Jamaica’s bauxite levy waiver for UC Rusal has many dimensions to it

Jamaican government’s recent decision to waive off bauxite levy for UC Rusal operated Windalco has raised many questions among the opposition. In a situation when profit making has become easier in the wake of declining oil prices this decision is being viewed as somewhat inappropriate on the part of the government. However, mining minister Mike Henry says the waiver was necessary for the sake of the domestic bauxite industry itself.

Source: Wikimapia

Leading integrated aluminium producer UC Rusal operates two plants - Ewarton and Kirkvine under Windalco bauxite and alumina production complex in Jamaica. Back in 2013, in the face of rising oil costs and falling prices of aluminium, the country's the then administration entered into an agreement with UC Rusal that saw it waiving off bauxite levy for 2013-2014. The deal has been extended multiple times after that. The last extension was signed in July 2016 for a period up till March 2018. This time, amendments were made giving a full bauxite waiver to the company, though the oil prices have improved significantly.

Dr. Peter Phillips, leader of opposition questioned “on what basis did the minister and the Government make the judgement?”

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To this, Mike Henry replied that the bauxite waiver was necessary to keep the bauxite-alumina complex open and save jobs.

"They (UC Rusal) wouldn't buy our deal unless this agreement was entered into. And we have now got from them the expansion process that relates to both plants (Ewarton and Kirkvine)," he said.