Jamalco, Jamaica’s premier bauxite mining and alumina refining enterprise, has unveiled a whopping investment of USD 70.5 million (JMD 11 billion) aimed at prolonging the operational life of its mining activities by tapping into additional bauxite reserves in Manchester.
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The earmarked capital expenditure is slated for mine development and the installation of advanced equipment over a three-year span, from 2025 to 2027. This initiative is integral to Jamalco’s ‘Project Restore’, which seeks to enhance the refinery’s feed and ensure a consistent bauxite supply.
Jamalco’s history of resource management relies on grade control sampling and the avoidance large reserve inventories. It utilises auger drilling for exploration, with assays or testing of the ore to determine composition and quality conducted at its certified laboratory in Clarendon. Through Project Restore, Jamalco aims to overcome its resource constraints.
The refinery, located at Halse Hall in Clarendon, boasts an annual production capacity of 1.4 million tonnes of alumina, necessitating approximately 2.5 tonnes of bauxite for each tonne of alumina produced.
However, according to our industry expert’s statement, “This conversion ratio is way too low. The bauxite grade is nowhere near an availability of 50 per cent and the plant has never had an extraction efficiency near 100 per cent. The conversion ratio is likely between 2.7 and 3.0 tonnes of bauxite per tonne of alumina. Jamalco will find it more and more difficult to find, mine and maintain even its current grade of bauxite in the future. They have been working out their best ore for the past 50+ years. Ore is getting lower in grade and more scarce and more difficult terrain to win it from.”
“Currently, the ownership of land parcels requires Jamalco to obtain sufficient rights before exploration is completed,” communicated the Jamalco Technical Report Summary, produced by its mother concern, Century Aluminum, which is headquartered in the United States. “Resources at SML 130 remain processable with existing refinery technology, while SML 169 resources can be blended into the feed,” the report noted.
Currently, a significant 90 per cent of Jamalco’s bauxite supply is sourced from Special Mining Lease (SML) 130 in southern Manchester. However, with SML 130 approaching depletion, the company plans to transition operations to SML 169 in northern Manchester. This lease encompasses properties owned by both the Government of Jamaica and private citizens, introducing complexities related to land ownership and community relations.
Jamalco operates as a joint venture between Century Aluminum, which acquired a 55 per cent stake in May 2023, and Clarendon Alumina Production Limited (CAP), representing the Government of Jamaica’s 45 per cent interest. Established in 1959 as a bauxite mining venture by Alcoa, Jamalco commenced alumina production in 1972 with an initial capacity of 500,000 tonnes per year. Through successive expansions, the refinery’s capacity has grown to its current 1.4 million tonnes per year.
Century Aluminum, headquartered in the United States, is worth USD 662 million, based on its capital as of December 2024. The company has demonstrated a robust financial performance in recent quarters. In the third quarter of 2024, the company reported net sales of USD 539.1 million and a net income attributable to shareholders of USD 47.3 million. This positive trend continued into the fourth quarter, with net sales rising to USD 631.0 million and a net income of USD 47.7 million. For the full year 2024, Century Aluminum achieved net sales totalling USD 2.2 billion and a net income of USD 339.4 million. Century Aluminum is 43 per cent owned by Swiss company Glencore.
The planned shift to SML 169 is not without challenges. Mining on lands owned by private citizens and the government necessitates careful negotiations to secure the necessary rights for exploration and extraction. Historically, Jamalco’s operations faced fewer community resistance issues, as much of the land was either government-owned or under Jamalco’s control. In contemporary settings, however, mining on sensitive lands has become a contentious issue, with enhanced importance of engaging with local communities and addressing environmental concerns proactively.
Jamalco’s investment in extending its mining operations is crucial in its efforts to maintain its position as a leading alumina producer. By accessing new bauxite resources and upgrading its infrastructure, the company aims to ensure a steady supply of raw materials to its refineries across the globe, thereby supporting its production targets and meeting global demand. However, the success of this initiative will hinge on effective stakeholder engagement, sustainable environmental practices, and the ability to navigate the complexities associated with land ownership and community relations.
The financial results for Jamalco are yet to be brought forth for the 2024 year. For the year ending December 2023, Jamalco revenue share towards its parent company was USD 150.3 million. However, the Jamaican mining business itself recorded a loss of USD 41.1 million.
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