Future of Alumina Sector Hinges on Energy Cost

The continued operation of all four alumnia plants in Jamaica, including even the most efficient, CAW, depends on the industry having a long-term source of competitive energy as well as resolving certain bauxite reserves issues. Two actions are necessary to achieve these objectives: Substituting oil with a cheaper fuel and making the necessary investments to accommodate the new fuel; making the necessary investments to improve the efficiency of whatever fuel is used.

Although relying on imported oil for 90% of its energy needs the Jamaican economy developed over many years on the basis of relatively cheap oil imports which prevailed in the 1950s, 1960s and 1970s prior to the OPEC action in 1973. MMThese relatively low prices were a factor in the growth rates of the economy in the 1950s (average annual rate of 6%) and the 1960s (average annual rate of 2.9%). Specifically, low prices contributed to the rapid growth of the bauxite sector during these two decades:

• The Kirkvine, Manchester alumina refinery grew from an almost ‘pilot plant’ level of about 40,000 tonnes per annum in 1952, to current capacity of 550,000 tonnes per annum.

• The Ewarton, St. Catherine alumina refinery, opened in 1959 and reached a capacity of 550,000 tonnes per annum. 

• The Alpart, St. Elizabeth refinery opened in 1969 with a starting capacity of about 850,000 tonnes per annum, then the largest starting capacity of any alumina plant in the world. 

• The Halse Hall, CAW refinery, opened in 1972 with a starting capacity of about 450,000 tonnes per annum. The only thing that cheap oil did not allow for was to enable the country to go further ‘upstream’ by smelting alumina into aluminium; however, oil prices were sufficiently low for the matter to be looked at seriously by the Government of Jamaica.

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