Jamaica Producers Group Limited (JP) is on the hunt for a lessee for subsidiary Four Rivers Mining Company (FRM), as that entity continues to be a drag on group performance. The search is on for a third party operator.
Losses for FRM quoted in the groups financials for the year ended December 31, 2015 were $341 million, this compared to previous loss of $85.5 million in 2014.
Four Rivers produces aggregates for construction and paving.
In 2015, efforts were made to restructure the enterprise, which also resulted an exceptional charge of $197 million.
JP invested $150 million to set-up Four Rivers in 2010, acquiring a 51 per cent stake and entering the business with the aim of commercialising deposits of high-grade river aggregates that were available on its land holdings in St. Mary and St. Thomas.
The project was expected to have a 20 per cent return on equity. The other main partner is Lydford Mining.
Chairman CJ Johnston said in the preamble to the 2015 results that it has been concluded after “ thorough review” that aggregate mining “is not core to our operations,” and “as such, going forward we will seek to transition our arrangements to a business model that generates value from our aggregate deposits primarily through royalties from third party operators.”
He said that FRMs disappointing year arose from increased costs and challenges in securing river aggregates as a result of their depletion due to the on-going drought, adding, “we also faced significant challenges with the efficiency and reliability of our plant and equipment.’
Otherwise, the year ended saw JP group -which is inclusive of a total 24 subsidiaries, one joint venture, two associated companies , plus core farming and manufacturing operations – generating revenues of J$8.7 billion in 2015.
Earnings for the year were $614.57 million, a 95 per cent improvement on net income of $314 million in 2014.