Opposition rubbishes explanation for granting UC Rusal waiver
DESPITE DRASTIC improvements in conditions for profit making such as declining oil prices, Jamaica has granted a full bauxite levy waiver to Windalco, a decision one opposition parliamentarian has labelled “scandalous”.
But the Government is maintaining that it was either that concession or a flirtation with the risk of plant closure and job losses.
The disclosure was made on Tuesday in the House of Representatives in answers Transport and Mining Minister Mike Henry gave to questions tabled by his opposition counterpart, Phillip Paulwell.
PAULWELL SHOCKED
Paulwell expressed shock after reading the concession agreement that the Government signed last July with UC Rusal, the Russian company that operates Windalco, which comprises two plants – Ewarton and Kirkvine.
In 2013, in the face of rising oil costs and falling prices for metal, the then Portia Simpson Miller administration entered into an agreement with UC Rusal that saw a waiver of the bauxite levy for 2013-2014.
The agreement would cease, however, if the price of oil fell below US$80 for three consecutive months and if there were improvements in the London Metal Exchange Price (LMEP) for aluminium.
An extension deal was signed in 2014 but with improved conditions. There was only a waiver of 50 per cent off the levy. The so-called Further Bauxite Levy Concession Agreement expired in March 2016. In July 2016, it was extended to March 2018, but this time amended to give a full bauxite waiver even though the price of oil fell dramatically and the London Metal Exchange price improved.
In 2013 when the deal was first struck, oil was costing over US$90 per barrel. In July last year, it was less than US$40.