Stabroek News
May 7, 2001

The Guyana government is studying a report and proposal from Alcoa/Reynolds that would merge the operations of the Berbice Mining Company and Aroaima Mining Company.

Stabroek News understands that the proposal, to which the government must respond by May 16, calls for the merger of Bermine and Aroaima and the closure of the Everton operations. In preparation for this arrangement, a number of the management staff of the local company would be let go. Among those slated for the axe, informed sources told this newspaper, was the Chief Executive Officer, John Lewis, who is at present out of the country on company business, and who would return to the Bauxite Industry Development Company (BIDCO).

Prime Sam Hinds contacted by the Stabroek News yesterday, denied any knowledge of plans to remove some management staffers but said that he was aware that at the level of the Bermine board there was some dissension about how things were with the company and how they could be.

While the Prime Minister said that the government was studying the proposal, this newspaper was informed that some Bermine staffers had been told since May 2 that the company was in the process of restructuring.

The report and proposal was put to the government, Stabroek News understands, at a meeting with President Bharrat Jagdeo last Thursday, and that present at the meeting were representatives from Alcoa/Reynolds and BIDCO.

The report, according to Prime Minister Hinds, pointed among other things to the challenges of running a profitable bauxite operation in Guyana.

Hinds told this newspaper that the government was studying the proposal in the context of the Bermine's management's request for an infusion of US$5.6 million and the need of Linmine for an infusion of US$6-8 million in addition to another US$3-4 million to support the supply of electricity and water to the Linden area.

The report was compiled following a detailed study of the Bermine operations at Everton and Kwakwani by Alcoa/Reynolds.

Government has been trying to attract strategic partners for both Linmine and Bermine. At its last attempt, only Reynolds, before being taken over by Alcoa, expressed an interest in Bermine.

Government has a 50 per cent stake in Aroaima which since it began operations has not paid a dividend. However, under its expatriate management, Stabroek News understands, the company has run up losses in excess of US$40 million, half of which Alcoa/Reynolds is pressing the government to assume or to provide resources in lieu of cash.

The Alcoa/Reynolds lease is coming to an end, and the merger move is intended to clinch access to the Bermine resources.

Last year, the Bermine management had identified another company as a strategic partner, but their proposals came after the deadline set by the Government for the expression of interest.

The bauxite industry has been in the doldrums for a number of years, with the debilitating effects most visible in the Linden area.

When President Jagdeo met with PNC/REFORM leader, Desmond Hoyte a fortnight ago, they had agreed that a committee would be set up to examine proposals for the resuscitation of the bauxite industry. Stabroek News understands that Hoyte was not apprised of the May 3 meeting but that the Alcoa/Reynolds report is one of the documents which would be put before the Committee.

The establishment of the bauxite committee was one of the decisions emerging from the dialogue process between Jagdeo and Hoyte with the objective of cooperating in the development and prosperity of Guyana.

The composition of the bauxite committee along with a number of others the two leaders had agreed to, is to be determined in meetings between PNC/REFORM Chairman Robert Corbin and Parliamentary Affairs Minister Reepu Daman Persaud.

They are supposed to submit their report to the two leaders on or before Tuesday.