PM Says Jamaica Will Have to Reposition Ownership of its Bauxite Operations

Prime Minister the Hon. Bruce Golding has said that the Government will have to reposition ownership of the country’s bauxite/alumina operations, in addition to addressing problems such as energy and technology, before any revival in the industry.
“We are going to have to reposition our bauxite/alumina operations, not only in terms of the technology and investments that have to be made, but also in terms of the control and ownership,” Mr. Golding said.
“What is there now does not offer us any assurance and any security for the future,” the Prime Minister said.
Mr. Golding was speaking at Tuesday night’s first Town Hall Meeting to discuss the implications of the 2009/2010 budget with the public, at the Golf View Hotel, Mandeville, Manchester.
A large crowd turned up at the meeting, including several representatives of Mandeville’s business sector and bauxite officials, to hear from Mr. Golding; Minister of Finance and the Public Service, Hon. Audley Shaw; Minister of Energy and Mining, Hon. James Robertson; and Minister with responsibility for Information and Telecommunications, Hon. Daryl Vaz.
Mr. Golding addressed the bauxite/alumina fallout extensively, in light of the industry’s importance to the economy of central Jamaica, which includes Manchester.
He said that significant capital investments were needed in rebuilding the plants, and to put in new technology and equipment to ensure competitiveness.
“Nothing short of that is going to cut it in the future,” the Prime Minister observed.
He expressed grave concern about the future of United Company RUSAL, the cash-strapped Russian company regarded as the world’s largest producer of aluminium and alumina, which currently owns 55% of Jamaica’s industry, and reported that the Government was speaking with other partners.
“We better start looking for our salvation, because I am not sure we can depend on them to provide the rescue and resuscitation that is necessary,” he said.
Mr. Golding said that the chances of reopening the plants that have closed down – Windalco’s Kirkvine and Ewarton operations and ALPART in St. Elizabeth- will depend significantly on the country’s ability to find cheaper sources of energy.
He noted that Jamalco, in Clarendon, which is part- owned by the Government, is still active because it has invested heavily in improving technology and efficiency, to the extent that it can produce a tonne of alumina at nearly half the price of ALPART and Windalco’s operations.
He said that the Kirkvine plant, which is over 50 years old and uses old technology, has also exhausted its “red” bauxite and left with the “yellow” quality which uses a tremendous amount of energy to process. However, a technical team is currently exploring the possibility of the plant producing a special type of alumina, used in pharmaceuticals and cosmetics, which is its best option.
Mr. Golding said that Mr. Robertson has been asked to fast-track efforts to introduce an alternative energy policy using natural gas.
He said that local bauxite/alumina production would not be competitive unless it can be reduce the over US 20 cents per kilowatt hour energy available in Jamaica, to under US 10 cents per kilowatt hour.
He added that the Government was looking at a number of options for a steady, reliable supply of natural gas, which would pave the way to inviting investors to put in the necessary facilities for conversion which is critical to the future of the bauxite industry in Jamaica.