SANTA CRUZ, St Elizabeth — Negotiations are ongoing for purchase of the mothballed Alpart alumina plant at Nain, St Elizabeth by leading Chinese metals company, Jiuquan Iron and Steel (Group) Company (JISCO) from Russian owners UC Rusal, reliable sources have said.

The price of the ageing Alpart plant, established in 1969 is said to be the point of disagreement between JISCO and UC Rusal.

Listed on the Internet as the biggest carbon and stainless steel producer in North West China, JISCO, which boasts of making products which “clang” is said to be among the top 100 companies in China — a country of 1.35 billion people and consistently described as the world’s fastest-growing economy.

Negotiations for sale of Alpart have taken place at the highest level, sources said. JISCO is placing on the table a “massive development plan” that would involve not just reopening and expansion of the alumina plant, but eventual development over a five-year period of an aluminium smelter, powered by an independent energy plant, sources say.

Alumina is refined from raw bauxite (mineral) while the metal aluminium — used in a wide range of manufactured metal products — is smelted from alumina.

Sources say that the JISCO plan proposes an industrial complex at Nain which would allow for the manufacturing of inputs. The plan would entail widespread mining of bauxite reserves in the Santa Cruz Mountains extending to Malvern and beyond and also of the Manchester Plateau.

Jamaica Observer sources say that, under the Chinese plan, alumina capacity at Alpart would be rapidly doubled to in excess of 3,000 (metric) tonnes.

When quizzed on Friday, Minister of Science, Technology, Energy and Mining Phillip Paulwell, who was on a whirlwind tour of St Elizabeth and Manchester, responded cautiously to questions, even while confirming that “negotiations” are taking place.

“I am… aware that there have been some visits, but for the time being there is nothing official as yet,” Paulwell said.

Pressed further, the minister said: “I know that they are in negotiations…”

Reports reaching the Sunday Observer are that high level negotiating

and technical teams from China have visited Alpart in recent months, meeting representatives of Rusal, government officials, local political representatives, and community leaders. A technical team left last week and another visit is expected before year-end.

Paulwell emphasised that whatever happens in the ongoing negotiations, the Government will be standing firm by Rusal’s commitment to reopen the alumina refinery by December next year.

“The terms remain the same, those terms are sacrosanct,” said Paulwell. “The terms will remain the same in terms of the date for reopening, that’s sacrosanct,” he added.

Paulwell stressed that, in line with its commitment, UC Rusal has been taking steps towards reopening of the alumina refinery. These include the hiring of staff.

“I know that recruitment has started. They have a new managing director (at Alpart), now and they are replacing staff who have left, and are looking globally to find Jamaicans who have left after the closure (in 2009) to come back,” Paulwell said. The minister noted that bauxite mining has restarted and shipments of raw bauxite are taking place. Bauxite shipments will end with the reopening of the alumina plant.

The new managing director of Alpart, Sergey Kotswyuk, is scheduled to officially take up duties tomorrow, a source told the Sunday Observer. He replaces Australian Timothy O’Driscoll who left earlier this year.

Alpart, Jamaica’s largest alumina refinery, at Nain in South East St Elizabeth close to the border with Southern Manchester, was shut

down in May 2009 at the height of a global economic crisis which caused metal prices to plummet even as oil prices soared.

More than 900 people lost their jobs, while hundreds more had been shed in the months leading up to the closure. At the national level, the closure of Alpart and a near-collapse of the total bauxite-alumina sector triggered massive economic dislocation. It was a significant contributor to the then Jamaica Labour Party (JLP) Government’s decision to return to multilateral lender International Monetary Fund (IMF) for support.

In January, Alpart resumed bauxite mining operations in areas relatively close to the plant. And in September the plant began exporting bauxite as part of the build-up to next year’s reopening. A third shipment is scheduled for this week.

Jamaica Government as well as Alpart officials have repeatedly said the export of raw bauxite will be replaced by alumina when the plant resumes alumina refining.

Alpart says that since the resumption of mining more than 300 people have been employed.

Since the refinery’s closure in 2009, local crews have been employed for basic maintenance.

Established as an alumina refinery 46 years ago when energy costs was a minor consideration at US$2 per barrel, Alpart’s need for radical retooling is said to be a major consideration ahead of scheduled reopening next year. Sources say it is also a sticking point in current negotiations between RUSAL and JISCO.

One anecdote told to the Sunday Observer is that during a recent visit, one Chinese official laughingly likened the ageing plant to a “96-year-old woman trying to climb Mount Everest”.

When asked about the need to modernise the plant, Paulwell accepted that the process would be costly, but insisted that it would not prevent reopening of the plant as planned.

“It’s going to be significant investment because the plant has been shut for so long, but we are confident that it is going to happen and the commitment is there for it to happen,” Paulwell said.

Word of the plans by the Chinese for major expansion has inevitably triggered environmental concerns.

Paulwell has consistently insisted that reopening of the bauxite/alumina sector will be carried out with due regard for protection of the environment and the interests of connected and neighbouring communities. He renewed that commitment when the Sunday Observer spoke to him last Friday.

Efforts to get a comment on the latest developments from Rusal failed yesterday. When contacted, Julian Keane, public relations officer of RUSAL Alpart Jamaica declined to comment.