Norris McDonald | Jamaica’s bauxite policy, RUSAL’s perks, and Manley’s fight for tax justice!

IN 2024, RUSAL Engineering & Tech Centre, LLC, a subsidiary of the Russian-owned RUSAL corporation, filed a patent in the United States for a method to extract scandium from bauxite red mud and alumina wastes. Scandium, an extremely rare and valuable alloy used in the aerospace industry, can be extracted at near 100 per cent purity and commands prices, in 2024, between US$3,500 to US$4,800 per kilogram.

Once seen as an environmental hazard, bauxite red mud could now become an economic goldmine, with scandium extraction presenting a major opportunity for Jamaica. However, due to the Jamaican government’s abandonment of previous profit-sharing agreements, the country is unlikely to benefit from this potentially lucrative venture.

LEFT BEHIND BY OUR GOVERNMENT

RUSAL’s patent filing marks the culmination of years of technological advancements that have discovered ways to turn bauxite waste into profit. While this discovery is being hailed as a breakthrough for the global aerospace industry, it also underscores the missed opportunities for Jamaica.

The Jamaican government abandoned its bauxite profit-sharing agreements years ago, allowing foreign corporations to operate with impunity. Under these agreements, Jamaica would have earned a fair share of profits generated from the extraction and sale of valuable minerals like scandium and lithium, both of which can now be extracted from bauxite red mud.

The Jamaican government’s reluctance to reinstate these agreements represents a betrayal of the economic sovereignty that Michael Manley fought for in the 1970s. The current administration’s failure to enforce fair tax policies means that Jamaica is losing out on billions of dollars in potential revenue while multinational corporations like RUSAL continue to reap the benefits of Jamaica’s natural resources.

BETRAYAL OF MANLEY’S VISION

In 1972, when Jamaica was grappling with the exploitation of its natural resources by foreign corporations, Michael Manley implemented the famous bauxite levy. This policy required foreign bauxite companies to pay a fair price for the resources they extracted, ensuring that the wealth generated from Jamaica’s land stayed within the country.

Under Manley’s leadership, Jamaica was a leader in resource sovereignty, and his bold stance on economic justice was a powerful signal to the world that the country would no longer allow itself to be treated as a mere source of cheap raw materials.

However, over the years, the Jamaican government has abandoned this vision. The bauxite levy has fallen by an astonishing 92.5 per cent since 1976, from US$2.00 per ton to just US$0.15 in 2025. This reduction in the levy has resulted in a loss of between US$700 million and US$1 billion in revenue since 1990.

In contrast, during the Michael Manley era, the country earned significantly more from its bauxite resources. The current administration’s decision to ease the tax burden on foreign corporations has had devastating consequences for Jamaica’s economy, leaving the country with fewer resources to address its pressing issues, such as rising debt, inflation, and crumbling infrastructure.

RUSAL’S TAX AVOIDANCE CULTURE

RUSAL is no stranger to tax avoidance. The company has been involved in numerous tax evasion schemes in countries like Guinea, Guyana, and Russia. In Guinea, RUSAL owes US$860 million in unpaid taxes and royalties. In Guyana, RUSAL continues to benefit from tax exemptions, while making massive profits. And yet, in Jamaica, the Government continues to offer preferential treatment to this tax-avoiding multinational corporation.

In 2012, the Jamaican Government “eased up” on RUSAL/Windalco, allowing the company to settle its meagre tax debt in instalments. Then, in 2021, the government permitted RUSAL to settle a US$35 million debt over 30 instalments, but as of 2024, only 45% of the debt has been paid.

Dear friends, it’s clear that foreign corporations are being allowed to evade taxes with little to no repercussions. Meanwhile, even as the government turns a blind eye to these tax avoidance practices, Jamaican Black poor people and the middle-class people ‘suffa unda Babylon,’ bearing the weight of rising debt and increased poverty and social deprivation.

Even the IMF is a surprise critic of corporate tax dodging. In a 2021 report on tax policy, the IMF criticised multinational companies for using complex and often illicit methods to avoid paying taxes in developing nations. The report emphasised that governments should take steps to reduce tax avoidance and recover the revenue necessary for sustainable economic development. Yet, in Jamaica, the Government seems more interested to curry favour with RUSAL than protecting black poor people, the middle class and the country’s financial interests.

RUSAL’S PROFIT VS JAMAICA’S LOSSES

In 2024, RUSAL reported a staggering net profit of US$803 million, a 185 per cent increase from the previous year. However, despite this windfall, Jamaica saw a significant drop in bauxite revenues – US$184 million less than in previous years. This discrepancy raises serious questions about the fairness of the country’s tax policies. If RUSAL can report record profits, why isn’t Jamaica benefiting more from its own resources?

Given RUSAL’s track record of tax avoidance and its significant profits, it is essential for the Jamaican government to open the bauxite contracts to public scrutiny. We need to know how Jamaican can benefit from any use of the environmental hazardous red mud lake and what if any money the country will get from the scandium and Lithium recovery and manufacturing.

We need to know too, if the Government is acting in the best interests of the people or if there are backroom deals made in a pattern of self-enrichment, trust deficiency.

TOWARD TAX JUSTICE AND ECONOMIC PROSPERITY

My dear friends, the Jamaican government’s failure to enforce tax justice is not only allowing foreign corporations to siphon off the country’s wealth, but it is also undermining Jamaica’s economic sovereignty and future. The Government’s refusal to act on tax justice means that the country will have to rely on borrowing to fill the revenue gap, further increasing Jamaica’s debt burden.

The Government must take a stronger stance on tax justice. It must hold foreign corporations accountable for their tax obligations to benefit the people of Jamaica. The time for complacency and backroom deals is over. The future of Jamaica’s economy depends on it.

That’s the bitta truth.

Norris R. McDonald is an author, economic journalist, political analyst, and respiratory therapist. Feedback: columns@gleanerjm.com | miaminorris@yahoo.com