Noranda Pays Part Of Debt To Government At Signing Of New Agreement

The minority partner in Noranda Bauxite Partners has paid to Government nearly one billion dollars as a part of the debt it owes to Jamaica. The payment represents about two-fifths of what is owed.

Mining Minister Robert Montague made this known today as he gave more details of a new agreement between Jamaica and New Day, which owns 49 percent of the company. The Jamaican Government owns the remaining 51%.

In a statement to Parliament Tuesday afternoon, September 18, Mr Montague outlined specifics of the signing that was covered by the press earlier this month.

A central pillar of the agreement is the profit-sharing arrangement where both partners benefit from what is stated as any ‘financial recovery’ in the performance of the mining and refining operations of the entity.

Mr Montague said: “We believe that this new arrangement will earn the country more in US Dollars compared to the traditional levy system. Under the agreement, the GOJ will earn 17.33% earnings before interest, taxes, depreciation and amortisation (EBIDTA), or US$1.50 per tonne of dried bauxite shipped; whichever is greater.”

He said the Royalty payments of US$0.50 (50 US cents) per dry metric tonne of ore shipped will also remain in effect.

He disclosed that at signing, “New Day paid to the GOJ US$7 million (approximately J$959 Million). This represents a significant part of the US$17 Million (approximately J$2.239 Billion) owed, the rest of which is to be paid over a thirty–six (36) month period. These represent legacy payments as well as royalties.”

Mr Montague said the Government will continue to insist that “when we are owed that those payments are quickly settled. The bauxite belongs to the Jamaican People and not the Government. Therefore, if the company makes no profit, then the levy on bauxite must be paid.”

 

He said although, not a part of the Novation agreement, the Government Team requested that the outstanding land titling for persons who have been resettled be dealt with. As at June 2018, there were 1,140 titles outstanding.

By Franklin McKnight

 

 

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