Business

JISCO starts US$1-b spend in Jamaica this week

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Monday, October 09, 2017

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China's Jiuquan Irons & Steel (Group) Company Limited (JISCO) is to commence a US$1-billion spend this week in Jamaica, based on new bilateral agreements with the Government, which the Administration believes should boost local economic growth and job creation.

Making the disclosure on Friday in an interview with the Jamaica Observer, Transport and Mining Minister Mike Henry noted that it is already a done deal.

“It's ready now and they don't need any more permission,” a very pleased Henry said, noting that final approval from the Chinese authorities was obtained during his September visit to Beijing with a team of local experts and professionals.

Henry confirmed that during his visit he signed an Establishment Agreement, a Land Use and Agency Agreement and a Fiscal Regime Agreement with JISCO's Chairman Chen Chunming in Jiayguan.

The agreements were already confirmed in the Government's Cabinet Decision Number 33/17 dated September 4, 2017.

“This billion is a spend that starts tomorrow. That is what I left China with: An agreement for unlocking US$1 billion in investments, now,” Henry stated.

“They don't have to go back to China, and say, 'Can I get the money?' And it is not a loan, it is an investment in expanding their involvement in Jamaica,” he explained.

The non-binding agreements outline the terms and conditions established by the Government of Jamaica for JISCO's ownership, operation and build out of Alpart.

The State-owned Assets Supervision and Administration Commission of Gansu Provincial government, which owns JISCO, as noted that both China's national Government and the Gansu provincial government fully supported JISCO's acquisition of Alpart.

He said that they were particularly pleased with the additional investments which would optimise Alpart's value to JISCO and its contribution to the Jamaican economy.

The agreements formally unlocked the inflow of at least an additional US$1 billion in investments and projected creation of a further 800 direct high-paying jobs, primarily for people in St Elizabeth and Manchester over the next two years. Indirectly, an additional 8,000 people will be employed as a result of other investments resulting from the agreements.

Most notable is a US$2.5-billion investment proposed by JISCO in an industrial park and special economic zone, which could create an additional 2,250 direct jobs and over 20,000 indirect jobs, Henry pointed out, adding that this is premised on interests expressed by other Chinese companies which may establish businesses within the park and the economic zone. jamaican companies are being sought for joint venture projects with chinese companies within the industrial park.

The industrial park is to be constructed on 25.4 kilometres of land. However, the initial phase would cover five kilometres to be developed by 2023, after which work on the other 20 kilometres is expected to last another seven to eight years.

The park would facilitate six main functions — processing and manufacturing, with emphasis on exports; modern logistics; mechandise trade; research and development, focusing on technological innovations; professional services; and urban support.

Urban support is understood to be related to JISCO's agreement with a jamaican government proposal for projects to support community development in Jamaica, and one definite area of interest is the introduction of modern agriculture and advanced irrigation technology to communities in St Elizabeth.

Other projects being contemplated include the construction of an alumina plant with a two million-tonne annual capacity, equipped with a captive power plant and the reconstruction of Port Kaiser, as well as the introduction of modern agriculture and advanced irrigation technology to the area.

Expenditure of the initial US$1 billion ($129 billion) will include a US$400-million upgrade of the energy plant at Alpart.

According to Henry, JISCO supports environmentally clean energy for Alpart and is committed to the use of LNG with the construction of a 230 megawatt plant to replace the current one which has failed to perform satisfactorily, particularly because of its outdated technology and limited improvements since construction 45 years ago.

He said that the visit was the culmination of a process which started in 2016 and, most recently, resulted in the official reopening of JISCO's Alpart refinery after nearly a decade of closure.

JISCO is one of China's top 500 enterprises and is the largest iron and steel business in the north-west region of China. Although primarily involved in steel, the company also engages in a wide range of activities including: wine production, real estate development, construction, brewing, and farming. It also operates insurance and travel agencies, as well as hotels, hospitals and theatres.

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