Jamaican Finance minister moves to allay fears as bauxite giant Rusal posts loss

NEWS that Russian aluminium producer UC Rusal has posted a US$3.2-billion loss for 2013 has raised fresh concerns about the future of Jamaica's bauxite industry and questions as to whether the company will resume full production here.

UC Rusal owns three local bauxite alumina plants, of which only one, Ewarton, is operational. However, the Russian company has insisted that it will reopen the others by 2016, using less expensive energy. UC Rusal's plants at Alpart and Kirkvine, have been closed since 2009.

On Tuesday, Minister of Finance and Planning Dr Peter Phillips moved to allay fears, assuring the House of Representatives that Jamaica is meeting its international obligations to the sector, and that UC Rusal's plans for expanding its operations in Jamaica by 2016 are still on target.

"Rusal has indicated that they are in Jamaica to stay. I would say that bauxite and alumina has a healthy future in Jamaica, which will firm up as the world economy moves into a period of growth," said Phillips.

Phillips was keen to point out that bauxite and alumina had actually shown growth in the last two quarters.

A full update on the future of UC Rusal's Alpart and Kirkvine operations is to be given by Minister of Science, Technology, Energy and Mining Phillip Paulwell to the House of Representatives in the upcoming budget debates, said Phillips.

Phillips was responding to questions raised by Audley Shaw, the Opposition spokesman on finance and planning, as to whether the Government had been meeting its bauxite/alumina obligations on a timely basis, and whether the proposed UC Rusal expansion was on target.

UC Rusal owns 100 per cent of the shares in Alpart, in St Elizabeth, and a 93 per cent share in the West Indies Alumina Company's (WINDALCO) plants at Kirkvine, Manchester, and Ewarton, St Catherine, with the Government owning the other seven per cent in both.

Ewarton and Kirkvine were closed in 2009, but Ewarton resumed production in 2010. US producer Alcoa operates Jamaica Alumina Co (Jamalco), Clarendon, in partnership with the state-owned firm Clarendon Alumina Production Limited (CAP), which owns 44 per cent.