CHEAP electricity from coal is expected to put Jamaica's alumina sector on even keel with the rest of the world in terms of production costs.
Meanwhile, capital investments totalling over US$110 million in bauxite and alumina is scheduled to commence this year.
But slow recovery in global prices for aluminium - the metal derived from the red ore extracted domestically - will mean that operators in the sector, locally and abroad, will have to survive another tough year.
Perhaps more importantly, prices may not rebound to levels that would make the reopening of Alpart in St Elizabeth and Windalco's Kirkvine plant in Manchester economically feasible this year.
"Projections are for a slow recovery," said Pansy Johnson, president of Noranda Jamaica Bauxite Partners. "It is not going to get back to levels which will make alumina companies comfortable."
It might be 2014 before that happens.
Average Caribbean-sourced alumina spot prices over the first nine months of 2012 have decreased 20.3 per cent to US$310.94 per tonne compared to US$390.11 for the same period in 2011.
Externally, the deepening financial and debt crisis in the Eurozone, a slowdown in Chinese economic activity, and investors moving out of high-risk financial assets, including commodities, put downward pressure on aluminium prices, to which alumina and bauxite prices are pegged.
The global price of aluminium decreased during the nine-month period ending September 30, 2012, to an average of US$2,025 per tonne, which was 19 per cent lower than the comparative period of 2011.
"For companies to survive, they will have to manage their cash really well," said Johnson. "The survival period should run through 2013."
Local refineries will have likely ended 2012 exporting 12 per cent less alumina than the two million tonnes recorded in 2011, while Noranda's bauxite sales overseas last year should have totalled approximately six per cent less than the 6.2 million tonnes the year before.
Johnson is projecting similar production levels this year for Noranda, which she doesn't expect will repeat its peak performance of two years ago in 2013.
Noranda plans to start a US$11-million ($970-million) expansion of its harbour capacity at Port Rhodes in Discovery Bay this year.
The project, which follows on a US$6-million investment that raised the pier's capacity from 4.5 million tonnes to 5.4 million tonnes a year in early 2011, consists principally of harbour dredging and focuses on further reducing costs and providing greater flexibility for shipping activities.
The project is expected to commence by the second quarter of 2013.
UC Rusal's planned US$100-million ($9.2-billion) improvement for its Windalco Ewarton operations, to build a coal-fired electricity-generating plant, is also scheduled to start this year, with a 2015 completion earmarked.
Mining minister, Phillip Paulwell, said that the project is part of plans by the Russians to make Ewarton a "home base" and not a "swing plant" within the next three years. He also hopes that it might lead to prospects for reopening Alpart and Kirkvine, which combined represents approximately half of Jamaica's alumina refinery capacity.
However, it's not only depressed prices and low output in the year ahead for the local mining sector, which likely declined by close to 10 per cent in 2012.
The Statistical Institute of Jamaica placed employment by the mining and quarrying sector at 4,500 in July, or 800 more than a year earlier.
What's more, domestic limestone and aggregates are seeing better days.
Edgar Cousins said there is "definitely unfulfilled demand for limestone".
The director of Lydford Mining, which has limestone quarrying operations in St Ann, said that his company has been expanding into new markets.
A couple years ago, it secured a contract with New York-based TBS Shipping to supply high purity limestone to US over the next ten years.
More recently, it has sent shipment to South America.
"We shipped to a number of new customers, including 33,000 tonnes to Chile," said Cousins.
Limestone prices are actually higher now than a year ago, he said.
But domestic demand for the company's aggregates — which it mines from its operations in St Mary and, as at the end of February, its new facility near May Pen — has been on the rise.
"The highways that are being built are going to create a lot of demand for local aggregate - sand and gravel," said Cousins.
Lydford set up an operation in May Pen to supply Bouygues Travaux Publics on its Highway 2000 extension from Sandy Bay to just east of the Rio Minho bridge at Glenmuir Road.
"We supplied 150,000 tonnes of aggregate for that project," said Cousins. "Coming out of that, we are setting up a complete mining and quarry operation there by the end of February."
Four Rivers, which is a joint venture with Jamaica Producers and which is located in St Mary, is supplying some of the aggregate needed for the runway resurfacing and extension at the Sangster International Airport in Montego Bay.
But demand is expected to surge when construction on the North-South highway, which should connect Kingston to Ocho Rios, is at full pace.
That project includes a 240-kilometre, multi-lane highway and restoration of a breakaway in Mount Rosser.