Noranda reserves US$13m cash for capital port, rail expansion
NORANDA Jamaica Bauxite Partners has US$13 million ($1.45 billion) available for further expansion this year.
The cash is to be used for ongoing capital and operational productivity improvements at its operations in St Ann.
The bauxite mining company's capital expenditure for the first half of 2014 was nearly US$5 million lower than was spent during the first six months of last year.
But Noranda's US$20-million expansion project aims to upgrade railway and port infrastructure used in its bauxite mining operation.
Higher shipping volumes increased the bauxite company's cost during the three months to June 30. Export of the mineral ore was nine per cent higher during the quarter than the corresponding period in 2013.
But cost of sales was down for the first half of 2014. It declined from US$59.5 million during the first six months of 2013 to US$56.2 million during the comparative six months this year.
"The decrease in cost of sales was primarily a result of lower fuel prices and shorter mining haul distances," said the company's parent, Noranda Aluminium, in its filing to the US Securities and Exchange Commission (SEC).
Export volumes of bauxite totalled 2.4 million tonnes, which was two per cent higher than year-earlier levels.
However, bauxite prices fell 10 per cent by the end of June.
"Bauxite segment sales, including intersegment sales, for the six months ended June 30, 2014 were US$60.1 million, compared to US$65.6 million for the six months ended June 30, 2013," said Noranda Auliminium. "Lower realised pricing decreased sales by US$6.7 million, offset by higher shipment volume increasing sales by US$1.2 million."
As a result, the bauxite realised segment profit of US$1.2 million for the six months to June 30, compared to US$4.9 million in the six months ended June 30, 2013.
"The decrease in segment performance was driven by lower internal and external selling prices, which offset favourably lower fuel prices and shorter haul distances," said the filing to the SEC.