Paulwell: Noranda bankruptcy filing has nothing to do with bauxite levy row

Minister in charge of mining, Phillip Paulwell, has dismissed speculation that the bankruptcy filing by Noranda Bauxite’s parent company in the United States is in any way related to the recent arbitration ruling in favour of the Jamaican Government’s right to be paid the full bauxite levy that the company owes.

Paulwell, in a release late Tuesday, pointed out that Noranda has been facing challenges with its upstream and downstream operations for some time. “The bauxite levy is minuscule compared to the external liabilities of the company, its refining operations, as well as depressed market demand,” he argued.

The Jamaican Government owns roughly half of the assets of Noranda Jamaica Bauxite Partners, which is managed and operated by Noranda Bauxite Limited, a subsidiary of parent company Noranda Aluminum Holding Corporation (NAHC).

NAHC on Monday announced that it had filed voluntary petitions for a court-supervised restructuring process under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the Eastern District of Missouri.

“In light of the challenging market conditions for the aluminium industry and the recent disruptions in our primary business operations, the board and management team, with the support of our principal lenders, determined that undertaking this court-supervised process is in the best interests of Noranda and its stakeholders. We believe this court-supervised process will provide us with time and financial flexibility to evaluate options to enhance the sustainability of our major business operations,” NAHC’s President and Chief Executive Officer Kip Smith stated.

Paulwell noted the concerns that the levy ruling would impact Noranda’s operations, but argued that the company was already experiencing severe challenges even before negotiations began with the Government about the payment of the bauxite levy.

The NAHC, in its statement, also said: “Noranda Bauxite Limited is continuing production and its partnership with the Government of Jamaica at its Noranda Jamaica Bauxite Partners mine in St Ann, Jamaica.”

Still, 500 bauxite workers’ jobs remain on the line, a problem which Paulwell said he is hoping to have resolved in spite of the bankruptcy filing. To this end, the minister has scheduled a meeting for tomorrow with the management and unions representing the workers.

“The Government is exploring all avenues to protect the jobs of the 500-plus workers and the operations of the plant going forward. We are still in discussions with our existing partners and have adopted a tripartite approach involving the management, the labour unions, and ourselves as the Government,” he stated.