Bauxite News - Project

Government initiates winding up of BATCo

Jamaica-gleaner.com
The Ministry of Science, Technology, Energy and Mining has initiated the winding up of the Bauxite and Alumina Trading Company (BATCo), which it indicates is one step forward in its plan to merge administratively all government entities dedicated to management of bauxite resources.

Entities to be consolidated also include Clarendon Alumina Production Limited (CAP), the Jamaica Bauxite Mining Limited (JBM) and the Jamaica Bauxite Institute (JBI).

The entities will be merged or wound up in order to realise greater efficiencies in their operation under the current public-sector transformation programme.

The ministry issued a notice of the July 2 appointment of receiver Kenneth Lewis to wrap up the operations of BATCo. The company is profitable. During the last financial year, it invoiced UC Rusal J$1.53 billion for ore sold to that company.

The transaction involved the sale of 45,267 tonnes of alumina received from WINDALCO for BATCo's seven per cent share of that company.

In January, CAP took over from BATCo responsibility for marketing its alumina and overall management of its contracts.

Under the Government's master public-sector rationalisation plan, the ministry will retain the two main areas of energy and mining, but the privatisation of some entities and the winding up of others is being pursued for a more streamlined and cost-effective operation.

Mergers are recommended where overlapping mandates have been identified, and greater efficiencies can be realised, the master plan notes.

The ministry noted in a related Ministry Paper that activities of BATCo have been significantly reduced, with the positions of some staff being made redundant and some kept to meet audit needs and other "unavoidable activities".

The Ministry Paper said there would be no significant budget for the 2014-15 fiscal year as costs will be for the liquidation process and final audit.

BATCo's successor, CAP, is currently heavily indebted. Its overall debt stock at May 31, 2013 stood at US$493 million in principal and accrued interest, including US$163 million on a Bear Stearns bond, and US$330 million to other government entities, including the PetroCaribe Development Fund.

The addition of the contracts from BATCO is expected to improve CAP's bottom line.

Winston Hayden, chief executive officer of CAP, was not available for comment when Wednesday Business contacted his office, as he was said to be in all-day meetings yesterday.

BATCo was incorporated in 1977 as a limited-liability company, and was deemed an answer to the need for the Government to market its output of bauxite and alumina.

Its main purpose was the marketing of bauxite and alumina on behalf of JBM and CAP. In addition, BATCo supervised the operations of the JBM, which included the general administration and accounting functions.

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