The concern expressed by Opposition Senator Kavan Gayle over the imbroligio between the Government and Noranda Jamaica Bauxite Limited should not be dismissed lightly.

For at the heart of Senator Gayle’s apprehension are the possible social and economic effects that this dispute can have on the country.

For those who haven’t been keeping abreast of the developments, Noranda — in which the Jamaican Government has a majority stake — has told its stakeholders that, in order to match its mining activities with seasonal bauxite demand, it has temporarily suspended bauxite mining operations in St Ann until January 4.

The company has also told its workers’ unions — the Bustamante Industrial Trade Union, the University and Allied Workers Union, and the Union of Technical, Administrative and Supervisory Personnel — that it would continue its drying and shipping operations from its bauxite plant in Discovery Bay.

According to the company, the overall impact on its operations would result in a lay-off of more than 100 workers.

That development will no doubt be affected by the decision of an arbitration panel in England that the company’s argument in favour of a reduction in the bauxite levy cannot fly.

An early indication of that was given by Mr John Parker, Noranda Aluminum Holding Corporation’s vice-president of communication and investor relations, who said that the specifics of the tribunal’s decision are still being evaluated to determine its impact on the company’s bauxite mining operations.

Noranda Jamaica General Manager Antoine Liddell has also been reported as saying: “Preserving jobs, particularly at this time of the year, is of concern to us. But the current and critical situation poses difficult decisions that have to be made, with possible further adjustments to consider, depending on the ongoing state of the industry.”

Add to that Noranda’s indication that the price of alumina on the London Metal Exchange has continued to decline from over US$1 per lb to approximately US$0.65 per pound in 2012; the company reporting that one of its customers, Sherwin Aluminum, has already reduced bauxite orders by 1.15 million tons in 2016; the increase in the bauxite levy from US$2.50 to US$5 per ton and, according to Noranda, the uncertainty of the levy to be paid after the arbitration settlement in 2016, and what you are seeing here is a company facing major challenges.

The Government, most naturally, is happy with the bauxite levy decision. Mining and Energy Minister Phillip Paulwell is reported as saying that while the Administration does not want to pressure the company, there is a need for a realisation that “the Jamaican people need something more”.

Senator Gayle, however, believes that the Government is being “penny wise and pound foolish”.

He has suggested that, instead of pushing for Noranda to pay the full levy starting this year, which may amount to a few million US dollars, the Government should consider the long-term effects of losing access to other revenues, including income and company tax, as well as the effect on the lives of the more than 600 workers employed to the company, their families and communities, if Noranda is forced to close. It is akin to the transfer pricing law which is trying to scrape new taxes out of the already overburned system at the expense of pushing out badly needed investments.

The points raised by Senator Gayle are indeed worthy of urgent discussion. We hope the Administration shares our view.