Gov’t Selling Cap to Chinese Firm

The Government has entered into an agreement with Chinese firm, Zhuhai Hong Fan, for the sale of Clarendon Alumina Production (CAP) Limited.
CAP Limited was created in April, 1985 to represent the Government’s 45 per cent interest in a joint venture agreement with Alcoa in the bauxite mining and alumina refining operations at Jamalco in Halse Hall, Clarendon.
This was revealed by Prime Minister the Hon. Bruce Golding during his contribution to the 2010/11 Budget Debate in the House of Representatives Tuesday (April 20).
He noted that Zhuhai Hong Fan has an alumina supply contract with the Aluminium Company of China (Chalco), China’s largest aluminium company and has secured financing commitments from the China Development Bank.
He said that the sale is subject to the inherent rights of Alcoa, the joint-venture partner in Jamalco, which has a 90-day right of first refusal.
“Representatives of Hong Fan, Chalco, China Development Bank and Alcoa met in Jamaica last week, and we are optimistic that the agreement will be consummated. This, again, would lift a huge burden from the backs of the Jamaican people,” Mr. Golding told the House.
The Prime Minister said that Hong Fan is also committed to expanding the Jamalco plant from 1.2 to 2.7 million tonnes, provided adequate long-term bauxite reserves can be assured.
He noted that despite the fact that the plant operates at a relatively high level of efficiency, CAP was losing money on every ton of alumina produced.
Mr. Golding said that the Government has had to provide a total of US$176 million to meet CAP’s obligations to Jamalco. This was in addition to assuming US$369 million of debt for monies borrowed through CAP to help finance past budgets and cover its share of capital investment costs.
Minister of Energy and Mining, Hon. James Robertson, will provide additional details in the sectoral debate.
The Prime Minister also informed Parliament that the privatisation of the Port of Kingston is being linked to the plans for the development of the Caymanas Enterprise Zone, to facilitate investment in manufacturing and logistics enterprises that will create far more jobs than are provided merely by the handling of containers.
“(The) potential of the Port goes far beyond the movement of containerised cargo. It can play a significant role in supporting industries engaged in manufacturing, assembling and packaging the products that go into those containers,” he said.
The Prime Minister further revealed that the financing of the next phase of Highway 2000 (Sandy Bay to Williamsfield), the completion of the Mount Rosser bypass and the link from Golden Grove to Drax Hall are issues which the Minister of Transport and Works, Hon. Mike Henry, will address in the Sectoral Debate.