Cloud over JISCO Alpart operations

Cloud over JISCO Alpart operations

Editor at Large
South Central Bureau

Sunday, August 11, 2019

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NAIN, St Elizabeth There is growing concern about the immediate future of the JISCO Alpart alumina plant because of a rapid decline in global alumina prices, heavy losses and the urgent need for retooling.

Reliable sources say that in the wake of recent production cutbacks and the layoff of 250 temporary workers, there could be more bad news ahead, including closure for “up to more than a year” to facilitate “modernisation” of the more than 50-year-old plant.

Asked yesterday whether or not a shutdown of production at JISCO Alpart was a possibility, an impeccable source said: “We can't take that off the cards.”

Sources seem to agree that the one “positive” is that JISCO appears committed to staying the course and upgrading the plant.

JISCO Alpart currently employs in excess of 1,000 workers. The refinery, which dates back to 1968, was mothballed in 2009 as a consequence of the global financial meltdown of that time. The plant resumed production and export of alumina in 2017, following its acquisition from Russian conglomerate UC Rusal by the Chinese metals giant Jiquan Iron and Steel (JISCO).

“They (JISCO) say they will be here to stay but can't continue the way they are...,” one source told the Jamaica Observer yesterday. “They say they losing money,” he said.

Low productivity levels among wokers is also said to be a concern for the JISCO management.

The source said, previous plans for a multi-billion US dollar expansion project, including a second alumina plant and a value-added light manufacturing project are apparently on hold.

“They say they can't talk about that (expansion) now, they talking about renovation and modernisation,” the source said.

Word yesterday was that a high-powered team from JISCO group headquarters in China, led by the chairman, was due to meet today with company executives and local political representatives to outline the situation.

At a back-to-school function at the Alpart Sports Club on Friday, JISCO Alpart's Managing Director, Zhang Jun, who had only just returned from a trip to China confirmed his company's continued commitment to Jamaica but said little else.

In congratulating Jamaica on its recent 57th anniversary of political Independence, Zhang said: “It is a time for Jamaica to reflect on its achievements and plot a path forward for continued economic and social development. JISCO Alpart sees itself playing a pivotal role in realising these goals and as such our continued commitment to Jamaica's growth and development.”

Following the function, JISCO Alpart's Public Relations Manager Julian Keane said 50 of the 250 contract workers (mostly labourers and construction workers), who were recently laid off, had actually been recalled to work.

He appeared to suggest that others could also return to work in coming months. He emphasised that no permanent employees were cut.

Keane said the need to upgrade outdated equipment and systems and falling alumina prices had necessitated production cutbacks to 2,200 tonnes per day currently, from 3,600 tonnes per day previously.

Old, creaking equipment and systems are said to be resulting in significant production waste at Alpart.

Keane said the “price (of alumina) is coming down from a high of US$500-odd per tonne down to between US$280 and 290 now”.

Industry checks by the Sunday Observer show global alumina prices have fallen from in excess of US$450 per tonne a year ago.

Alumina, which is processed from bauxite ore, is the base material for the light metal aluminium used in a range of industries, including motor vehicle manufacturing.

Reports say alumina, its by-product aluminium, as well as the wider metals and commodities market, have been showing price and supply instability partly because of current trade disputes between global powerhouses United States and China.

The untidy situation surrounding Britain's attempts to exit the European Union, as well as the return to full production of the world's largest alumina refinery Norsk Hydro Alunorte are also said to be factors. The Norwegian-owned Alunorte, located in Brazil, was forced to cut production in half last year because of environmental concerns.

Pressed by journalists on the possible long-term implications of falling prices for JISCO Alpart, which is the largest alumina refinery in Jamaica, Keane said: “I can't speak to the implications for Alpart. What we can say though, is that our commitment is to stay and to have the plant up and running as long as possible...”

Pressed further, Keane said the company was committed “to have the plant running as long as possible, as conditions prevail...”

It's expected that retooling and refurbishing of the aging Alpart plant will significantly reduce air and dust pollution which have been major concerns for local people since the plant's reopening two years ago.

Closure of Alpart and the wider bauxite/alumina industry in 2009 hit the Jamaican economy hard. It was said to be a major factor in the decision of the Bruce Golding-led Jamaica Labour Party (JLP) Government of the day to return to a borrowing relationship with the International Monetary Fund.

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