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Bauxite mining and alumina refining company Jamalco will invest US$70.5 million ($11 billion) to extend the life of its mining operations by accessing additional bauxite resources in Manchester, though its plan remains a “sensitive” issue.
The capital expenditure will cover mine development and installation of equipment over three years, ranging from 2025 to 2027.
“Currently, the ownership of land parcels requires Jamalco to obtain sufficient rights before exploration is completed,” stated the Jamalco Technical Report Summary, produced by its parent company, Century Aluminum, which is headquartered in the United States. Century is worth US$662 million, based on its capital as of December 2024.
When operations began decades ago, much of the area was either government-owned or controlled by Jamalco, and local communities were less resistant to bauxite development, according to the company. Today, Jamalco’s primary mining site, SML 130 in southern Manchester, is “approaching depletion”. The refinery intends to shift focus to SML 169 in north Manchester, which includes properties owned by the Government of Jamaica and private citizens.
Mining on sensitive lands is one of several challenges that have arisen between bauxite companies and local communities.
Century inherited these issues when it acquired its interest in Jamalco from the financially distressed Noble Group in May 2023 for US$1. Century now holds a 55 per cent joint venture interest in Jamalco, while the Government of Jamaica owns the remaining 45 per cent through Clarendon Alumina Partners.
For over 50 years, Jamalco has extracted and processed bauxite using available resources, bypassing the traditional approach of maintaining large mineral reserve inventories. Despite being the largest bauxite and alumina operation in Jamaica, the company has not been operating at full capacity but generally above 80 per cent. Jamalco majority feeds smelters owned by Century around the world. Century itself is 43 per cent owned by Swiss company Glencore.
The planned investment will span three years and will support consistent bauxite supply to the refinery, which has been operating below its capacity.
“Financial models estimate a US$70.5 million capital investment between 2025 and 2027, ensuring a 12-year mine life with technical and financial feasibility,” stated the technical summary that was distributed to shareholders.
Jamalco’s refinery has the capacity to produce 1.4 million metric tonnes of alumina annually, requiring some 2.5 tonnes of bauxite to produce each tonne of alumina. “Currently, 90 per cent of Jamalco’s bauxite supply comes from the [existing] SML 130, but with its depletion, the focus must shift towards utilizing SML 169 North Manchester bauxites,” the report noted.
Jamalco operates under two Special Mining Leases: SML 130, which expires in 2031, and SML 169, which extends to 2043. It also holds a Special Exclusive Prospecting Licence covering 96 square kilometres in the parish of St Catherine, potentially enabling further exploration, the annual report stated released this month. Its main complex and base of the alumina plant is located at Halse Hall in Clarendon.
The investment supports Jamalco’s ‘Project Restore’, aimed at increasing the refinery’s feed. SML 130 spans 220.9 km², while SML 169 spans 74 km². Although SML 169 presents challenges due to differences in bauxite composition, these can be mitigated through blending.
“Resources at SML 130 remain processable with existing refinery technology, while SML 169 resources can be blended into the feed,” the report noted.
Jamalco’s history of resource management relies on grade control sampling and the avoidance large reserve inventories. It utilises auger drilling for exploration, with assays, or testing of the ore to determine composition and quality, conducted at its certified laboratory in Clarendon. Through Project Restore, Jamalco aims to overcome its resource constraints.
During the financial year ending December 2024, Century spent US$82.3 million on capital expenditures and anticipates spending US$70 to US$80 million in 2025.
“This amount includes US$40 million, representing investments in our Jamalco facility,” Century reported.
The financial results for Jamalco were not immediately disclosed for the 2024 year. For the year ending December 2023, Jamalco contributed US$150.3 million to Century’s total revenues but recorded a loss of US$41.1 million.
Century’s 2024 financial report cited a “material weakness” related to internal controls, as identified by auditor Deloitte & Touche LLP. Despite this, the auditors determined the financial statements as fair with no qualification, stating: “These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements.”
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