J$2-billion restart plan for Kirkvine
Published:Wednesday | February 16, 2011 | 12:00 AM
UC Rusal, the largest owner of bauxite/alumina assets in Jamaica, says it will spend as much as US$17.5 million (J$1.5b) to recommission its Windalco-Kirkvine Works Plant, which will restart production on July 1 after a two-year shutdown.
The Russian company also announced Tuesday that it will be spending US$9.5 million (J$817m) at the Manchester-based plant over the course of this year, January to December, during which time it will ramp up to just 42 per cent of capacity.
Th company did not specify whether the US$9.5 million was in addition to or included in the recommissioning investment.
The restart of operations is subject to the approval of international lenders and further discussions of the company with its partners on the project, UC Rusal said.
Industry sources say the company last met with Jamaican officials back in December where the discussions included investment in the restart of operations, according to well-placed sources, who also said that once UC Rusal files, and Jamaica approves the required mining and restoration plans, there would be no impediment to their restarting operations.
Kirkvine has a capacity of 600,000 tonnes of alumina per year, but plans to produce just 252,000 tonnes in 2011.
Rusal's combined Jamaica operations account for 1.2 million tonnes of production capacity.
The Kirkvine Works plant was mothballed in April 2009 after world alumina prices tanked. UC Rusal in a move to cut costs as its debts ballooned, ramped down production at several of its facilities worldwide.
The Jamaican shutdown was expected initially to have lasted a year.
UC Rusal now says market conditions have improved sufficiently for the company to get back in the game.
"The company has carefully reviewed ways of optimising the facility's structure and production process, reducing cash operating costs and improving the efficiency of the Windalco-Kirkvine Works Plant's operations," said UC Rusal.
Should increase efficiency
"It is expected that the restart of the Windalco-Kirkvine Works Plant will increase the efficiency of the infrastructure in Windalco — including port and railway — which is only partially utilised for the Ewarton Works Plant at present."
The company's Manchester office referred requests for more detailed comments to the Russian headquarters, but efforts to reach that office were hampered by the time difference. Jamaica Bauxite Institute referred queries to Rusal's local representative Igor Dorafeez, but he too could not be reached, despite several attempts.
Rusal's Jamaican assets include alumina refineries at Ewarton Works and Kirkvine Works, the Port Esquivel shipping port, and bauxite mines at Schwallenburgh in Ewarton, St Catherine and Russell Place at Kirkvine, as well as farms in Manchester and St Ann.
The Russian company, which operates in 19 countries worldwide, accounts for 10 per cent of the global production of aluminium and alumina, making it the world's largest producer.