budget Debate presentation a day earlier, the Minister announced that the Government has decided not to continue with the divestment, on the recommendation of itsnegotiating team.
Mr. Paulwell told journalists that the Government has signed off on an energy solution for Jamalco, which will see the cost of production falling dramatically, thereby allowing the company to once more become profitable.
“That is how we are going to clear the $26.9 billion that we have accumulated overtime,” he stated.
The Minister said he could not divulge details of the arrangement at this time, but assured that he would update the nation at the appropriate stage.
He informed that the arrangement will enable the company to continue operating, in order to preserve jobs, and more importantly, to provide a brighter future for Jamalco.
“This energy solution is going to be pursued in a similar way to what was done with UC Rusal,” he said.
The Government, in 2012, was able to secure a deal with the Russian-based company to maintain operations at the Ewarton refinery in St. Catherine and save 600 local jobs. As part of the arrangement, the company is investing US$100 million in a coal-fired electricity generating system for Ewarton.
As it relates to ALPART and Kirkvine, which remain closed, UC Rusal says it will be switching from oil to gas as the main energy source, which will enable the restart of operations at the plants.
UC Rusal had ceased operations at the three plants in 2009, due to the downturn in the global aluminium market, and the high cost of oil.
By Athaliah Reynolds-Baker, JIS Reporter