The mining sector in Jamaica is having a hard time of it, with COVID-19 protocols disrupting production targets and the Jamalco plant going off line due to a horrendous fire in August of this year.

For decades, alumina mining was a major driver of the economy, attracting foreign investment from companies like Alcoa, Jiuquan Iron and Steel Company, Rusal and Noranda.

In 2018, Jamaica’s total bauxite exports were 10 million tons, a 26.5 per cent jump on the previous year and the first time it registered an increase since 2014. The year 2018 also saw Jamaica exporting 2.57 million tons of bauxite to the United States, a marginal fall from the 2.59 million tons exported in the prior year.

Minister of Transport and Mining Robert Montague, speaking that year on mining’s importance to the Jamaican economy, said: “Today, mining is the principal growth engine for Jamaica’s drive to prosperity. It contributes over 50 per cent of the economy’s growth representing 2.7 per cent of our gross domestic product in 2018, up from 2.1 per cent in 2017, employs 3,500 people and earned US$1.2 billion in 2018.”

Since then, mining has pushed on, becoming yet again a major contributor to the economy. Just before and during the pandemic it has done the heavy lifting as far as foreign exchange earnings are concerned.

Speaking in the 2021-22 Sectoral Debate in Parliament in May of this year, Montague declared that in 2019, mining and quarrying accounted for 51 of Jamaica’s domestic export earnings and that, in 2020, the sector was the country’s main earner of foreign exchange when the COVID-19 pandemic gripped the world.

“There are approximately 490 licensed mining operations in Jamaica. This contributes to approximately three per cent of our GDP and earned the most foreign exchange for the country in 2020,” declared Montague.

According to Trading Economics, revenues from mining in Jamaica decreased to US$3.58 billion in the second quarter of 2021 from US$3.72 billion in the first quarter of 2021.

The Statistical Institute of Jamaica (STATIN) has announced that for October 2021, output prices for producers in the mining and quarrying industry decreased by 2.4 per cent.

At a time when the productive sector needs to be firing on all cylinders, mining has stalled due to measures to contain the COVID-19 virus and the fire at the Jamalco refinery in Clarendon which, as a result, has spelt a loss of US$500,000 a day.

Dr Wayne Henry, director general of the Planning Institute of Jamaica, notes the fall off of the sector and the challenges it faces while COVID-19 remains ongoing. This year alone, the sector has seen a 30 per cent decline and that is expected to increase by a further 10 per cent in 2022.

Getting the Jamalco facility back to just half its capacity level next year is expected to cost around J$15 billion.

The one piece of good news is that the Government’s tussle with the bauxite/alumina companies to return to paying the Bauxite Levy, which goes into the Capital Development Fund, is over and deposits will resume, thus providing the sector with a modicum of financial relief.