Monday, August 22, 2022 marked the first anniversary of the fire at the alumina processing plant Jamalco, an event described as one of the worst disasters in the company’s 63-year history.

Jamalco mines bauxite and refines it into alumina which is exported from its Rocky Point port in Clarendon. It is a joint venture between General Alumina Jamaica Limited (a member of the Noble Group) and Clarendon Alumina Production Limited, a Jamaican Government-owned company.

A major fire which broke out at the company’s powerhouse on Sunday, August 22, 2021, extensively damaged it, dislocating the company’s source of power, compressed air and steam which were used for the refining operation.

The event halted production for over 10 months. One year later, phase one of the recovery process has been completed and new plans are afoot to increase the fire safety resources, the company indicates.

In addition to converting boilers four and five to dual fuel, the company will be replacing turbine generators numbers one and two with new, “modern and more efficient turbines” as disclosed to the Jamaica Observer on September 1.

By the end of September 2023, Jamalco expects to be back at 100 per cent production, “barring any unforeseen circumstances”. Reconstruction will be completed by 2024.

Meanwhile, Austin Mooney, managing director of Jamalco, told the Business Observer that energy prices are negatively impacting the company’s operations.

Energy crisis

Mooney outlined, “Russian energy giant Gazprom has drastically cut natural gas deliveries to Europe via the Nord Stream pipeline to about 20 per cent of its capacity. The EU states have since accused Russia of squeezing supplies in retaliation for Western sanctions over Moscow’s war in Ukraine.”

“The reduction in supplies has pushed natural gas prices in Europe to unprecedented levels and has forced Europe to tap into alternative supplies, especially liquefied natural gas [LNG] from global markets. This has reduced the supply to other markets causing LNG prices to skyrocket globally.”

Accordingly, Jamalco is set to implement cost reduction initiatives to combat energy prices in Europe and globally which continue to fluctuate, putting pressure on alumina refineries around the world.

Mooney explained that the price that the company is now paying for LNG is 10 times higher than it was a year ago. “Although we do not buy LNG from Europe, most of the United States’ LNG is being exported to Europe resulting in a global shortage.”

“There are reports of significant cutbacks in production at refineries all over the world so this energy crisis has really reinforced Jamalco’s strategic advantage of being dual fuelled on the boilers and the reason boilers four and five will be converted to use both gas and heavy fuel oil [HFO],” Mooney said.

The situation, he noted, is driving the company to explore every opportunity to reduce cost.

In a company newsletter, Mooney commented, “It is for this reason that it is imperative to expedite the restoration of HFO to boilers four, five, six and six B. “We are hoping that the transition will be completed by the end of the year. Until that time, the organisation will be under pressure to meet its cost obligations.”

One digester

One year after the fire, the refinery is back in operation with one digester, and it is ready to export its main product, alumina again. Mooney says the organisation is in a position to embark on 100 per cent production “but the global economic impact on the price of gas is forcing us to remain a one-digester operation. Our goal for the remainder of the year will be to operate as efficiently as possible on one unit while we wait for the global economy to recover.”

Mooney indicates that the company decided to keep the original powerhouse design. “We are going to retain the powerhouse because it has served us well and Jamalco needs to maintain the flexibility of being dual fuel with both heavy fuel oil [HFO] and gas. If the refinery was fuelled only by HFO, we would still be shut down but the fact that we have the alternative gas system, we have been able to restart production.”

The managing director notes how Jamalco retained all its team members despite the disaster. He describes this as a strategic decision stating, “We never underestimated the task of getting the plant restarted and so the idea that we could do it with fewer people was not entertained.”

Information provided by the company’s communication division said the recovery process was one fraught with many challenges.

It was noted, “The mettle of the Jamalco team was tested but their relentless optimism in the face of adversity is phenomenal. Director of operations Richard Russell and the operations team toiled to develop a workable rebuilding solution. Once the plan was ready, the team swung into action and worked assiduously to rebuild the plant. There were a few modifications along the way, but the team members have been following the plan and have executed it well.”