How do you mine for bauxite and strike gold?
Jamaica has been standing up well to the ravages of the destructive novel coronavirus pandemic. But just as we thought we would be entering safe harbour by Christmas along comes news of a new variant, bringing predictions of a fourth wave of infections.
Expectations were that the gradual easing of restrictions which we have seen in the third quarter, and which were expanded recently, would boost economic activity and bring us closer to a return to normality next year. But a new wave is not something to wave at and hope it will go away.
We have learnt from experience that it means tighter restrictions, which in turn spells lockdowns for some areas of the economy. This is not just a health crisis; it also generates crises in economic, societal, as well as political well-being. If we have to further heighten those restrictions imposed this year it will not harbour well for the economy, the society, nor the politicians.
The Government must, therefore, tread cautiously as it continues to re-order our lives. COVID-19 mitigation measures have succeeded in reducing infections, but they have also served to restrict consumption and have directly impacted employment, productivity, income, business, manufacturing, and the service industry.
We can expect we will have to live with the health protocols for an extended period of time, but the Government has to ensure that the main planks of our economy, tourism, remittances, bauxite, stay afloat.
Last year a heavy toll was taken on tourism. Tourism and remittances have proven vulnerable to the pandemic. The bauxite and alumina sector, historically a cornerstone of the economy, stayed the course in 2020, until it was shaken by the Jamalco fire in August 2021, which has left a dent in foreign exchange earnings. The plant is not expected to return to production until mid-2022. This long wait will have a very negative impact on the company and the wider economy.
Meanwhile, over in St Elizabeth, and prior to the pandemic years, the closure of the JISCO/Alpart plant in September 2019 saw an immediate 17.6 per cent decline in output from this important sector and has left a gap in foreign exchange earnings. This gap continues to stick out like a sore thumb, as per the Planning Institute of Jamaica (PIOJ) quarterly reports since that loss.
But, in spite of these setbacks, the operating companies Noranda, Windalco Ewarton, continue to be a mainstay of the economy. Noranda Bauxite, the sole bauxite exporter, through wages, taxes, and local purchases, pumps some US$84 million into the economy annually and provides employment for some 1,000 people directly and another 2,000 indirectly.
Noranda has, however, pointed out that the company is now at a pivotal stage of its development, where it needs to extend its mining operations into the new block referred to as Special Mining Lease (SML) 173 in order to avoid closure. Wow, what a pandemic of another nature that would be for Jamaica if a company that has never closed its gates in its 50 years of operation had to shut down for lack of bauxite.
This company, and the industry in general, has been the target of a vigorous and largely misinformed lobbying by various interest groups — most of whom know little about the industry — who have taken to social media, orchestrated events, allegations and strategic campaigning to paint a negative picture of mining designed to scare the living daylights out of communities.
And, as if not satisfied with this approach, the anti-mining cluster came up with a study financed by overseas lobbyist groups and commissioned by the Jamaica Environment Trust (JET) which was published in January under the ingenuous name Red Dirt. It gave failing marks to the Jamaica Bauxite Institute and government agencies for its regulation of the industry before turning its guns on the mining sector claiming that the full costs of bauxite mining in Jamaica far outweighs the benefits.
Red Dirt also gave failing grades to its choice of a name. JET obviously came in late, as historical perspectives of the Jamaica bauxite industry would have pointed them to the name Red Gold, which is how the bauxite soils were re-christened when the discovery of the ore in the late 1940s translated into new wealth, income, and employment for the traditional red dirt areas.
Let’s face it, the value of bauxite to Jamaica is not to be sneezed at. In the 1940s, as we began to take responsibility for our economic management from colonial rule, the discovery of bauxite was welcomed as a substitute for the oil and precious metals which we did not possess.
In my village at the foot of the Mocho Mountains we would tease the boys who came to school with their clothes, shoes, or foot bottom coated with red soil as “Mocho red-dirt boys”. The tables were turned when we heard at a later time that Alcoa was prospecting in the same red dirt area for bauxite. Our head teacher was pleased with this turnaround and would point out in class that, while Trinidad had its oil and Guyana its gold, “Jamaica can now boast that it has bauxite which will be hailed as ‘red gold’.”
By the 1970s Jamaica had emerged as a world leader in the export of the mineral. We saw a decline in our rating following the imposition of the bauxite levy in 1974, but that’s another story.
Those who are wishing for the demise of mining should stop and think. If bauxite and alumina companies were to close down for any reason the exchange rate would come under unbearable pressure and we would all be singing “there is a hole in the budget”. So, as Dr Carlton Davis, the internationally respected former head of the Jamaica Bauxite Institute, once pointed out, “There is no point in creating a resistance to bauxite mining and eventually destroying the industry without examining the long-term consequences.
“It is not enough to just seek to close down the bauxite industry on spurious grounds,” said Dr Davis, “but you have to do some hard thinking as to how these earnings would be replaced.”
There are many examples of the enormous value and contribution of the industry since its startup in 1952 to the economic and social development of Jamaica. These stories need to be told as they have coloured the bauxite industry ‘gold’.
Lance Neita is a writer, historian, public relations veteran, and author of the book In Partnership With Jamaica: The story of Kaiser Aluminum’s 50-year partnership with Jamaica . Send comments to the Jamaica Observer or lanceneita@hotmail.com.