Government unlikely to give in to Noranda's bauxite levy waive-off demand

Against Noranda Aluminum Holding Corporation's recent decision to lay off a huge chunk of its workforce if the Government did not reconsider its plans to collect outstanding levy from them, Finance Minister Dr Peter Phillips, said the Government believes it can collect the revenues without impairing the ability of the company to survive.

"We believe that we can both collect on our money and keep the company working, but we cannot give away depleting, non-renewable resources of Jamaica without getting what is provided for, in law, for the people of Jamaica," Phillips said yesterday.

Noranda Aluminum Holding Corporation has announced it will be moving ahead with job cuts, as it is failing to cope with several challenges, including the insistence of the Jamaican Government to collect the full bauxite levy. A press release issued by the company's head office in Tennessee, United States, says 190 jobs will be cut.

Asked if the Government would risk job losses by not granting Noranda its wishes for an extension of a levy waiver, Phillips said that "our purpose is the protection of Jamaica's interest in relation to the industry as a whole, not any particular firm".

"We don't have any hostile disposition to any firm nor do we have an obligation to any particular firm, but to the entire Jamaica and I believe that there are many many opportunities to keep the industry operating if the problems that Noranda faces, which have nothing to do with Jamaica, become overwhelming for them," the minister said.

"The clear understanding was that this arrangement would cover the period 2008-2009 to December 31, 2014, and that Noranda would revert to the standard regime on January 1, 2015," Phillips told Parliament last year.

The bauxite levy that Noranda owes to the government amounts to approximately US$7 per tonne, which is reflective of a base rate of US$5.50 per tonne, plus increments determined by a specified formula.