Jamaica Bauxite Mining positions for steep climb in limestone shipments

Jamaica Bauxite Mining Limited, JBM, expects to max out capacity at the Reynolds Pier if, as expected, limestone shipments volumes rise to 1.5 million metric tonnes, or six times their current levels.

Once that happens, the company plans to expand the pier located on the cusp of the resort town of Ocho Rios in St Ann.

Six shipments of limestone usually leave the pier annually with about 250,000 tonnes combined. But business is now on the rise.

“We are at 12 ships now. We have deep waters and can handle small barges to big vessels, including Panamax,” said JBM Managing Director Donna Howe. Panamax ships are superlarge vessels that are specifically designed to efficiently transit the Panama Canal.

JBM is projecting shipments of nearly 750,000 tonnes of limestone through the Reynolds Pier this year and then onwards to 1.5 million in 2024. That’s equivalent to the full capacity at the pier. Thereafter, the company plans to expand the pier’s capacity to 4.5 million tonnes. But Howe said that capital upgrade will start taking shape over the next “two or three years” after doing a series of planning studies and permit applications.

“At the moment, the capacity can do up to 1.5 million tonnes in its current state with remedial equipment and repairs. However, the demand market, especially coming from North American off-takers, show there is an immediate shortage of limestone to supply them with aggregate,” said Howe. “We would like to respond to that demand, and we can increase capacity to go to 4.5 to 6.0 million tonnes with an expansion of the port here, but using a lot of the existing equipment and supply.”

JBM is not itself a producer of limestone. Instead, it offers port services to the vessels that transport cargo to overseas markets. Within the local limestone sector, Lydford Mining in St Ann, one of the largest operators, recently landed new contracts in the United States and its cargo was shipped from Reynolds.

The 274-metre-long Reynolds Pier currently facilitates the berthing of industrial ships, passenger cruise vessels and cargo vessels. The state-owned company offers port services, landholding and property management services. JBM, an agency of the Ministry of Transport & Mining, currently owns and manages the assets formerly held by Reynolds Jamaica Limited, which includes lands and the pier.

The stepped-up limestone shipments aligns with JBM’s goal of diversifying its revenue from the dwindling sugar trade and, before that, slumping bauxite exports that resulted from the sale of Reynolds’ mining operations over 25 years ago. Its initiatives also include plans to set up a water-bottling plant. It would distribute the water to ships that drop anchor in Jamaica, as well as sell the commodity to resorts. It’s meant to build on a segment in which the company has operated for a decade, but without any marketing or advertising, as bulk water supplier to ships.

“Sugar exports are only at 6,000 tonnes annually, so now our attention has shifted gears to optimise the pier to limestone and aggregate exports,” said Howe. “The loss of revenue stream was the reason that JBM has diversified to make use of the port. And it’s a natural fit. We already have the limestone, and the market is calling out for it,” she said.

She added that while sugar exports delivered a higher profit margin, limestone earns more in absolute dollars due to the large volume orders.

This fiscal year ending March 2024, JBM is projecting a surplus of $14 million from revenue of $602 million. Revenues are expected to be flat year-over-year.

The company is investing $980 million in capital projects for this fiscal year, up from $270 million a year earlier, according to the Jamaica Public Bodies report published by the Ministry of Finance. The bulk of the expenditure, $699 million, will go towards upgrading its warehouse, followed by upgrades to the pier and port facilities at $215 million, and $100 million for housing developments.

In terms of its bauxite remit, JBM continues representing the Government of Jamaica’s investment in the Noranda Jamaica Bauxite Partners II by providing management support to Noranda, which operates bauxite mines in St Ann.

Howe also wants to position JBM as the regional leader in the handling of limestone shipments.

“We are the only exporter of limestone in the country and we want to be the largest exporter of limestone in the region, to attract buyers from North America,” she said.

Jamaica produces around three to four million tonnes of limestone annually, almost all of which is consumed by the construction sector.

In preparation for expansion of the pier, Jamaica Bauxite Mining is seeking an engineering firm to assess and retrofit the ship-loader structure that’s been installed at Reynolds since the 1960s or ‘70s, and is the means by which it moves the limestone and sugar aboard cargo ships.

“These commodities are loaded on vessels using the ship-loader, together with a hopper and a conveyor system,” said JBM in the tender document.

“The ship-loader, originally installed approximately 50 years ago, is critical in JBM’s vessel-loading operation and has since suffered from severe corrosion in certain areas, and has also incurred incidents which saw damage to the boom and support structure.”

steven.jackson@gleanerjm.com