Alumina, bauxite exports continue to rise

Wednesday, June 29, 2011    

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ALUMINA export volumes jumped by 65 per cent for the first five months of 2011, when compared to the corresponding period last year.

Preliminary data from the Port Authority of Jamaica (PAJ) showed that exports of alumina leaving ports Rocky Point, which is operated by Jamalco, and Esquivel (Windalco) totalled 874,246 tonnes during the review period, or 65.3 per cent more than the first five months in 2010.

Jamalco's output was 20 per cent higher, or 631,749 tonnes up to May 2011 compared to 526,780 tonnes for the five-month period in 2010.

Windalco, which restarted its Ewarton operations last July and which only shipped 2,001 tonnes in the first five months of 2010, exported 242,497 tonnes of alumina during the review period.

Upon reopening, Windalco Ewarton expected to produce 321,000 tonnes of alumina for a half year's production from its 650,000-tonne capacity, while current export levels suggest that the lone plant will ship 580,000 tonnes from Esquivel this year.

Windalco's parent, UC Rusal, in February announced plans to restart its Kirkvine operations -- which has the capacity to produce approximately 600,000 tonnes of alumina a year -- next month. Company officials said that Kirkvine would output 252,000 tonnes of alumina for the second half of 2011.

According to Business Observer calculations, should the alumina companies continue to export at current levels and Kirkvine is reopened as scheduled, then total alumina exports should surpass 2.3 million tonnes, which is 50 per cent higher than 2010 levels and 23 per cent higher than 2009 levels.

The output would still represent only 59 per cent of 2008 levels, when all four refineries were still in operation, including Alpart in St Elizabeth, for which no plans of reopening have been determined, except for the mining ministry referring to 2012 as a possible start date.

Most recent balance of payments data from the Bank of Jamaica (BOJ) showed the indicative price for alumina for January to February 2011 was 16 per cent higher than year-earlier levels, given that earnings from alumina exports totalled US$56.6 million for January to February 2010, when approximately 233,500 tonnes were shipped from Jamaica's ports and totaled US$95.5 million for the 338,800 tonnes shipped.

Consequently, should prices remain stable throughout 2011, Jamaica's earnings from alumina exports could exceed 2010 levels by as much as 74 per cent but would represent less than 57 per cent of 2008 levels.

The PAJ data also showed crude bauxite exports were 23.4 per cent higher during the review period than during the first five months of 2010, while BOJ data suggested that the price of bauxite was five per cent lower than year- earlier levels.

Noranda Holdings -- parent of the sole bauxite exporter Noranda Jamaica Bauxite Partners (NJBP) -- said profit from its bauxite operations fell by 17 per cent during the first quarter of 2011, despite a 13 per cent rise in sales to external customers. The company said the decline in profit was due to higher energy and shipping costs.

The increase in sales primarily related to the favourable impact of higher external shipment volumes as a result of our agreement with the Government of Jamaica to increase our annual shipments to 5.4 million dry metric tonnes during each of the years 2011 and 2012 from 4.5 million dry metric tonnes under the previous agreement.

Noranda, late last year, started an US$8-million expansion at its bauxite-mining facility in Jamaica, which will allow the company to increase shipping volumes and lower our costs, while supporting the new contract with our third party bauxite customer.

The company said it concluded the first phase of the expansion, having invested US$4.3 million (excluding US$2 million that remains accrued as of March 31, 2011) up to the end of the first quarter of 2011.




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