Noranda resumes bauxite levy payments to Gov't
Bauxite mining in St Ann

MINISTER of Transport and Mining Robert Montague says that the Government has reached an agreement with Concord Resources Holding Limited for the reinstatement of the bauxite production levy on the export of the ore.

Montague, in a statement to the House of Representatives yesterday, said that the reinstatement of the levy is one of several agreements coming out of negotiations which started in August with Concord, its new joint partner in New Day Aluminum (Jamaica) Limited.

Concord Resources Holdings Limited, a former minority shareholder in New Day Aluminum, acquired majority shares in the American company earlier this year, succeeding DADA Holdings Limited as the new overseas partner of the Jamaican Government in Noranda Jamaica Bauxite, which ships the product to New Day Aluminum's processing plant in Gramercy, Louisiana, in the United States.

Concord now owns a 49 per cent share in Noranda Jamaica's mining operations, with the Jamaican Government retaining its position as the majority shareholder with 51 per cent. The new entity is known as Noranda Jamaica Bauxite Partners II and the Government majority share is being managed by Jamaica Bauxite Mining (JBM) Limited.

Montague said that, arising from the first round of negotiations with Concord, which began on August 11, two main points have already been agreed on – the Government will reinstate the bauxite production levy (BPL) and the asset usage fee debt of US$3.4 million, which was owed to JBM, will be paid in full.

According to the minister, it should be noted that both parties are against the continuation of the profit-sharing regime which had replaced the BPL payments. He also confirmed that Concord paid half of the outstanding amount of the asset usage fee debt, and the remaining portion is to be paid by the end of October.

“These funds would have been paid earlier had Hurricane Ida not impacted the company's operations in Louisiana on Sunday, August 29,” Montague informed the House.

“There are various other matters that have been discussed and agreed. However, given the nature of the negotiations, I will refrain from speaking on them,” he told the House.

He said, however, that the negotiations will resume on October 6 to allow for the fashioning of an agreement that effectively treats with Concord's investment in the country's bauxite industry.

He said that he expects that Concord will be a “good investor” in the Jamaican bauxite industry, and that there will be opportunities for further investments in the country, and tangible benefits from the relationship that has been built with Concord.

He promised to maintain open and direct communications with all stakeholders, and that his team will be guided by four core principles: protect the interest of the workers and stakeholders; protect the environment; facilitate increased investment in bauxite and related industries; and, safeguard and increase the country's revenue generated from the use of its mineral wealth.

In July, Minister of Finance and the Public Service Dr Nigel Clarke warned that the Government may have to take legal action to get bauxite/alumina companies to resume paying the bauxite levy, as the COVID-19 crisis subsides.

He said that, over the past 10 years, the country has gone through various periods of serious dislocation, which resulted in long periods of either waivers of the levy or agreements to reduce the levy.

“The minister has been very clear on his position as far as that is concerned and it is a position that I support, and we will be working to make sure that what you have outlined is what is achieved. But it won't be easy, and we may have to resort to legal action, if necessary” Clarke stated.

Montague confirmed during the 2020/21 Sectoral Debate in the House of Representatives that no payments were made to the fund under the Bauxite (Production Levy) Act, for the whole year, into the Capital Development Fund (CDF), which is financed by the 47-year-old bauxite production levy.

MONTAGUE... reinstatementof the levy is one of severalagreements coming out ofnegotiations which started inAugust
BY BALFORD HENRY Senior staff reporter balfordh@jamaicaobserver.com

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