The recent series of articles in The Gleaner, supporting the need for an urgent discussion around an industrial policy for Jamaica, has encouraged a relook at the bauxite/alumina industry. The very nature of the industry demands that the government play a vital role in its transformation.
However, the conversation around Jamaica’s mature bauxite and alumina industry has grown uncharacteristically quiet. Once a vital component of the global aluminium supply chain and a cornerstone of Jamaica’s economy, the sector now faces a critical juncture. For decades, high energy costs, ageing infrastructure, environmental concerns, insufficient investment, and intensifying global competition have eroded its position. Yet, with bold innovation and strategic leadership, the industry can be revitalised to reclaim relevance. Current reserves are estimated to last 35 years at present production rates, but utilising in situ alumina capacities using imported bauxite could extend the industry’s lifespan.
As a former Director of Economics and Statistics at the Jamaica Bauxite Institute (JBI) during the 1980s, I witnessed firsthand the industry’s evolution and challenges.
The 1970s marked the zenith of Jamaica’s bauxite industry, with annual production exceeding 14 million tonnes. Today, exports struggle to reach one million tonnes, primarily from New Day Aluminium’s operations in St Ann, partly constrained by the ageing Gramercy alumina plant in Louisiana. Of the three alumina refineries operating locally, only two – UC Rusal’s Ewarton plant, and the Century Aluminium Co (Jamalco) facility in Clarendon – remain operational, with a combined capacity of just over two million tonnes. The Alpart refinery (1.6 million tonnes), acquired by Chinese firm JISCO in 2016, remains shuttered, casting doubt on its future, despite many announcements about expansion.
This stagnation has diminished the sector’s contribution to fiscal revenues and highlights the urgent need for reform and restructuring in the context of the rapid transformation of the global industry.
1. China’s industrial dominance
China’s rise as the dominant force in aluminium production has redefined the global market over the last thirty years. From contributing less than four per cent of global primary aluminium capacity in 1990, China now accounts for 60 per cent, producing 42 million tonnes annually. This industrial expansion, unparalleled in modern history, has centred on investments in smelting (particularly in regions with low-cost hydropower, such as Yunnan) and alumina processing, largely supported by bauxite imports from Guinea and Indonesia.
Traditional aluminium producers, including the United States and Europe, have shifted focus to high-value niches like aerospace and secondary (recycled) aluminium markets. The US, which once produced 20 per cent of global primary aluminium in 1990, now contributes less than one per cent. These shifts have reduced demand for bauxite from the Caribbean, accelerating the decline of Jamaican exports.
For Jamaica, global realignment presents both challenges and opportunities. However, the island must address inefficiencies, particularly high energy costs, to compete in emerging niche markets.
2. Sustainability imperatives
Sustainability now dominates the agenda of the aluminium industry, driven by concerns over carbon emissions, resource depletion, and waste management. While recycling aluminium consumes only five per cent of the energy required for primary production, traditional smelting remains energy-intensive, consuming 14 MWh per tonne and emitting significant carbon dioxide.
Globally, the industry has embraced greener practices, such as Alcoa’s carbon-free smelting technology and the growing adoption of recycled aluminium, now comprising over 30 per cent of global output. In contrast, Jamaica grapples with its environmental legacy: 75 years of red mud waste totalling over 100 million tonnes. This residue contains valuable minerals such as iron oxides, gallium, titanium oxides, and other rare earth elements, but commercialisation has been hindered by inter alia, high energy costs and inadequate scope for scaling.
3. Geopolitics and trade tensions
Geopolitical tensions, particularly between the US and China, have disrupted aluminium supply chains, creating both risks and opportunities for Jamaica. Chinese ownership of Alpart ties the refinery’s fate to global trade dynamics. Proposed US tariffs on Chinese aluminium could impact Alpart’s modernization, and further sideline Jamaica in the global aluminium market.
One of Jamaica’s most contentious issues is the untapped bauxite reserves in ecologically sensitive areas, and those close to populated areas. Opposition to mining in areas rich in biodiversity and critical water resources, has long raised doubts about the future of investments. While mining interests, community stakeholders, and the government have sought to come an acceptable settlement around the reserves in the Cockpit Country, there is still lingering doubts and uncertainty. This is rooted in the low trust nature of the society.
