THE Government expects to lose billions of dollars this year due to Clarendon Alumina Production’s (CAP) unstaunched bleeding.

CAP will lose US$91 million ($7.9 billion) for the current financial year, according to spending estimates given by the Finance and Planning Minister Peter Phillips, last week.

The company’s losses will be the result of high debt, totalling US$360 million as at the end of March, and a shortfall in working capital, money available to cover expenses, of US$146 million.

Clarendon Alumina owns a 45 per cent stake in the Jamalco refinery which is majority owned by Alcoa.

Under the agreement between the two owners, CAP is responsible for monthly cash contributions, reflecting that share of ownership.

Alcoa, the largest bauxite miner and alumina refiner, owns the remaining 55 per cent.

The Government has unsuccessfully attempted to rid itself of the unprofitable CAP.

The company is not as close to being divested as it was made to seem by the previous government, said the mining minister, Phillip Paulwell, at the first meeting of the new CAP board in March.

Two companies, including Alcoa, are speaking with the Government about buying Jamalco, Paulwell said then.

The other is Glencore AC, a global integrated producer and marketer with interests in processing, refining, transportation and finance.

The estimates list Glencore as part of the reason for CAP’s losses.It said: “Given inflexibility in prices under the supply (forward sales) contracts with Glencore, the movement in production costs is projected to continue to outpace revenue during the year.”

The Swiss company, through a merger with two other international businesses in 2007, also owns significant stakes in local miners and refineries, Alpart and Windalco.

In a national broadcast last August, the former finance minister, Audley Shaw, said failure to divest shares in CAP contributed to the inability to meet that year’s financial targets under the International Monetary Fund.

At the time, Shaw said CAP’s part-ownership of Jamalco, which saw it lose US$98 million last year, would have been sold by the end of August.

Despite the gloomy projections, Jamalco’s alumina sales are expected to increase by five per cent to US$173 million.