“The
new deal represents an expression of the Government’s commitment to ensure that
the full potential of the bauxite/Alumina industry is realised in the shortest
possible time”
Minister of Science,
Technology Energy and Mining Phillip Paulwell on Monday December 22nd
2014 announcing UC Rusal re-opening the Bauxite and Alumina Plant in Nain, St
Elizabeth by January 2015
Great
News for the people of St. Elizabeth in 2015, especially those who used to work
with ALPART (Alumina Partners of Jamaica)!
Russian
owned UC Rusal is planning to reopen the Bausite and Alumina Plant in Nain, St Elizabeth
by January 2015 with the Refinery being re-opened by December 2016 as stated in
the article “Mining
to resume at Alpart in January Paulwell”, published
Monday, December 22, 2014 3:41 PM, The Jamaica Observer.
Minister
of Science, Technology Energy and Mining Phillip Paulwell made the announcement
on Monday December 22nd 2014 at a Press Conference held at the
Office of the Prime Minister. The deal that he hammered out with the Russian Mining
company will see some US$400 million being spent on upgrading the following:
1.
Development of port facilities
2.
Ethane cogeneration facility
3.
Plant modernization
4.
Storage and transport infrastructure works
Of
that amount, US$100 million will be spent as follows:
1.
Development of port facilities
2.
Storage and transport infrastructure works
The
deal to be executed over a period of two (2) years will see the following:
§ 1,200
job created
§ 1.65 million tonnes of Alumina
Produced
§ 2
million Tons of Crude, wet, raw Bauxite to be mined
§ A
new Ethane cogeneration Power Plant being built
The
total earnings from this investment is expected to be some US$55 million
to US$60 million for that 2 million Tons of Crude, wet, raw Bauxite. The Ethane cogeneration
Power Plant is US Rusal’s contribution to the 381 MW Project led by Dr. Vincent
Lawrence led six-member ESET (Electricity Sector Enterprise Team) as explained
in my blog article entitled
“Dr.
Vincent Lawrence ESET sets 2017 for 381 MW Project - Why JPS Co says LNG even
though Ethane and Propane cheaper as Hydrogen Economy possible”.
So
why is US Rusal all of a sudden deciding to get back in Bauxite Mining after it
was deemed unprofitable as far back as 2010 due to the influx of cheap Chinese mined
Bauxite and Alumina due to the lack of a cheaper fuel such as LNG (Liquid
Natural Gas) as argued in my blog article entitled
“PM
Portia Simpson Miller ALCOA Talks hint at LNG - Lady Gaga's Paparazzi in Jamaica’s
Bauxite Sector”?
The
answer: Competition with the Chinese Military, Trade and Space Exploitation
Ambitions.
UC Rusal to reopen
ALPART mines - UC Rusal breaks promise, shutters Nain and Ewarton
This
is welcome news indeed. UC Rusal had gained ownership over ALPART (Alumina
Partners) and their associated Kirkvine Alumina works in Ewarton, St. Catherine
and Nain Alumina Works in St Elizabeth back in 2010.
But
instead of restarting production, they had shuttered both of these Alumina Plants,
scaling back production at the Kirkvine Alumina works in Ewarton, St.
Catherine.
They
had promised to restart full production at Kirkvine Alumina works in Ewarton,
St. Catherine and Nain Alumina Works in St Elizabeth in 2012 as stated in “Bauxite
industry deal struck”, published Wednesday, October 03, 2012 BY SHAMILLE
SCOTT Business reporter, The Jamaica
Observer but that promise was not kept.
Eventually
Minister of Science, Technology Energy and Mining Phillip Paulwell and UC Rusal
got to talking about them getting a two (2) year concession on paying the Bauxite
Levy in exchange for them building a Coal-Fired Refinery to refine Bauxite into
Alumina as stated in “Gov’t
and UC Rusal to Conclude Discussions on Bauxite Plants”, published May 7,
2014 By Andrea Braham, The Jamaica Information
Service and “UC
Rusal granted additional two-year Bauxite levy concession”, published May
7, 2014, RJR News.
