The plant was closed for the last five years, reportedly due to low market price and high production costs.
Mining and Energy Minister Phillip Paulwell, who made the announcement about the planned opening at a press conference at Jamaica House yesterday, said Cabinet approved his submission for RUSAL Alpart Jamaica to mine and export up to two million crude wet tonnes of monohydrate bauxite over an 18-month period, with mining commencing in January 2015 and export in July 2015.
“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 as well (as) an expression of confidence on the part of UC RUSAL in the future of our bauxite and alumina industry,” Paulwell said.
The minister explained that the deal will see employment of up to 250 Jamaican contractors at full mining capacity; commencement of port development works next February; repairs of affected roads and related activities for refinery readiness in the second quarter of 2016 and the establishment of appropriate and agreed energy solutions for the reopened refinery, as well as significant electricity supply to the electricity to grid.
Under the agreement, Alpart at start-up, according to Paulwell, will have access to the allocation of 30 years’ bauxite reserves to meet its capacity.
He further explained that in order to raise economic efficiency of alumina production at Alpart, UC RUSAL will modernise the facility, particularly through conversion from heavy fuel oil to gas in order to generate steam and electricity.
Paulwell said the ethane-fuelled co-generation facility will be commissioned before the end of 2017 and the Jamaica authorities will facilitate access to the Jamaican energy grid.
In addition, Paulwell said Alpart’s production will be dedicated to the 600,000 tonnes per annum Boguchany Energo-Metallurgical Union aluminium smelter which will be completed in Russia’s Krasnoyarsk.
“The arrangement that has been consummated with RUSAL Alpart Jamaica reflects a positive partnership and signals the intention of both parties to proceed in a mutually beneficial manner, earning the investor profitable returns on its investment, while generating national income and the creation of jobs,” the minister said.
He noted that RUSAL Alpart Jamaica will represent a large production complex in Jamaica with its own bauxite mines to feed alumina production. Annual production capacity of the complex is expected to be some 1.65 million tonnes of smelter-grade alumina.
The minister said the investment in plant modernisation, development of port facilities and the ethane co-generation facility is in the region of $400 million.
Among the cost-benefit of utilising this alternate energy source, according to Paulwell, will be the provision of more reliable utility generation equipment and up to 25 per cent reduction in overall electricity rates.
Paulwell said this deal will have significant impact on the national economy, as the reopened refinery, with a capacity for export at 1.65 million tonnes per year and export value of over US$500 million, will also see 300 to 400 people employed in the construction of the new power plant over the 27-month period. Operation of the new gas power plant facilities will require between 80 and 100 employees and contractors; and re-commissioning of Alpart’s refinery, port, mines, and other facilities, will generate at least 1,000 to 1,200 employees and contractors over the 15-18-month period.
“This long-awaited deal must be seen as a real game-changer in Jamaica’s bauxite and alumina industry,” Paulwell said. He noted that even without trespassing on protected areas, Jamaica has reserves that can support viable mining and refining activities for more than half-a-century.