THE Government is looking to divest its 45 per cent stake in Jamalco, the bauxite mining and alumina operation it owns jointly with Century Alumina Company, which has a controlling 55 per cent stake.

The Government’s position was made clear in a news release issued Monday by the Office of the Prime Minister (OPM). It speaks to the creation of a new Ministry of Mining and Geology, headed by Floyd Green and having its own permanent secretary. The creation of the new ministry is intended to give “sustained attention to two important national responsibilities”. The first is to secure greater value for Jamaicans from the minerals owned by Jamaica, and the second is to ensure that reliable geological information informs public decisions about land use, infrastructure, and community safety.

Green will continue to have policy oversight of the Ministry of Agriculture and Fisheries at the now former Ministry of Agriculture, Fisheries and Mining. The two ministries will operate out of the same Hope Gardens facilities of the previous ministry.

According to the OPM release, Prime Minister Dr Andrew Holness has tasked Green with fast-tracking the divestment of GOJ’s interest in Jamalco whose mining operations are based in Halse Hall, Clarendon. Those interests are managed by Clarendon Alumina Production Limited.

“The objective is to end or materially reduce taxpayers’ exposure to operating losses, capital calls, and contingent liabilities,” said OPM. It said that in collaboration with the Ministry of Finance and the Public Service and the Attorney General’s Chambers, Green has been mandated to bring to Cabinet a transaction strategy grounded in independent valuation and legal due diligence.

“A sale to an existing partner should be compared with a competitive sale, and consideration should be given to whether incorporating or restructuring the joint venture would improve the outcome,” the release stated.

In his missive to Green the prime minister noted that bauxite and alumina have served Jamaica for generations and remain important. But, he also told Green that declining grades in accessible reserves, energy costs, and ageing infrastructure now weigh on the industry. He said the Government must address those constraints, examine the return Jamaica receives, and develop opportunities in limestone, aggregates, and other minerals.

To this end, Holness assigned Green four priority tasks, including the Jamalco divestment, and commented that together they will determine how Jamaica manages its mineral wealth, how it uses geological knowledge in the public interest, and how it protects taxpayers from continuing commercial losses.

The other three priorities relate to minerals and fiscal reform; the establishment of the Jamaica Minerals Institute and stronger geological survey to replace the Jamaica Bauxite Institute (JBI); and environmental protection and community safety.

Regarding minerals and fiscal reform, the new ministry will accelerate implementation of the National Minerals Policy 2017–2030 and bring to Cabinet “any changes needed to help Jamaica earn more from what we mine and quarry”. Through a limestone value-addition programme, Green will identify deposits suitable for higher-value products such as food-grade calcium carbonate, and work with investors to develop those opportunities in Jamaica. “As we rebuild after Hurricane Melissa, the most immediate need is to ensure that affected communities have a reliable supply of quality aggregates at affordable prices. Meeting that need must go hand in hand with protecting our rivers, watersheds, and the communities that live alongside our quarries,” said the OPM.

The new ministry will also work with operators to address energy costs; protect viable reserves and improve residue management; be clear about the evidence for each opportunity and the further work needed before investment is justified; and propose a royalty and tax regime and an incentive regime (where applicable) suited to the economics of each mineral.

“It should reward exploration and investment, allow Jamaica to share fairly in higher profits, and give the State the means to verify production, prices, and payments.”

Green must bring to Cabinet a plan to transform the JBI into the Jamaica Minerals Institute. The plan should set out how the new institute and the Mines and Geology Division will use their staff, laboratories, and data to serve the wider minerals sector.

“Regulatory oversight must continue throughout the transition, and enforcement decisions must remain independent of investment promotion. A national mineral resource assessment should give Jamaica a clearer picture of what we have and where further exploration is justified. This should begin with limestone and aggregates, and pursue prospects for gold, copper, rare earth elements, and other minerals where the evidence warrants it,” OPM outlined.

The office said that drawing on existing records, modern mapping, geochemical and geophysical surveys, laboratory testing and targeted exploration, the assessment should distinguish promising occurrences from deposits that can be mined economically.

“For each priority prospect, investors should be able to see how reliable the evidence is and what further work an investment decision requires.

“A publicly accessible national repository should bring geological maps, exploration results, and mineral occurrences together with licence information and environmental constraints under clear rules for submitting, protecting and releasing exploration data,” OPM stated.

“It is also expected that the national geological survey will have the people, equipment, and funding to advise public authorities while they can still choose a safer site, change a road alignment or revise a design,” OPM added.

The new ministry will also work alongside the National Reconstruction and Resilience Authority and the relevant public bodies to identify proposed housing sites, critical facilities, and road corridors where unstable slopes or the risk of ground collapse in limestone terrain warrant investigation.

Importantly, “Before a site or route is settled, the responsible agency should have a map or written assessment that explains the known hazards, where uncertainty remains, and what ground investigations are needed”.

Regarding environmental protection and community safety, Green must ensure that people living and working near mines, quarries, rivers and watersheds are safeguarded. He must also ensure that mined-out land is restored to safe, productive use.

Acting on the recommendation of the auditor general, the new ministry will establish a public digital licensing system linked to the mineral cadastre that shows how applications are decided, who holds each licence, and what environmental and safety conditions apply.

On the matter of rare earth minerals, Green was told to, “bring to Cabinet a critical minerals strategy that examines, among other prospects, whether valuable minerals can be recovered commercially from bauxite and its residues.”

Opposition spokesman on energy Phillip Paulwell, who has long campaigned for Jamaica to commercialise its rare earth deposits, welcomed the development.

“Jamaica, since 2013, has been exploring the opportunity for extracting from the bauxite residue, rare earth elements. We have proven that there is viability in extracting rare earth elements,” Paulwell told Jamaica Observer on Monday.

He reminded that the then People’s National Party Government had set up a rare earth facility at the JBI in 2013 where the experiment was done. “We did that in collaboration with a Japanese company, Nippon Light Metal, but we were unable to proceed at the time because the world market for rare earth changed with China dumping a lot of the rare earth on the market, so the price was depressed,” Paulwell explained.

“It is just a matter of time, as we’re seeing now, for that opportunity to emerge,” Paulwell added.

He also noted that it has been determined that all the bauxite shipped out of Jamaica retain in them a financial interest for the Government and people of Jamaica.

“Even those that we would have exported to Louisiana [in the United States], we still maintain a financial interest in them — that’s been the legal opinion and it’s really a tremendous opportunity for Jamaica,” added Paulwell.

“It has been delayed by about 10 years and I think now is the time to pursue it,” he said.

Meanwhile, Minister Green is to report to the prime minister in 90 days, and quarterly thereafter. He is also required to provide an annual sector performance and investment report. Also, Holness said he expects evidence of investment secured, land restored, fiscal exposure reduced, and public decisions improved by geological advice.