But
despite this, US Rusal still wouldn’t restart Mining, forcing Minister of
Science, Technology Energy and Mining Phillip Paulwell to give the company six
(6) month ultimatum or face losing their Mining licenses as reported in the
article “Gov't
gives six-month notice to UC Rusal to resume Mining”, published Friday,
July 11, 2014, The Jamaica Observer.
Clearly
Energy was the problem, UC Rusal Manager Igor Dorofeev announced that albeit
Coal and LNG (Liquid Natural Gas) were options, they had it in mind to use
Ethane as explained in the article “Rusal
Exploring Ethane For Alpart Plant”, Published Sunday July 20, 2014 by
Daraine Luton, Senior Staff Reporter, The
Jamaica Gleaner.
It
was the cost of Energy that was making Production at the Alumina works inefficient,
as using Bunker C Oil direct from Petrojam was costly and inefficient when
compared to the cheaper alternatives.
But
sometimes it takes a little competition to put things into perspective.
UC Rusal to reopen
ALPART mines - Competition from Xinfa Group and Noble Group
So
I guess with this new arrangement, UC Rusal has finally made up their minds.
But
it can't be because a Minister of Technology of a Developing World country
forced them, as these multinationals are driven by profit making. Most likely
it had to do with competition from the Chinese and the British in the form of
the Noble Group and the Xinfa Group Company.
The
Chinese-based Xinfa Group Company has popped on the scene quite suddenly in the
middle of their haggling with the Minister of Science, Technology Energy and Mining
Phillip Paulwell back in May 2014.
Xinfa
Group Company wanted to take over the
Reynolds Bauxite Mines in Lydford, St Ann and build a new Bauxite Plant for some
US$3 billion 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”.
Most
likely UC Rusal took note of this.
By
July 2014, Minister Phillip Paulwell had announced in that the Noble Group were
going to purchase a part of ALCOA's stake in the CAP (Clarendon Alumna
Partners) joint venture in the JAMALCO Plant in Halse Hall, Clarendon as stated
in my blog
article entitled “JAMALCO
sold to Noble Resources Limited as ALCOA pulls out – UC Rusal stalling on
ALPART and Kirkvine refineries as Xinfa Group Company interested”.
By
then, UC Rusal was being threatened with a revocation of their Mining license,
which I must say was incredibly good timing on the part of Minister Paulwell,
as it set the stage for what happened next.
This
action probably got them scared, especially the action of the Chinese. They wouldn't be spending that kinda cash
unless the saw something coming in the Bauxite and Alumina market.
The
Chinese are bad enough.
But
when in October 2014 Noble Group sealed the deal and then even opted to buy ALL
of ALCOA's stake in CAP as reported in my blog article
entitled “Noble
Group buys JAMALCO as Chinese Aluminium demand rises – Why Noble Group BOOT's
JAMALCO as GOJ keeps CAP and 381 MW Power Plant on track” that must have tipped
them off that an increase in the price of Alumina was coming.
Russians fear Chinese
Ambitions – Increase in the Price of aluminum coming by 2017
Fearing
that British owned Singapore-listed Noble Group and Chinese owned Xinfa Group
Company were planning to hoard Bauxite and Alumina and possibly lower Alumina
prices globally, I suspect the Russian Government must have stepped in to
secure their stake and future supplies in the Bauxite and Alumina Markets.
Most
likely, this increase in Chinese demand for aluminum was due to their ongoing Military,
Trade, Construction and Space Exploitation boom, activities that need a lot of
aluminium by 2017.
Evidence
their fear and desperation could be clearly seen from the fact that they
hastily agreed with Minister of Science, Technology Energy and Mining Phillip
Paulwell to just mine the wet, raw Bauxite and send it back to Russia.
They
even waived their two (2) year concession on paying the Bauxite Levy in
exchange for them building a Coal-Fired Refinery to refine Bauxite into Alumina
as stated in “Gov’t
and UC Rusal to Conclude Discussions on Bauxite Plants”, published May 7,
2014 By Andrea Braham, The Jamaica Information
Service and “UC
Rusal granted additional two-year Bauxite levy concession”, published May
7, 2014, RJR News.
This
isn't a company doing business; this is the Russian Government acting through
UC Rusal reacting in fear to China hoarding Alumina by securing their own allotted
amount of Alumina as the possibility of a War may be looming on the horizon in
Europe.
Stay
Tuned!
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