By Mark Ramotar
Guyana Chronicle
May 30, 2001

PRIME Minister Sam Hinds yesterday confirmed that the government was strongly considering accepting a proposal from the American Alcoa firm to take over the operations of the Berbice Mining Company (Bermine).

In a comment, he said the government is of the firm view that the Alcoa proposals are an improvement on what has been happening to the bauxite industry so far.

According to him, the Alcoa proposals present opportunities for an improvement on what has been happening, referring to Bermine and the Aroaima operations (jointly owned by Alcoa and the Guyana Government).

The Prime Minister, who has responsibility over the bauxite industry, explained the situation in light of a page one article in yesterday's Stabroek News newspaper, which said rumours of a government decision to accept a proposal from Aloca to take over the operations of Bermine had the workers at Everton and Kwakwani uneasy.

According to the report, the National Mine Workers Union and the Guyana Bauxite and General Workers Union which represent the workers at Everton have planned a rally for today in New Amsterdam.

The rally will be held after a march from Everton to sensitise the workers and the public about the issue, the newspaper said.

Mr. Hinds said Alcoa earlier this year put a formal proposal to the government for the merger of a restructured Reynolds ABC (which it took over), where starting from the assumption that Bermine had certain types of problems and certain advantages, and Reynolds ABC had certain types of problems and certain advantages, that one could put together the two operations and hopefully have a viable forum.

He said that plan of the merged company would essentially have no need for the Everton site and operation.

"So on the one hand, some 260 to 270 workers would be out of work there but on the other hand that site and the workers there would be available for other economic activity," he said.

"...and hopefully we would have a new company that would be more viable, which would be a merger of the Aroaima site and the Kwakwani site," he added.

Mr. Hinds also mentioned the ongoing dialogue process between President Bharrat Jagdeo and Opposition Leader Desmond Hoyte, during which they have agreed to, and set up, a committee to deal with the resuscitation of the ailing bauxite industry.

This committee is tasked with looking at the options available for the long-term survival and viability of the industry, including the proposal from Alcoa.

"We indicated to Alcoa that we accepted their ideas in principle overall but at the same time this dialogue came on board and our hope is that the dialogue committee would have seen and share with us the benefits of proceeding with this (proposal) but from all reports this may not be so...," the Prime Minister commented.

In a background to the issue, he pointed out that the bauxite industry, sadly, has been in problems since around 1976.

He said that from the nation's records, one would be able to show that it was supported by the government since then to a tune of some US$400M, so that the local bauxite sector has been basically in a loss-making position.

"In fact, a number of different studies would indicate that we've probably been receiving in sales only 70 per cent of the total cost which should be recognised in producing the product," Mr. Hinds said.

"We would note too that before we came into government there was disagreement with the various multilateral institutions which required Linmine and Bermine be taken to privatisation."

He noted that the government had advertised on two occasions and had gone through the formal process of privatisation.

He said on both occasions the government did not get any real substantial offers and so those proposals were not seriously considered.

Subsequent to the last of such offer, about a year ago, Mr. Hinds said the government has accepted that it will go into direct negotiations with various groups.

One of those groups was the Reynols ABC group, which had put a proposal, from the inception, of a merger of the ABC operations with the Bermine operation.

He said the government then decided to put that into the privatisation process and around mid-last year Reynols ABC started to look at putting some combination of Bermine and Aroaima.

Mr. Hinds also noted that earlier this year, the due-diligence assessment was done by Aroaima/ABC on the Bermine operations.

He pointed out that along the way, Alcoa took over Reynolds ABC and so a subsequent proposal to the government came from Alcoa.