By Balford Henry,
Senior Reporter
INDICATIONS ARE that recently-pardoned American commodities trader Marc Rich will again be involved with the rescue of the local bauxite/alumina industry by purchasing the assets of Alcan Jamaica Company.
Glencore International AC, expected to take over Alcan's local operations by the end of March, was formerly Marc Rich and Company AC.
Rich, one of the world's wealthiest men, was one of the United States' most wanted fugitives, until he was pardoned by former US President Bill Clinton, of racketeering and tax evasion charges. He had been exiled in Switzerland, where Glencore is based, for the last 15 years.
A House Panel on Capitol Hill, Washington, D.C., opened hearings yesterday into the motives behind Clinton's pardon of Rich, amid a report that the last-minute pardon were granted without the usual Justice Department scrutiny.
A 10-year agreement between Marc Rich & Co. and the Government of Jamaica expired in 1996 and a new agreement to 2002, was signed with its successor company Glencore, which offered more flexible and favourable pricing arrangements.
Under the current agreement BATCO (Jamaica's Bauxite and Alumina Trading Co. Ltd.) sells some 250,000 tonnes of Jamaican alumina annually to Glencore on a basis which allows the parties to establish prices annually and an additional 100,000 annually using various pricing mechanisms.
Because of the Government's problems with financing its budget, several forward sales arrangements have been made with Glencore which, sources say, have left the country heavily indebted to Rich's Swiss firm and could impact on its negotiations with Glencore over the local Alcan assets.
The Government signed an agreement with Glencore in 1999 for the sale of alumina for the five years, 2000-2004. Dr. Omar Davies, Minister of Finance and Planning, told the House of Representatives in November 1999, that the agreement was to sell Jamaican alumina at fixed prices as a loan to help finance the 1999/2000 budget.
Norman DaCosta, the NWU spokesman on bauxite/alumina, says the union will be meeting with Glencore's representatives on February 23 to discuss how the sale will affect the workers. He said he had no doubt that the change would affect jobs at the company.
It is possible that the Kirkvine plant, which is considered aged and short on space, technology and raw material for expansion, will either close or change to producing hydrate. However, he says that a feasibility study of the Ewarton plant suggests that it has the proximity and resources to expand.
However, it is uncertain what Glencore will do about the workers on the 15 dairy, beef and horticultural farms owned by Alcan Jamaica Company. That will certainly depend on how Glencore, the world's largest commodities dealers, look at trading beef, dairy and horticulture in addition to metals and oil.
