JAMAICA’S desire to gain maximum advantage from the sustainable exploitation of its mineral resources remains a critical policy objective of the Government of Jamaica. This commitment has been reiterated on many occasions by Minister of Science, Technology, Energy and Mining Phillip Paulwell, particularly since the recent decision to suspend the red mud beneficiation-based (rare-earth elements) project in Jamaica.

A state-of-the-art pilot plant, totally financed by a US$5-million (approximately $560 million) investment by the Japanese company Nippon Light Metals, was completed last year to explore the profitable extraction of rare-earth minerals from the bauxite waste. Negotiation for commercialisation was also expected to occur at a later date.

However, due to unfavourable market conditions, both parties have agreed to suspend the process. In October 2014, a Termination Agreement was signed by both parties to formally mark the conclusion of the pilot project and facilitate the transfer of the plant’s full ownership to the Jamaica Bauxite Institute (JBI).

When the project was conceived just over a year ago, Jamaica’s estimated 100 million tonnes of red mud residue was envisioned to contain viable levels of several rare-earth elements. Importantly also, the prices of these elements at the time ranged from US$6.50 per kg to US$7,000 per kg, with strong indications that demand and geopolitical factors could push the costs of these strategic minerals even higher.

China, the world’s main supplier of rare-earth elements, significantly reduced its production and export of these minerals. However, in 2013, the World Trade Organization (WTO) found that China’s restrictions breached its rules. This ruling effectively opened up the market and precipitated a dramatic fall in prices.

Despite the vagaries of the rare metals market, this does not mean the death of the Jamaican project. Jamaica now has full ownership of the rare-earth element plant, following a formal handing over of the facility to the JBI by Nippon Light Metal Holding Company Limited in October 2014.

Over the next two years, the JBI will continue to receive technical expertise in bauxite red mud mineral extraction from Nippon Light. A collaboration agreement has also been formalised to accommodate a two-year research and development programme, and a patent application agreement that will protect the JBI’s and Nippon Light’s interests in the project.

JBI, on behalf of the Government will own 50 per cent, while Nippon Light Metals will own the other 50 per cent of patent rights of the new technologies. In addition, the pilot facility can be used to conduct a wide range of related experiments.

It is important to emphasise that the initial investment in the real earth project was at no cost to the Government of Jamaica. Nippon’s handing over of full ownership of the US$5-million pilot plant to the JBI therefore represents a magnanimous gift to the Government and people of Jamaica.

Allan Brooks is a veteran journalist, communications consultant and current communications specialist at the Ministry of Science, Technology, Energy, and Mining. Comments: abrooks@mstem.gov.jm