“To
further optimise the Alumina business, Alcoa signed a non-binding letter of
intent to pursue a sale of its ownership stake in Alcoa Minerals of Jamaica
(AMJ), which operates the Jamalco Bauxite Mining and Alumina refining joint
venture. The above actions are consistent with the Company's goal of lowering
its position on the world aluminum production cost curve to the 38th percentile
and the Alumina cost curve to the 21st percentile, by 2016”
Alcoa Announcing plans
in its June financials released to shareholders in the week of Sunday July 6th
2014 to sell JAMALCO
So
it is done, folks!
A
lot of JAMALCO and Alumina workers read my blog apparently, as I get a huge
number of hits coming from Computer Servers located in Domains labled “Alcoa.com”,
both from Jamaica and the US of A. This as I’d worked at JAMALCO in the Summer
of 2013 as is plainly laid out in my Engineering
Resume and Diploma and Degree
qualifications for anyone to see!
So
here’s the news then! Yes, you read that title right!
ALCOA
(Alumina Company of America) has finally decided to follow through on its decision
back in June 2014 to Noble Resources UK to sell its stake in JAMALCO (Jamaica Alumina
Company) as stated in the article “Sale
of Jamalco part of global cuts being made by Alcoa”, published Friday, July
11, 2014, The Jamaica Observer.
ALCOA
will retain a minority interest in the operations of the company as a Managing
Operator for the next two (2) years. After that, Noble Resources UK may begin
the Process of implementing a plan to use Coal in the Refinery Process, being
as they also mine Coal that can be used to reduce the high Energy costs
associated with using Bunker C Oil as Fuel.
Effectively
Noble Resources Limited, the local representative of Noble Resources UK, has
acquired ALCOA’s stake in JAMALCO as stated in “Gov't
gives six-month notice to UC Rusal to resume Mining”, published Friday,
July 11, 2014, The Jamaica Observer.
This
news comes even as Minister of Science, Technology, Energy and Mining Phillip
Paulwell issued a six (6) month ultimatum to UC Rusal to revoke their Mining
License in the ALPART and Kirkvine refineries if Alumina production doesn't
resume in six (6) months time.
The
ownership of AMJ (ALCOA Mineral of Jamaica), the local holding company representing
ALCOA within the JAMALCO partnership breaks down as follows:
1. 55%
AMJ
2. 45%
Government of Jamaica
Curiously
enough, AMJ isn't a solo operation by ALCOA:
1. 60%
owned by ALCOA
2. 40%
by Alumina Ltd
After
some fifty (50) years in Jamaica, ALCOA has very little to show for it. Having
built the Alumina Refinery at Halse Hall, Clarendon back in 1973 after Reynolds
and Alcan in 1952, Kaiser in 1953 and Revere in 1971, we've now entered a
period where they're competing with cheaper Alumina from Chinese.
AML now in Noble
Resources Limited – UC Rusal stalling as Xinfa Group Company sale Pending
He
made this disclosure with regards to UC Rusal and the drama playing out with
the ALPART and Kirkvine refineries during the 2014/15 Sectoral debate in the
House of Representatives on Tuesday July 8th 2014, quote: “The Bauxite
reserves associated with both plants represent over 200 million tonnes of ore
idling in the ground while the plants flounder in uncertainty, and the
livelihood of thousands continue to be in peril. This situation cannot be
allowed to continue indefinitely”.
It
makes sense he be concerned. Aside from people being unemployed, Alumina Mining
still contributes millions to
Jamaica's Foreign Exchange Earnings since JAMALCO started operations in
Jamaica, counting from 1974 to 2013:
1. 400
million tonnes of Bauxite Mined
2. US$3.72
billion in levy and taxes
3. US$222
million in Mining Royalties
4. US$7.6
billion FDI (Foreign Direct Investment) by the Alumina Companies in
Infrastructure
They
had cheaper Energy.
So
as recently as 2013, it seemed that JAMALCO would go the LNG (Liquid Natural
Gas Route) as I’d predicted while I was working there as can be seen from my blog article entitled
“PM
Portia Simpson Miller ALCOA Talks hint at LNG - Lady Gaga's Paparazzi in Jamaica’s
Bauxite Sector”.
But
with a profit of US$129 million in Second Quarter of 2014 Quarter compared to a
US$148 million loss in 2013, it was becoming clear that this wasn't
sustainable. Thus, not only are they cutting JAMALCO loose, but they're also
scaling back on production in Brazil by 149,000 tonnes of smelting. By the time
August 2014 rolls around they'll also close Port Henry in Australia and reduce
production there by some 190,000 tonnes of aluminium.
Thanks
to the fact that Saudi Arabia operations are more efficient due to the Alumina
being mostly located in the Sand, they've continued to expand on operations in
that area. Sad to see them go though!
Apparently
LNG or any other form of Alternative Energy such as Coal cannot save their
operations as is the plan of Chinese-owned Xinfa Group Company, who have plans
to acquire the Reynolds Mine in Lydford, St Ann as detailed in my blog article entitled
“Xinfa
Group Company to invest US$3 billion in Reynolds Bauxite Mines in Lydford, St
Ann - Sapphire Production a better bet as the World’s flooded with Aluminium”,
may not make Bauxite Mining in Jamaica profitable.
How
will this all play out? Will UC Rusal get their act together and make good on
their 2012 deal to start Mining operations? Or will Xinfa Group Company acquire
their stake in Bauxite Mining and Alumina Production as well? Will we see the
production of Sapphire in Jamaica as VAP (Value Added Product) along with the
mining of Bauxite and its refining into Alumina?
And
what if any News of the push to extract Rare Earth Metals from RDA (Residue
Disposal Area) Red Mud as explained in my blog article entitled
“No
news on progress of the Rare Earth Pilot Plant at JBI - Cuba-Jamaica CFL
Project Heralds manufacturing of LED's, Li-Ion Batteries and Sapphire Screens
in Jamaica”.
Follow
my blog and I’ll give you details later as they become available.
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