China is continuing to increase and diversify its investments in the Caribbean region.
Confirming trends forecast in recent reports from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), Chinese companies have recently announced major diversified investments in Jamaica and St Lucia.
On July 19 the Jamaican government announced that the Alpart alumina refinery in Jamaica had been sold for US$299m to the Chinese state owned entity the Jiuquan Iron and Steel Company (JISCo) owned by the Jersey-registered but Moscow-operated industrial giant, US Rusal.
According to Jamaica’s Transport and Mining Minister, Mike Henry, JISCo is expected to complete the full takeover of Alpart by November this year and will then begin a first phase of investment of around US$220m in modifying and upgrading the alumina plant to reduce costs and enhance production. Work permits are expected to be issued for around 200 Chinese technicians to achieve this and to undertake other activities.
The Minister also said that the company plans to invest another US$1.5bn to establish an industrial zone co-located with the alumina facility, which is located at Nain, St Elizabeth in the south of Jamaica. The project is expected over a four-year period to create over 3,000 new jobs.
Reflecting the political sensitivity of the continuing increase in the number of Chinese workers on the island, Mr Henry said that JISCo has been asked to provide details of the required job qualifications to ensure that “no Jamaican who is qualified for these…is left out.” He also confirmed that the company would be employing the existing Alpart staff, recruiting most former and available employees and creating around 700 new jobs from the latter part of 2016. He said that the company will be “paying great attention” to protecting the environment. Alpart had been closed from 2009 to 2015.
Rusal acquired a 65% stake in Alpart in 2007 as part of its merger with the alumina assets of Glencore, and acquired the remaining 35% stake in 2011. Alpart, which uses its own local bauxite production as feedstock, was previously reported to have an annual production capacity of 1.65m tonnes of cell-grade alumina.
The acquisition makes JISCo one of the top 10 producers of aluminium in China. The company was established in 1958 as a large-scale iron and steel producer but is now diversified into other areas of heavy engineering and power generation.
The investment is a sign of increasing Chinese interest in Jamaica as an economic base and follows from a wide range of other Chinese projects underway or being discussed.
In July, Jamaica announced that it had decided to use Chinese concessional loans to upgrade the road network on the island. Speaking at a press conference, the Prime Minister, Andrew Holness, said that US$384m in loan funding would come from China’s Exim Bank to construct a new road network in the southeastern and southwestern parts of the country, including in the neglected parish of St Thomas. The Jamaican government said it will raise an additional US$57m of the overall funding required.
Earlier this year the Chinese-built and financed US$730m North-South Highway opened, connecting Kingston to Ocho Rios and reducing coast-to-coast transit time to about an hour. The project gives the China Harbour Engineering Company (CHEC), which built the highway, a 50-year concession to recover its costs from tolls. The company also received land alongside the highway to develop for residential and commercial use.
At the time the Vice President of China Communications Construction Company (CCCC), Ziyu Sun, which owns CHEC, said that it will begin the construction of its regional headquarters in New Kingston later this year.
This is an extract from the Caribbean Council’s leading weekly editorially independent publication, Caribbean Insight, which provides in depth information on current economic, political and commercial developments in the Caribbean and news on events in Europe and the US that affect the region. Business people, academics, and those with a general interest in the Caribbean find it an invaluable tool for developing and maintaining knowledge and providing an insight into political, economic and commercial events in the region.
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