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2-year closure?

Govt, unions still awaiting definite timeline from JISCO/Alpart

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Wednesday, September 11, 2019

Neither the Government nor the trade unions representing employees at JISCO/Alpart bauxite refinery in Nain, St Elizabeth are yet in a position to give details on the timeline for upgrading the plant.

However, both have accepted the company's position that the refinery cannot continue operating under current internal and external conditions, and are prepared to pursue discussions on its approach to the project while a feasibility study of the plant is conducted.

Minister of Transport and Mining Robert Montague told his colleagues in the House of Representatives yesterday that, while his ministry has been aware of the negative effect that the closure will have on the Jamaican economy, as well as the surrounding communities and the employees, he was not in a position to give any further details than those released last week.

“I don't want to be held to a timeline before the completion of the feasibility study,” Montague told the House. However, he accepted that JISCO/Alpart had to take some action in light of the increasing cost of production, reductions in the international price of alumina and the breaking down of production units.

The mining ministry had confirmed last week that the second phase of the modernisation and expansion project would commence by October. The ministry also conceded that the upgrade will result in a laying-off of most of the staff at the refinery, but gave assurances that it will keep a percentage of the workforce for maintenance and execution of the modernisation.

Yesterday, in response to questions posed by Opposition spokesman on mining Phillip Paulwell, Montague admitted that until the company completes its current feasibility study, details such as the timeline for the upgrade and modernisation, as well as how it will affect the workers and the surrounding communities, would not be available.

“The indicative timeline is 18-24 months, but it is within the next 30 days that we will know what will happen for sure,” Montague said

Montague's position was supported by trade union sources, who told the Jamaica Observer yesterday that after Monday's initial meeting with the JISCO/Alpart management, they also had no details on the effect on the workforce and the communities.

“The minister is right. He could not give any better answers in response to the assumptions, as the process has not yet crystallised. There are still questions to be answered, but the discussions will continue, and as we go along we expect to get those details,” one union source said.

However, what seems to be crystallising is a phased closure of the plant, as some badly affected boilers, which are not functioning, will not resume because those spare parts are no longer available.

But Montague said that the Government was doing its part in trying to get the communities prepared for the closure by addressing irrigation issues linked to the Essex Valley water scheme which, he insisted, will come on stream as a result of “the deliberate actions of Prime Minister Andrew Holness”.

He noted also that, regarding the reclamation of mined-out bauxite lands, Jamaica has emerged as a leader in terms of how countries deal with their usage.

Montague also accepted a suggestion from Paulwell for the Government to give consideration to a revival of the International Bauxite Association as a worthwhile body to maximise co-operation in defence of the bauxite-producing nations.

He said that JISCO arrived at the decision to temporarily close down after considering various factors, including the workers' safety and welfare and the regularity with which segments of the plant failed to function properly, and in cases stopped functioning altogether.

He said that there was also the question of the high cost of production and high levels of waste, as well as the challenge of producing alumina at over US$480 per tonne, with the prevailing low and falling price of alumina on the world market. Montague noted that between 2016 and 2019 the price of alumina fell from approximately US$500 to under US$300 per tonne.

He said that there were also difficulties sourcing parts for old equipment, and the manufacturing of many of the parts and systems used by Alpart had been discontinued.

“Lest we forget, the plant is over 50 years old. Consequently, it has been difficult, time-consuming and expensive to acquire parts for much of the equipment within the refinery. Additionally, many of the parts obtained were cannibalised from closed refineries. Many of these second-hand replacement parts have therefore failed with a degree of rapidity that is financially unsustainable,” he said.

“The company decided that the best option at this time is to temporarily suspend alumina production to ensure an efficient upgrade process,” he said.