Jamalco experienced one of the worst disasters in its 63-year history on 22nd August 2021 and marked 22nd August 2022 as the first anniversary of the fire incident at its alumina refinery.
Jamalco is a joint venture between General Alumina Jamaica Limited and Clarendon Alumina Production Limited (CAP), focusing on bauxite mining and alumina production. Jamalco mines bauxite and refines it into alumina before it is exported from its port at Rocky Point, Clarendon.
An extensive fire broke out at the company's powerhouse on Sunday, August 22, 2021, damaging it extensively and dislocating its source of power, compressed air, and steam used for refining operations.
Production was halted for over ten months as a result of the event. A year later, the company reports that phase one of the recovery processes has been completed, and new plans are afoot to increase fire safety resources.
Jamalco expects to return to 100 per cent production by September 2022 if everything turns out to be all right. However, reconstruction will be completed by 2024.
The Managing Director of Jamalco, Austin Mooney, stated that high energy prices negatively affect the company's operations.
Mooney said, "Russian energy giant Gazprom has drastically cut natural gas deliveries to Europe via the Nord Stream pipeline to about 20 per cent of its capacity. The EU states have accused Russia of squeezing supplies in retaliation for Western sanctions over Moscow's war in Ukraine."
"The reduction in supplies has pushed natural gas prices in Europe to unprecedented levels and has forced Europe to tap into alternative supplies, especially liquefied natural gas [LNG] from global markets. This has reduced the supply to other markets, causing LNG prices to skyrocket globally."
To combat the fluctuating energy prices in Europe and globally, Jamalco is implementing cost reduction initiatives to reduce costs.
LNG is now ten times more expensive than a year ago, according to Mooney. "Although we do not buy LNG from Europe, most of the United States LNG is being exported to Europe, resulting in a global shortage."
"There are reports of significant cutbacks in production at refineries all over the world, so this energy crisis has reinforced Jamalco's strategic advantage of being dual-fuelled on the boilers and the reason boilers four and five will be converted to use both gas and (HFO) heavy fuel oil", Mooney said.
Consequently, he noted, the company is exploring every possibility to reduce expenses.
Mooney said, "It is for this reason that it is imperative to expedite the restoration of HFO to boilers four, five, six and six B. We hope the transition will be completed by the end of the year. Until that time, the organisation will be under pressure to meet its cost obligations."
The refinery has returned to operation with one digester and is ready to export its main product, alumina, again one year after the fire.
Mooney said, "The organisation is in a position to embark on 100 per cent production, but the global economic impact on the price of gas is forcing us to remain a one-digester operation. Our goal for the remainder of the year will be to operate as efficiently as possible on one unit while we wait for the global economy to recover."
"The company decided to keep the original powerhouse design because the powerhouse has served us well. Jamalco needs to maintain dual fuel flexibility with both heavy fuel oil [HFO] and gas. If the refinery were fuelled only by HFO, we would still be shut down, but because we have the alternative gas system, we have been able to restart production."
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