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Noranda reports USD 200000 loss

Tuesday, Mar 26, 2013

Jamaica Observer reported that lower prices and higher costs translated into a modest loss for Noranda Jamaica Bauxite Partners.

The St Ann based company's parent reported a USD 200,000 loss from its bauxite segment last year following profits of USD 18.5 million in 2011 and USD 23.8 million the year before.

The mining company sold less volume its sales to Sherwin Alumina fell from 2.5 million in 2011 to 2.3 million last year while volumes to its own alumina refinery fell from 2.64 million tonnes to 2.45 million tonnes over the comparative periods. But lower realized prices resulted in a decrease in external sales of USD 11.8 million. External sale of bauxite USD 51 million in 2012 compared to USD 68 million in 2011, suggesting an 18% decline in the price of the raw ore.

Ms Pansy Johnson president of Noranda Jamaica Bauxite Partners said that "It is not going to get back to levels which will make alumina companies comfortable. It might happen next year but for companies to survive 2013 "they will have to manage their cash really well.”

Sherwin took approximately 47% of the bauxite export from St Ann, pursuant to a contract that ran through 2012. Noranda entered a new contract with Sherwin that extends through 2017. Total cost of sales in the Bauxite segment was USD 124.3 million during the year ended December 31st 2012 compared to USD 128.6 million during the year before.

The Aluminium producers said that the decrease in cost of sales was primarily due to a decrease in sales volume, partially offset by increases in reclamation costs, operating supplies, demurrage and compensation costs.

Noranda plans to extend its harbor dredging project, which consists principally of harbor dredging and focuses on further reducing costs and providing greater flexibility for shipping activities at its Discovery Bay pier from USD 11 million to USD 20 million.

The company said that we expect to substantially complete the project by the end of 2013. The project follows on a USD 6 million investment that raised the pier's capacity from 4.5 million tonnes to 5.4 million tonnes a year in early 2011.

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