Followinbg years of below optimum performance, the Jamaican economy seems ready to reclaim its piece (as small as it may currently be) of the pie in the Bauxite Mining sector.

Making the announcement during his Sectoral Debate presentation in the House of Representatives last week, Minister of Transport and Mining, Michael Henry indicated that refining operations at the St Elizabeth based Alumina Partners of Jamaica (ALPART) are set to resume during the current financial year.

He says the government is currently working through the issues with Russian aluminium company UC RUSAL to see the way forward for the Alpart plant.

History of Bauxite Mining in Jamaica

According to the Jamaica Bauxite Institute, mining and processing company Reynolds began ex­porting bauxite from Ocho Rios in June 1952, and Kaiser followed a year later from Port Kaiser on the south coast. Alcan built the first alumina processing plant near its mines at Kirkvine, Manchester, and in early 1952 began shipping alumina from Port Esquivel. This was the beginning of the industry in Jamaica.

By 1968, Alcan had brought the capacity of its two refineries to more than 1 million tonnes a year. In 1969 a new plant was commissioned at Nain, St. Elizabeth, by Alpart, then a consortium of Kaiser, Reynolds and Anaconda, another U.S. company. In 1971, Revere Copper and Brass opened the island’s fourth alumina plant at Mag­gotty, St. Elizabeth. Two years later, Alcoa, which had been shipping un­processed bauxite since 1963, built the country’s fifth refinery, at Halse Hall, Clarendon.

By 1974 Jamaica had become the world’s second largest producer of bauxite and the second largest exporter of alumina. However, no aluminium smelters were built in Jamaica, and it is unlikely that any will be, the JBI states, largely because aluminium smelting or reduction requires massive amounts of electrical energy.

In 1971 Australia overtook Jamaica as the world’s leading producer of bauxite.. At the end of the 1970s, Guinea in West Africa, which had the world’s highest- grade bauxite, also drew ahead of Jamaica, and was then followed by Brazil in the early 1980’s and China and India in the first decade of this century.

Bloomberg on China’s Growing Demand for Alumina

This announcement follows concerns raised earlier this year regarding how Jamaica intended to compete with other alumina hubs as China’s demand for Alumina grows.

In an article published on March 30 and entitled “Berserk’ Aluminum Boom Signals Ore Bonanza for China’s Quarry”, analysts from Bloomberg said that “demand in China for the aluminum needed in air conditioning units to airliners will rise by almost a third by 2020 while supplies of adequate raw materials to produce the metal are dwindling.”

Bloomberg says the Chinese’ choice will be Australia. “Australia is the logical choice,” Darryl Pilgrim, Sydney-based industry director for aluminium and alumina at researcher AME Group was quoted as saying. Currently, China consumes about 54 per cent of Australia’s resource exports, Bloomberg stated.

The Bauxite Institute notes that Australia remains the world’s largest bauxite producer with output of 63 million tonnes in 2008, the year preceding the global economic downturn which had a deep impact on the bauxite/alumina industry.

In second place was China at 32 million tonnes followed by Brazil (25 million tonnes), India (20 million tonnes) and Guinea (18 million tonnes).

The JBI notes that Jamaica had by then fallen to sixth place in the world, producing 14.6 million tonnes of bauxite.

Reclaiming its Piece of the Pie

Following the ALPART refinery’s closure in 2009, the plant was reopened on a reduced production schedule in 2010. In October 2012, UC RUSAL, entered into several agreements with the Government for various steps to be taken to ensure its long-term viability.

In February 2016, it was disclosed by Jamaican government sources that owners of UC Rusal had signed an agreement with a Chinese firm for the purchase of a bauxite mining and alumina processing plant located at Nain, St. Elizabeth, in the south of Jamaica.

UC RUSAL has been in negotiations with Jiuquan Iron and Steel Company (JISCO), the largest iron and steel company in China, to buy its Alpart refinery.

On April 21, 2016, a delegation comprising representatives from JISCO, UC RUSAL and China Development Bank met with Minister Henry and other functionaries from the Ministry to discuss the issues relating to the acquisition of Alpart by JISCO.

Jamaica’s share of world bauxite output fell from 18.1% in the 1970s to about 7.1% of total world production of 205 million tonnes in 2008. The island by 2012, had over one-half of the country’s alumina capacity still closed, with output hovering around the 10 million tonne per annum mark.

Alpart’s current production capacity is approximately 1.7 million tonnes of alumina annually but is capable of expansion to over two million tonnes per annum.

With Chinese demand growing, Jamaica could arguably seize the moment to restart mining operations which garnered some US$4 billion in levies collected over 40 years.