Lydford Mining Company, a limestone quarrying outfit that operates out of St Ann, has finalised an agreement with Canadian investors that will see the local operations expand its output to five million tonnes a year and bring online a 1.5 million tonne-a-year cement plant by the end of 2009.
The investment is expected to cost US$200 million ($13.8 billion) and is largely geared at fulfilling demand for the products in the US. "An estimated 90 per cent of the products will be exported to North America to satisfy current industry shortages there, including limestone for the desulphurisation of power plant gas emissions," said a press statement issued yesterday.
Lydford, owned by managing director, Leo Cousins, will partner with five individuals that operate a joint trading company in Canada, Cemcorp, which will operate under the name Cement Jamaica Limited in Jamaica to undertake the joint venture.
Cousins told the Observer in an interview yesterday that the Canadians "will put in most of the equity, while a bank will provide funding through a loan for another chunk of the investment".
Armand Nahmiache, president of Cemcorp, told the Observer that around US$60 million ($4.1 billion) will be put up by his interest group, while the rest of the financing will be secured through debt.
The stake that will be held by the individual shareholders at the end of the expansion has not yet been ascertained, however, because the group is currently seeking additional partners to create further synergies.
"We have not yet decided what the ownership percentages will be," said Cousins. "We have invited two other investors including a shipping company from the US, which has about 40 vessels, and a Canadian firm involved in power house generation."
Currently, the 12-year-old operations in Lydford produces on average 150,000 tonnes of limestone a year, and has the capability of putting out another 450,000 tonnes with any additional equipment.
The majority - 99 per cent - of the limestone is supplied to US-based companies, JM Huber, Polar Minerals and Pleus Stauffer with the remainder going to local paint manufacturers, such as Berger Paints and Diamond Paints.
The expanded plant will sell 90 per cent of its total output - 2.5 million tonnes of product by the end of the expansion - to the US market, while the remaining 10 per cent will be delivered to the local market through local hardware distributor, Arc System.
By Cousins’ reckoning the first mile of the seven-mile conveyor that runs from the seaport in Ocho Rios to a point located one mile away from the quarry will be completed by the end of the year, with resuscitation and upgrading of the conveyor occurring in stages starting at the port end.
"We will truck limestone to the other end of the conveyor," he said. Importantly, the crushing equipment and trucks that will increase the capacity of the limestone plant ten-fold, will be delivered and running by mid-2008.
Of the five million tonnes of limestone, one million is expected to be imported while three million tonnes will be needed to produce the 1.5 million tonnes of cement.