MINISTER of Transport and Mining Audley Shaw confirmed last week that the Government is completing negotiations on a new bauxite production levy regime with local mining companies.
Speaking in the annual Sectoral Debate in the House of Representatives, Shaw said that the process of creating a new levy, which began with Concord Resources’ acquisition of the bauxite/alumina operations of New Day Aluminum LLC in 2021, is being pursued by representatives of his ministry and the Ministry of Finance and the Public Service.
He recalled that in 2021 Concord Resources acquired the bauxite and alumina operations of New Day Aluminum, which operates the Discovery Bay mines, as well as an aluminum refinery at Gramercy in the USA.
“Concord has since rebranded to Atlantic Alumina Company and is now the operating partner of Noranda Jamaica Bauxite Partnership II at Discovery Bay,” the minister noted.
He said that in December 2021 the profit-sharing fiscal regime for that bauxite operation came to an end and, since then, both ministries have been in the process of negotiating with the bauxite and alumina companies for a new levy, based on a fiscal regime with the companies, “and reviewing the model so as to modernise the parameters”.
He recalled that the United Company Rusal (referred to as UC Rusal) began making payments toward a US$35-million levy owed debt for the period Apri 2018 to September 2021 late last year. The Government collected a total of $2 billion from the two companies up to late last year.
“Between November 21 (last year) and March 22, approximately 45 per cent of the outstanding amount was paid into the Capital Development Fund (CDF). In addition, a structured plan for payment of the remaining amount has been developed,” Shaw confirmed.
He also disclosed that the Government is transforming the institutional arrangements for the management of the entire mining sector through the establishment of a geosciences institute “that will lead research and pilot the management and development of the country’s mineral wealth, excluding oil and gas”.
He said that the new institute will subsume the functions of the Jamaica Bauxite Institute (JBI) and the geological survey functions of the Mines and Geology Division (MGD) of the ministry.
“This public body will facilitate the transformation of the sector into a diversified minerals portfolio, with a predominance of value-added commodities. This includes the development of an integrated industrial minerals, metallic minerals, bauxite/alumina and rare earth minerals sector,” he added.
He said too that the ministry has begun preparing a community relations plan in 2021 which includes grievance mechanisms for the entire extractive sector. He said that the plan models international best practices and will afford citizens the benefit of a structural approach to handling matters of conflict arising with mining companies that operate within their communities.
Shaw noted that conservative estimates have placed the remaining lifespan of Jamaica’s bauxite mining operations at 20-30 years and, with this in mind he said, “we have been facilitating the investigation of alternative sources of mineral exploration and maximisation”.
He also praised the significant achievements of the MGD over the last financial year and that it has become the newest partner in the local cannabis industry, after being granted Special (Interim) Authorisation by the Cannabis Licensing Authority (CLA) last October to provide lab-testing services.