Alpart tunes up
SANTA CRUZ, St Elizabeth – Since taking over as managing director in 2009, Timothy O’Driscoll has consistently told everyone who would listen that the mothballed Alpart alumina refinery in Nain, South East St Elizabeth, “will reopen”.
Under the agreed timelines, O’Driscoll still has another 18-19 months to wait before fulfilment of his longstanding pledge.
But last Thursday, his was an expression of quiet satisfaction as he led mining minister Phillip Paulwell and other influential figures on a rare walk-through of Alpart, a tour of mining operations, as well as Port Kaiser which is being readied for the shipment of bauxite in July.
“There is no turning back,” O’Driscoll told visitors in a pre-tour get-together in the Alpart conference room. “We are up and we are going and there is no turning back,” he added in response to questions from journalists at the tour’s end.
Visitors saw for themselves as heavy mining equipment excavated ore in the Bueno Vista area of Myersville close to the Alpart plant. They witnessed huge mounds of the ore being stockpiled; and travelled the trucking route to the port close to Alligator Pond where facilities are being rejigged for the short-term project of exporting bauxite.
Alpart, set up as an alumina plant in 1969, has never exported raw bauxite, Alpart officials have said. But under the agreement between the Government and Alpart’s Russia-based parent company, aluminium giant UC Rusal, two million tonnes of raw bauxite projected to earn US$60 million will go to Russia, prior to the reopening of the refinery in December 2016.
Alpart officials said mining and stockpiling of fresh bauxite started in March; while haulage of ore to the port begun “slowly” last month in preparation for bauxite exports in July.
Igor Dorofeev, country manager for UC Rusal in Jamaica, assured Paulwell and everyone else that once alumina is “ready” there will be no more export of bauxite; and that the reconfiguring of port facilities to accommodate the export of alumina will be “very simple”.
Paulwell has repeatedly said that the re-opening of the alumina refinery which will provide “genuine value added” and substantial employment, is the Government’s “real interest”. He reiterated that position on Thursday.
Alpart, among the world’s least energy-efficient alumina refineries, shut down mining and refining operations in 2009 in the immediate aftermath of the global economic meltdown of 2008. Operations became uncompetitive as metal prices plummeted even as oil prices soared. Alpart — originally opened when energy cost was a minor consideration with oil being sold at US$2 per barrell — was hit hard.
At the time of its closure in May 2009, more than 900 people lost their jobs. Hundreds more had been shed in the months leading up to final closure.
O’Driscoll’s predecessor, Alberto Fabrini, claimed in 2008 that Alpart’s operations at the time pumped more than US$600 million into the Jamaican economy annually, with net local earnings of US$167 million “through taxes, levies, payroll, diesel oil (bought from the state-run producer Petrojam) and local manufacturing”.
The closure of Alpart, then the biggest alumina operation in Jamaica, led to massive unemployment and depression for the economies of St Elizabeth and Manchester. On a national scale, the collapse of the bauxite/alumina sector proved pivotal to the then government’s return to the multilateral International Monetary Fund (IMF) for economic support.
Alpart aside, other UC Rusal-owned plants in Ewarton, St Catherine and Kirkvine in Manchester were also closed in the economic fall-out of six years ago. The Ewarton Windalco plant has since reopened but expectations are that Kirkvine is finished as a bauxite/alumina processing entity.
Over the last six years of closure, just over 500, mostly low-skilled workers, have been rotated at Alpart through the community council to carry out routine upkeep of the plant in “readiness” for reopening.
Patrick James of Alpart’s Technical and Operations department said on Thursday that since the start-up of pre-mining exercises earlier this year which included land surveys and reopening of access roads as well as mining operations last month, another 124 people had been employed. He estimated that “over the period” 250 people would be employed, “some on a rotated basis”.
Government projections at the start of the year were that in the period leading up to alumina refining in late 2016, in excess of 1,200 jobs will be generated.
Last Thursday, Paulwell emphasised the importance of “jobs” and economic growth as motivation for the Government’s push to resuscitate the bauxite and alumina sector.
“I am very happy about the jobs,” Paulwell told journalists. “This is what this is all about, we have to get our people back to work, we have to get the economy going. This mining sector that has over many years added significantly to the growth of Jamaica will resume very shortly and we anticipate similar growth for a number of years to come,” he said.
Paulwell was confident that UC Rusal will fulfil its part of the bargain for the eventual resumption of alumina refining.
“This agreement is really cast in stone between the company and ourselves. We have had some issues but I believe there is tremendous earnestness and a desire to ensure that we comply with the terms of the agreement,” Paulwell said.
Under the terms, on reopening of the refinery in late 2016, Alpart will provide 1.65 million tonnes of smelter grade alumina worth US$500 million annually for delivery to dedicated aluminium facilities in Russia.
Paulwell said that the agreement entails the payment of “full” bauxite levies to the Government. When the bottom fell out of the sector six years ago, the relaxation of levies was one incentive used by the Government to keep some mining operations going.
Earlier this year, the Government had also pledged that Alpart will be committed to upholding environmental and land protection rules.
The plant is to be modernised, embracing the development of independent energy generation. Excess from relatively cheap energy generated at the alumina refinery will be sold to the national electricity grid.
Dorofeev told the Sunday Observer that “a new energy solution will be in place by end of 2017”.
Paulwell, who in addition to mining also has ministerial responsibility for energy, science and technology, hailed the Government’s chief negotiator, Dr Vincent Lawrence who was on the tour, for his role in brokering an agreement with UC Rusal.
“This is a win, win for all of us,” said Paulwell.
