Jamaica government seeking to divert shares in alumina company

The Jamaica government says it is still interested in divesting its shares in Clarendon Alumina Partners (CAP).

Science, Technology, Energy and Mining Minister Phillip Paulwell said all options will be considered for the sale of the government’s 45 per cent stake in Jamalco, which it owns through CAP.

He said that prospects for a recovery of the aluminium market would be among considerations guiding the divestment process.

The Bruce Golding administration had approved the sale of the government’s interest in CAP, to pave the way to finalise ongoing negotiations with the International Monetary Fund (IMF) on the targets contained in the US$1. 27 billion Stand By Agreement (SBA).

The government said then that the process of divestment had gone some way and that one buyer had expressed an interest in the entity.

However, Paulwell said that while discussions on the divestment continue, the country is not as close to selling the entity as it was led to believe.

He said that discussions were being held with Alcoa, (which jointly owns Jamalco with the government), as well as with Glencore, one of the world’s leading integrated producers and marketers of commodities.

CAP is set to cost the country more than J$5 billion (US$57.6 million) this fiscal year, and Paulwell said the failure of the timely divestment and settlement of its liabilities was a major factor in the Third Supplementary Estimates of Expenditure for the 2011/12 financial year, tabled earlier this week in the House of Representatives.

Paulwell said the government is trying to sell the entity, to remove the burden being placed on noting.

He said given the critical importance of energy to the mining and bauxite processing operations the government is promoting a policy, which allows the prospective owners the opportunity to utilise “least-cost” energy arrangements.