Jamaica’s bauxite and alumina plant just got sold for US$1!!  Yup, not a million or a billion… ONE degge degge dollar!  

I’m Kalilah Reynolds, financial journalist and educator based in Jamaica.  Let me explain.

Jamalco is a bauxite mining and alumina production plant in Clarendon.  It’s owned jointly by the Government of Jamaica through a company called Clarendon Alumina Production (CAP) and the Noble Group.

The Government owns 45% and the Noble owns 55%. Or I should say “owned” 55% . Because they just sold their stake to an American company called Century Aluminum Company.

Now according to a report from the Gleaner, Century only paid 1 US dollar for the plant. The Gleaner article cited a filing from Century, but said that no explanation was given for the price. However, the article speculates that the one-dollar price tag indicates that Century will absorb Jamalco’s liabilities.

So let’s break down some things. 

See, the Noble Group, which is the one that owned 55% of Jamalco, has had some issues of its own. They brought their stake in the plant from another company in 2014. Afterwards, Noble went through a series of court-mandated restructurings that ended with it splitting into two main entities. 

Noble Group Holdings, the half that included Jamalco, was always operating in the red; meaning it was losing more money than it made every year.

Then on top of that, half of the Jamalco plant was destroyed by fire in 2021.  So production halted for another 12 months. 

And even though the plant was closed and not generating money, money was still being spent on assessments, repairs and other things. So, their pockets were bleeding and they basically decided to call it a loss and sell their stake.

The deal between Noble and Century was supposed to be completed by the end of April. It’s May now so it should be a done deal.

Like I said before, Century Aluminum Company is a US-based company, that has actually operated in Jamaica before. They used to own the St Ann Bauxite Company but left over a decade ago. The company is big in the smelting business – that’s extracting metals from their ore. So having access to Jamalco which mines bauxite and refines alumina is great for their business.

And just to be clear, the government still owns 45% of Jamalco.

So what do you guys think about this news? Bauxite mining still plays an important role in Jamaica’s economy. Do you think this sale is good news, why or why not? Let me know in the comments.