Business

Noranda's bauxite profit squeezed

BY CAMILO THAME Business Co-ordinator thamec@jamaicaobserver.com

Sunday, October 28, 2012    

Print this page Email A Friend!


NORANDA Jamaica Bauxite Partners saw its third-quarter profit plunge on near historically low aluminium prices.

The subsidiary of US-based Noranda Aluminum Holdings posted a profit of US$0.3 million ($27 million) for the three months to September 30, compared to US$6.8 million in the corresponding period in 2011.

Lower bauxite prices, which are linked to LME prices for aluminium, the finished product derived from the red dirt ore, and increased shipping demurrage costs.

"Our third-quarter 2012 results reflect LME levels which reached near historical lows during the quarter," said Layle "Kip" Smith, Noranda Alumina's president and CEO. "We are prudently managing our balance sheet and cost structure through the current LME environment.

Persistent global macroeconomic concerns, particularly the European sovereign-debt crisis and fears of slowing economic growth in China, have dampened LME aluminium prices since the second half of 2011.

Bauxite sales leaving Port Rhodes in Discovery Bay, St Ann, fell from US$40.9 million during the third quarter of 2011 to US$33.9 million during the three months ending September 30, 2012.

Shipment volumes to third parties actually increased from 620,000 tonnes to 670,000, but exports to Noranda's alumina refinery in Gramercy, Louisiana, fell from 750,000 tonnes to 600,000 tonnes.

The average price paid by external parties for Noranda's crude ore fell by 28 per cent over the year, but the internal price remained relatively flat.

Overall, Noranda Alumina, which also has a smelter, which converts Gramercy's alumina into sheets of metal, posted net income of US$3.8 million for the quarter under review, compared to US$30.8 million during the comparative three-month period in 2011.

ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

Poll

Should the next Police Commissioner be recruited from overseas?
Yes
No


View Results »


ADVERTISEMENT

Today's Cartoon

Click image to view full size editorial cartoon
ADVERTISEMENT