Jamaican opposition uneasy with Govt’s exchange deal with Clarendon Alumina

The opposition has raised concerns about recent developments in Government's efforts to dispose of over US$400 million ($30 billion) in debt triggered by the 2004/05 alumina forward-sale agreement with global metals and energy trader Glencore International.

Opposition spokesman on finance, planning, growth, and economic development, Audley Shaw told the Jamaica Observer yesterday that his party is concerned about a number of issues emanating from recent reports on Government's efforts to tidy up the deal, including a one-to-one debt exchange of principal being offered to Clarendon Alumina Partners (CAP) noteholders by the Government; a reported contract with Hong Kong-based Noble Resources for the sale of CAP's alumina; and Glencore filing a claim against CAP in London for trading with Noble Resources.

Last week, Minister of Science, Technology, Energy, and Mining, Phillip Paulwell, told the Business Observer that, in an effort to ensure the best possible arrangement for Jamaica at this time -- one which was consistent with the overall economic strategy of the country -- it had become necessary to review previous contractual arrangements in order to maintain and diversify the markets for Jamaica's alumina exports.

Against this background, he said Cabinet had decided to accept an option provided by Noble, which offers more advantageous arrangements for Jamaica and removes CAP as a burden on the national budget, consistent with the country's agreement with the International Monetary Fund.

But Shaw said that the Opposition was concerned about the effect of the new arrangement with Noble Resources on the new debt exchange, which will result in the conversion of US$162 million ($16.2 billion) in debt owed by CAP to bonds that will be owned by the Government.

"They need to bring to Parliament all the details of this exchange offer, and to indicate whether there are consequences for the Government in terms of additional costs resulting from the debt exchange," Shaw said.

Shaw said that the Opposition is demanding that the Government table the details of the new contractual arrangements with Noble, and explain the basis on which Glencore has taken CAP to court in England.

He said that the Opposition and the Jamaican taxpayers needed to know if there is a continuing supply agreement with Glencore, which has now led to the contention in the English courts.