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ALPART'S BIG US$-MILLION LOSS

Broken down boiler results in no production, raises concern about bauxite/alumina plant's future

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Sunday, December 30, 2018

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Just 18 months since the dramatic resumption of bauxite and alumina production at the JISCO Alpart facility at Nain in St Elizabeth, concern is being raised about its future.

The plant has not produced for the past seven days, and it is not expected to resume production until later this week. There is concern that with the loss of 10 days' production, due to a breakdown in its boiler system, as well as the constant threat of industrial action from workers seeking union representation, the company has fallen behind its current production projections. It is estimated that losses so far have been substantial, running into several million US dollars as a result of the latest distraction.

Production was halted on December 23, after the last of its five boilers, which were part of the assets that Chinese firm JISCO, which stands for the Jiquan Iron and Steel Company, acquired when it bought the plant from Russian aluminium giant, UC Rusal, in 2016 for US$299 million, went down.

The boilers have already taken seven days to be repaired, and are expected to be out for at least another three days before normal production can resume, as they were not properly closed down. In the meantime, the plant has remained open, but there has been no production.

Sources told the Jamaica Observer yesterday that up to Friday it was acknowledged that the break in production has already set back production predictions for the current period by close to US$5 million. Some predict that it could add up to close to US$15 million by the time things get going again.

The situation has angered Minister without Portfolio in the Jamaica House-based Ministry of Economic Growth and Job Creation, Mike Henry, whose portfolio includes oversight of the JISCO investments plant, as well as plans to invest over US$3 billion to undertake developments such as an industrial park in Nain.

Henry told the Sunday Observer on Friday that he is concerned about the aged equipment that JISCO acquired from former owners UC Rusal when it bought the plant, as well as the nagging industrial relations situation which involves three local trade unions seeking to represent over 400 workers at the plant.

There is also concern that the December date, which had been announced for the signing of the agreement on the creation of the industrial estate, will not be observed.

“I have great concern that the major investment projects may be affected, if these issues continue to affect production at the plant,” Henry said.

He noted that the framework agreement for the JISCO-financed projects are expected to bring overall investment of US$6 billion to the Jamaican economy, generating approximately 60,000 jobs, and including the creation of a US$3-billion Gansu Industrial Park and Special Economic Zone in Nain, which is to be spearheaded by the Jamaica Special Economic Zone Authority (JSEZA).

Henry also pointed out that the prospects are looking bright for employment of more Jamaicans at the plant, with 27 young Jamaicans returning to Jamaica from China on December 24, after successfully completing advanced engineering training there to qualify for immediate employment at Alpart. A second batch of 27 Jamaicans are expected to return home from similar training next month.

He said that he expects that the project will lead eventually to net Jamaican employment at the plant, providing work for some 1,800 Jamaicans.

“All of this is what Jamaica should be accommodating, not seeking to create issues that would question or reverse the investment. JISCO Alpart is to become an industrial park, and any kind of labour issue that begins to threaten it, can threaten the investment and the development as well, and even more importantly the country's growth target,” he said, explaining the rebuilding of the bauxite/alumina sector is critical to the government's projected growth figures.

Henry admitted that the state of the equipment at the plant, which had been closed down since July 2008 by poor bauxite/alumina prices before being reclaimed by the JISCO sale and reopened in June 2017, is an issue which has to be dealt with as well.

President of the Union of Clerical, Administrative and Supervisory Employees (UCASE), Vincent Morrison, whose union has been seeking to represent the workers since the plant resumed operation, yesterday blamed the Ministry of Labour and Social Security for the industrial relations problems.

Morrison denied that the workers' actions, including a massive workers meeting at the plant in September, were intended to affect production. However, he insisted that the union would continue its efforts to get the ministry to schedule a representational rights' poll, as soon as possible, so that the workers can be represented by the union of their choice.

“A prima facie case was established in August and the workers and UCASE have been awaiting the release of the voters' list by the ministry since then,” he pointed out.

However, Henry said he is not satisfied that the “enviable” level of understanding and cooperation between the unions, which he has asked for, is being kept.

He called for an industrial relations climate that is supportive of the overall stakeholder grouping, “which is not disruptive, but protective of what is right”.


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