Overcoming the low trust level in the industry requires:
• Defining legally protected boundaries: Legally enforce boundaries to preserve biodiversity, protect underground water sources, protect the livelihood of people in the communities.
• Community engagement: Build trust through dialogue and equitable benefit-sharing with communities adversely impacted.
• Investment in alternatives: Prioritise reserves or technologies that mitigate environmental harm.
The controversy around bauxite mining in sensitive areas represents more than an environmental challenge – it tests Jamaica’s ability to balance economic development with stewardship of its natural heritage. It is a very difficult problem to resolve.
Energy costs
Energy costs, ranging from $0.25 to $0.36/kWh, remain Jamaica’s Achilles heel, particularly compared to competitors like Brazil ($0.06/kWh). Reducing these costs is essential to restoring competitiveness. This is an issue that goes back to the 1970s, starting with the OPEC embargo of 1973. Despite significant improvements in reducing the energy consumption per tonne of output, Jamaica has been unable to gain significant global competitiveness. As a result, the country’s alumina plants globally operate as swing capacity.
Ageing infrastructure
Decades of underinvestment have left Jamaica’s refining capacity outdated. Modernisation is critical to sustaining the industry.
Jamaica’s red mud deposits, while an environmental burden, present an opportunity for resource extraction and value creation if suitable technologies are adopted to extract the rare earth elements stored in the waste. The recent cutting of rear earth exports (gallium, geranium, and antinomy) to the US by China, in response to US sanctions, may provide a boost for Jamaica to explore opportunities.
Jamaica’s red mud deposits contain valuable minerals, including 40 million tonnes of iron oxides and 6 million tonnes of titanium oxides. Unlocking this potential will require:
• Scaling up extraction technologies through partnerships with global firms.
• Securing green financing for sustainable red mud recovery projects.
1. Transform Jamaica Bauxite Institute
Reimagining the JBI as the Jamaica Minerals Institute would expand its mandate to include research, exploration, and production of minerals such as limestone and rare earth elements. This transformation could also be aimed at positioning Jamaica as a leader in sustainable mining and refining practices.
2. Tackle energy challenges
Reducing energy costs will be challenging, requiring bold initiatives:
• Renewable energy: Further development of solar, wind, and hydroelectric capacity to power the local industry where feasible.
• Toll refining: Partner with low-cost energy producers (e.g., Gulf States) to refine additional Jamaican alumina production, capturing higher value-added revenue.
3. Modernise refining facilities
Upgrades to ageing refineries like Alpart are essential. It is important for the owners (JISCo) to be definitive about the future of the plant. The Jamaican government may have to explore the option of working with other global industry leaders such as Rio Tinto and Norsk Hydro that could inject the necessary capital and expertise.
To thrive in the transformed global aluminium market, Jamaica must continue to adopt a forward-looking strategy:
1. Develop a national minerals strategy: Create a comprehensive roadmap to modernize the sector, diversify mineral production, and integrate sustainability.
2. Incentivise modernisation: Offer tax incentives and subsidies for refinery upgrades and green energy adoption.
3. Foster research and development: Partner with universities and industry leaders to drive innovation particularly in the use of bauxite residues.
4. Enhance community engagement: Build trust through transparent revenue-sharing agreements and community-driven development initiatives. These steps will never be enough for those who are now firmly of the view that the industry should be closed down, they could provide a pathway to a transition until mineable reserves are exhausted.
The global aluminium industry’s evolution echoes the challenges Jamaica faced in the 1970s and 1980s, when external shocks forced innovation and structural change. Today’s pressures – China’s dominance, sustainability demands, and geopolitical tensions – require equally bold responses.
By embracing innovation, modernising infrastructure, and resolving contentious issues like mining in the Cockpit Country, Jamaica can reclaim its place in the aluminium value chain while balancing economic growth with environmental preservation.
This pivotal moment demands visionary leadership and decisive action to ensure the industry remains a vital contributor to Jamaica’s economic future.
Wesley Hughes, is economist/partner at HighStar Consulting Ltd. He is the former financial secretary of Jamaica, and former director-general of the PIOJ. Send feedback to columns@gleanerjm.com [2]