Government now looking at Alpart to drive economic growth
The Alpart alumina plant in St Elizabeth
FOCUS has now shifted towards the reopened Alpart alumina plant in St Elizabeth to drive the Jamaican economy in the mining sector, following a slowed growth rate since the start of the year.
Previously, the country looked to industries such as agriculture, electricity and water supply as the main areas to strengthen Jamaica’s output. But yesterday the Planning Institute of Jamaica (PIOJ) removed the agricultural sector from the list of growth areas, noting that the potential impact of adverse weather conditions on domestic production will prove to be a risk to the economy.
“It is anticipated that for the remainder of the fiscal year, which ends March 31, 2018, there will be a strengthening in the pace of growth, resulting in a fiscal year outturn within the range of two to three per cent. This forecast is predicated on the resumption of productive activity at the Alpart alumina plant, which is anticipated to drive growth in excess of 20 per cent in the mining and quarrying industry for fiscal year 2017/18,” PIOJ Director General Wayne Henry said.
Henry reported an estimated 0.3 per cent increase in economic growth for the April to June quarter, the second consecutive quarter of slowed growth the country has seen, attributable to weather-related shocks which affected the island earlier in the year.
According to the PIOJ director general, weather conditions associated with flooding negatively impacted the performances of Jamaica’s agriculture, forestry and fishing; mining and quarrying; and electricity and water supply industries.
“The preliminary cost of damage and loss related to the March to June rainfall events was estimated at $4.0 billion or 0.2 per cent of Gross Domestic Product (GDP). Over 80.0 per cent ($3.3 billion) of the total was public cost, that is, damage and loss to public infrastructure,” Henry said yesterday at a PIOJ press briefing on the economy for April to June 2017.
“Damage and losses incurred were concentrated in the infrastructure sector, which accounted for 77.6 per cent of the total, while the productive sector accounted for 20.1 per cent of the total. The main area of damage in the goods-producing industry was agriculture, forestry and fishing, totalling $814.9 million,” he said.
Infrastructure-related industries were the main areas impacted, specifically roads and bridges, which totalled $3.0 billion or 75.0 per cent of the total, as well as water supply and sanitation with losses of $105.8 million or 2.6 per cent of the total.
Consequently, short-term growth is expected to be driven by the mining and quarrying industry; construction; hotels and restaurants; and electricity and water supply.
The PIOJ listed the primary risks to growth as the potential impact of drought and hurricane conditions on domestic production; slower than anticipated growth in the global economy; as well as the potential negative impact of oil price shocks due to adverse weather conditions such as Hurricane Harvey, which resulted in the controlled shutdown of refineries in the US Gulf.
Further potential for growth, the PIOJ boss said, could be realised from the commencement of the construction of a two-million metric tonne Alumina refinery at the Alpart plant, with estimated capital expenditure of approximately US$1.0 billion. Construction is tentatively scheduled to start in the final quarter of fiscal year 2017/18.