Noranda reinvests as bauxite recovers
Published:Wednesday | August 3, 2011 | 12:00 AM
Noranda Aluminium has invested US$2.1 million (J$180 million) in the expansion of its Jamaican operations in St Ann, a newly released financial report shows.
The investment represents seven per cent of Noranda's US$29.3 million capital expenditure since January. St Ann Bauxite Company in Discovery Bay feeds Noranda's Gramercy alumina refinery in the United States.
Noranda says on its website that "substantially" all of the bauxite used at our Gramercy refinery is from St Ann, where production is about 4.5 million tonnes of bauxite ore.
Noranda acquired a 49 per cent stake in St Ann Bauxite from Century Aluminium in 2009 with the Government of Jamaica holding the remainder.
Noranda's net income rose 587 per cent in its second quarter to US$47.5 million ending June 2011 compared with year-earlier levels. Half-year profit increased to US$85.7 million or by a factor of nearly 13 compared with year-earlier levels at US$6.8 million. The radical rise in profits in part reflects the global recovery in bauxite commodity prices which triggered increased production.
"Our upstream integration and continuing focus on growth and productivity enabled us to convert higher second-quarter aluminium prices and solid customer demand into sequential and year-over-year improvements in revenue, profitability, and liquidity," said Layle 'Kip' Smith, Noranda's president and chief executive officer.
"These results validate our belief that our strategy of integration and cost independence from the London Metal Exchange, combined with our passionate focus on productivity and growth, are the foundation for short-term results and longer term, sustainable value creation," he said.
Total bauxite production in Jamaica rebounded to 8.54 million tonnes in 2010, up 9.2 per cent over 2009. The recovery still trails pre-crisis levels at 14.5 million in 2008. Bauxite and alumina exports earned Jamaica US$533 million in 2010, up 14 per cent over year-earlier levels, but still way below highs of US$1.36 billion in 2008.