Government to dicontinue divestment of shares in loss-making CAP

In an unexpected about-turn, the Government has announced it will discontinue the process of divesting its shares in the loss-making Clarendon Alumina Partners.

The government has been attempting to offload its 45 per cent interest in the Jamalco Refinery held by CAP which has been racking up billions of dollars in losses.

Making his contribution to the Budget Debate this afternoon, Mining Minister, Phillip Paulwell, said Cabinet made the decision to keep CAP after it received and considered a report from its negotiating team.

He said he’s now awaiting approval from the boards of the proposed buyer Glencore and Alcoa, which owns CAP’s remaining shares, before making the report public.

Paulwell said the approval from both entities is expected by month-end.

He said shortly after assuming office in January last year, it was discovered that negotiations under the Jamaica Labour Party Administration with Glencore, were nowhere near complete.

Paulwell said at the time of his appointment, no meeting of the joint venture Executive Committee had taken place for almost a year, despite production being done on behalf of CAP and Alcoa.

He said this meant that Alcoa was left to run the plant without oversight from the committee.

The divestment of CAP, was one of the unfulfilled requirements of the standby agreement between the previous JLP Administration and the International Monetary Fund.

CAP reportedly racked up US$102 million in losses in the last two financial years.