MINING AND QUARRYING (2009)

The year 2009 registered a downturn in the sector's contribution to total GDP, 2.0 per cent when compared with 3.8 per cent in 2008. Total output by the sector in 2009 was J$9.6 billion. This was as a result of a decline in the production of both alumina and crude bauxite. The sector received a major set back when two of its key plants, Windalco and Alpart were forced were closed due to unfavourable conditions in the international market. Consequently more than 900 employees of both companies were laid off. In addition the industry’s total employment fell by 0.3 per cent to 5,600 resulting in a 0.5 per cent contribution to the total amount of employed persons.

Training

Policies are currently being discussed and received with the intention of creating an official training and accreditation programme for different levels of personnel in the industry. This initiative is being undertaken by the Ministry of Energy and Mining along with several other stakeholders such as HEART Trust/NTA, the Mining and Quarrying Association of Jamaica and the University of Technology .

Bauxite and Alumina Sub-Industry

Due to the temporary closures of Windalco and Alpart during 2009, total bauxite production amounted to 7,817.5 kilo tonnes compared to 14,567.7 kilo tonnes the previous year. The production of Alumina also declined by 55.6 per cent to 1,773 kilo tonnes compared to 2008. The total capacity to produce bauxite fell to 71.1 per cent in 2009 from 89.0 per cent in 2008. Production of crude bauxite decreased by 28.1 per cent to 3,200.1 kilo tonnes.

In an effort to mitigate the impact of the downturn in the Mining Industry, the Ministry of Energy and Mining in collaboration with Jamaica Trade and Invest (JTI) identified new markets for the mineral products including industrial and metallic minerals.

Norando Aluminium Holding Corporation agreed to divest St. Ann Bauxite Partners to Norando Bauxite Jamaica Company. This divestment is expected to export 4.6 million tonnes of minerals in 2010.  

Export

Due to the fall in the production, exports registered a decline of 55.3 per cent to 1,884.0 kilo tonnes. Canada and Norway accounted for the largest share of exported Alumina/Bauxite with 25.7 and 15.8 per cent respectively. There was a large decline in exportation to the USA, Netherlands and Canada. However exports to Georgia and China increased to 115.8 kilo tonnes and 79.6 kilo tonnes respectively. Crude bauxite export declined by 27.8 per cent to 3,196.3 kilo tonnes compared to 2008. The total amount of bauxite exported decreased by 44.9 per cent to 8,103.9 kilo tonnes.

                                                 Table 1: Jamaica Bauxite/Alumina Exports ‘000 tonnes

Export Earnings

Total export earnings declined by 65.8 per cent to US$476.5 million. The average export price for alumina for 2009 was approximately US$202.87 million, 30.5 per cent lower than in 2008. Foreign exchange inflows decreased by 50.2 per cent to US$27.1 million. These declines were noticeable since investors remitted less funds to offset operational expenses such as wages and salaries, due to the closure of the plants. The country also received less money from the bauxite levy and royalty.

Quarrying Sub-Sector

The mineral sub-sector also saw declines in the production of most industrial minerals compared to 2008. Silica sand amounted to 6,792 tonnes a 54.1 per cent decrease compared to the previous year. The quantity of gypsum mined declined by 34.2 per cent to 156,877 tonnes. These declines were a result of a reduction in the regional demand for building material. However, there was growth of 6.6 per cent in the production of pozzolon, which increased to 132,470 compared to 2008.

Marble remained unchanged at 120 tonnes. Lower production levels were recorded for sand, gravel, limestone, marl and fill and clay. The reduction in the production of marl and fill was due to the completion of major infrastructure projects across the island.

Projections for the Sector

It is projected that by 2010 the production of alumina will decline by 12.0 per cent to 14.0 per cent as it is anticipated that Alpart and Windalco the main alumina plants will remain closed. However due to the divestment of St. Ann Bauxite Company, crude bauxite production is predicted to grow.

Source: The Economic and Social Survey (2009)