PROMISING PROSPECTS

Jamaica 2018 | ENERGY & MINING | FOCUS: BAUXITE INDUSTRY

Once the top producer of bauxite in the world, Jamaica had been overtaken by other countries in recent decades; however, renewed interest from Chinese and Russian companies offers encouraging possibilities to the sector.

According to the Jamaica Bauxite Institute, geologists as far back as 1869 had identified the “red ferruginous earth” in Jamaica. Bauxite deposits are found in quantity in a wide belt around the equator. It generally takes two to three tons of bauxite to produce one ton of alumina, which serves to produce aluminum. The Bayer process, invented in 1887 by Austrian scientist Karl Josef Bayer, made the production of aluminum commercially viable at an industrial scale.

However until WWII, bauxite deposits outside Europe and the US were not utilized. Then, during the war, three North American companies—Alcan, Reynolds, and Kaiser—began to survey bauxite in Jamaica and acquired land for the mining of aluminum's primary ore. After the first shipment of bauxite from Jamaica in 1952, production increased rapidly, and by 1957 Jamaica had become the leading bauxite producer in the world. Since then, Australia, China, Guinea, Brazil, and India overtook Jamaica as the world's leading producers of bauxite.
The 2008 recession severely affected Jamaica's bauxite industry and resulted in the closure of Alpart, Windalco Kirkvine, and Windalco Ewarton mines. Since then, Alpart and Windalco Ewarton have reopened while Windalco Kirkvine is still closed. In 2016, the Noranda Bauxite plant lost 50% of its volume due to lower demand from two refineries in the US and sank into bankruptcy before being purchased by Dada Holdings LLC in October.
According to the Planning Institute of Jamaica, total bauxite production, including bauxite equivalent of alumina, decreased in 2016 to 8,540 kilotons from 9,628 kilotons in 2015 due to lower output. Output from Noranda Bauxite Company was down 24.7%, to 3,402.5 kilotons, and Alpart's output was down 34.3%, to 194.5 kilotons. The crude bauxite capacity utilization (BCU) rate fell from 84.5% to 63.6% while the alumina capacity utilization (ACU) rate remained flat at 41.9%.
But bauxite's consumption is growing in China and Europe, and offering new hopes for Jamaica's bauxite industry and downstream value chain. Global demand for alumina grew by 3.2% to 114,953 tons in 2016. The growth was mainly driven by China, which accounts for 54.5% of global consumption. Consumption also grew in Europe by 2.5%, to 15,750 tons. Jamaica's share of the world alumina market is now 1.6%, and the total value of bauxite and alumina exports is USD546 million: USD455.9 million from alumina and USD90.1 million from crude bauxite. ✖