John Myers Jr., Business Reporter

Fabrini

Alumina Partners of Jamaica (Alpart), the largest bauxite mining company and a subsidiary of the Rusal group, plans to expand by 350,000 tonnes, but said the project rests on the result of an audit that the company has commissioned.

The review will both determine the cost of the expansion as well as its financial feasibility, with Alpart managing director Alberto Fabrini noting that until then, the investment could not be priced.

However, the Financial Gleaner, using as proxy the investment just made by rival Jamalco to build capacity, estimates that the St. Elizabeth-based bauxite company may need to spend upwards of US$280 million.

At US$120 million, Jamalco would have injected US$800 per tonne to add to the 150,000 tonnes of capacity, a project completed in the first calendar quarter of 2007 that ramped up production capacity to 1.425 million tonnes.

Fabrini, who just joined Alpart at the start of June, was the head of Clarendon-based Jamalco and overseer of that project for his former bosses at Alcoa in Pittsburgh. He is yet to be replaced by Alcoa.

"We are also studying bauxite availability which is essential for us to go into any kind of expansion because if we don't have certain years of bauxite (reserves) ahead of us then it becomes difficult," said Fabrini of the Alpart project.

The processing plant, located in Nain, can produce as much as 1.65 million tonnes of bauxite annually. The expansion will take output to two million tonnes.

Fabrini said production should peak near the 1.65 million-tonne capacity this year, despite the minor setback from Hurricane Dean in August.

65% owned by Rusal

Alpart is 65 per cent owned by Rusal, the world's largest bauxite company. Rusal also owns a 93 per cent stake in West Indies Alumina Company (Windalco), which when combined with the stake in Alpart, represents about 26 per cent of its worldwide bauxite operations.

The European company currently employs over 100,000 workers in 17 countries, and produces some 10.6 million tonnes of alumina annually.

The Russian bauxite company announced plans earlier this year to invest an estimated US$270 million - US$360 million in two new 90-megawatt coal-fired plants in Jamaica as it searches for lower cost and increased sources of energy to power its Windalco and Alpart operations. The excess power will be sold to the national grid, Rusal's representative, Igor Dorofeev, said in June.

"One of the things that we need to do now is to incorporate into these studies a component of efficiency because as you know being an old plant we are very intensive in our energy (consumption)," said Fabrini.

"We need to improve the efficiency in our system so we can make this investment feasible. That is one of the engineering studies that we are into now."

Fifth largest producer

Jamaica is the fifth largest bauxite producer in the world. Total raw bauxite topped 14.7 million tonnes, last year, which was 5.3 per cent above 2005's previous record of 14.3 million tonnes. The export value of bauxite and alumina reached US$1.1 billion in 2006.

"Jamaica has some advantages. We still have to work on the energy side, but the fact that we have the bauxite next to the refinery is always a positive advantage," Fabrini said, comparing mining operations in Jamaica with Rusal's other operations.

"In terms of productivity, we have some room to improve," he said. "We definitely need to achieve our efficiency targets."

john.myers@gleanerjm.com