The Government of Jamaica has sold its remaining seven percent shareholding in West Indies Alumina Company (WINDALCO) to Russian aluminum giant UC Rusal, for US$11 million, however, the money will not go to the Government's coffers.
In a statement to Parliament on Tuesday, Mining Minister Phillip Paulwell said the purchase price will be applied as a credit against a debt of US$21 million owed to UC Rusal. The remaining debt will be settled by the Jamaica Bauxite Mining Company.
“The truth is that the cost of production per ton of alumina at WINDALCO has been significantly higher than the price of alumina and over this time this debt led to an accumulative amount of US$23 million. This situation has become untenable and the sale agreement will save the country some US$3 million per annum," Paulwell said.
It was also revealed that the Government has agreed to exempt Rusal from paying the bauxite levy for a further two years, effective October 1, 2013.
The exemption applies to WINDALCO's Ewarton plant; however there are conditions.
“They are to commence construction of the coal fired electricity generating plant within this period that will provide a solution to the company’s high energy costs. They are to submit quarterly reports detailing the performance of the WINDALCO plant against an agreed work plan of efficiency which relates to improvements in the plants ,” he stressed.
Meanwhile, Karl Samuda, Opposition Spokesman on Mining, told the Minister that he had no problem with the decision to sell the WINDALCO shares.
“Regrettably we are getting a lower price today than we could have gotten before, but time has overtaken us and the bauxite industry has not rebounded in a manner that we had hoped,” he said.
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