Injunction filed in the Jamaican Supreme Court - file photo
By Dashan Hendricks
The Jamaican Government has filed an injunction to prevent Noranda Bauxite Company from exporting any more of the mineral until a dispute with the company has been resolved.
The injunction was filed in the Supreme Court on Friday, seeking to stop Noranda from exporting bauxite until a dispute over the payment of the levy is settled.
The Government is insisting on Noranda paying the Bauxite Levy for every ton of the mineral that is exported, while Noranda contends that it is entitled to withhold these payments.
Payments of the levy, which were suspended in 2010 but should have re-started in February this year, are yet to come into the coffers of the government. The latest government accounts, released on Friday, show $147 million in levy that was budgeted for April was not paid.
Dispute
The dispute with Noranda started in January. RJR News obtained a copy of the document, filed in the Supreme Court on Friday, which showed a string of correspondence between the Government and Noranda, dating from February 11 to March 27, after which the dispute was sent to arbitration.
The injunction suggests that Noranda has been stalling on the arbitration proceedings, while it continues to export bauxite from Jamaica. But the Government wants the exports to stop, because it fears that after the material is exported, recovering the outstanding revenue will prove too difficult, even with the authority of a court order.
The Government is reportedly basing that opinion on the fact that Noranda has been facing financial difficulties, which have worsened in the last year. Financial statements obtained on the company, and which formed part of the affidavit filed in the injunction, show Noranda and its parent company, Noranda Holdings, have been experiencing deteriorating performances and a weakened financial position since 2010.
Weakened position
The company is barely able to cover its current liabilities; it has accumulated losses of almost US$ 29 in the last three years, with $20 million occurring last year alone.
Noranda has not been covering its basic operating expenses during this period, with those expenses exceeding income by US$8 million last year.
The company's single largest shareholder – US based hedge fund, Apollo Global Management - last month dumped 33 per cent of its Noranda Holdings stocks, sending the company's share price down by more than 25 per cent.
Up to April this year, Noranda had exported just under two million tons of bauxite. With the levy at $7.56 per ton, had Noranda been paying, the Government of Jamaica would have already collected more than US$15 million from the company.
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