Stabroek News
July 1, 2001

Alcoa has demanded a "direct response" from the Guyana government to its concept paper, warning that if it did not receive a positive response - at least in principle - to the major elements of that paper, it would no longer support the proposal.

A major element of the proposal is the conversion of the US$57 million debt owed by Aroaima Bauxite Company, managed by Alcoa but jointly owned by Alcoa and the Guyana government.

Yesterday's letter constituted a reply to a letter from the Joint Bauxite Committee informing the company that a negotiating team had been set up and that it would soon be notified of a proposed timetable for discussions, additional submissions and other related matters. The negotiating team was mandated to initiate discussions with despatch with Alcoa and the Bermine Group of Employees/Centrotrade Minerals and Metals/strategic investor on their proposals for the continued operation of the Berbice Mining Company (Bermine) operations at Everton and Kwakwani.

Stabroek News has learnt that a second letter inviting the groups to preliminary meetings towards the end of next week was in the process of being dispatched.

"That is fine from a Committee process perspective. However, Alcoa requires a direct response, at least in principle, in respect to the major elements outlined in our proposal," the letter from Alcoa's Pittsburgh USA office, signed by Chris Whelan, the company's corporate development manager said.

Whelan reminded the committee that it had originally requested a response by May 31, but had "extended that deadline by one month in order to allow the committee to consider the situation in more detail."

"In the absence of any such answers presented in the positive, Alcoa will withdraw any support for the proposal," Whelan wrote. Contacted by the Stabroek News, Prime Minister Sam Hinds, said that he understood that the negotiating team was seeking a meeting with President Jagdeo and Hoyte. But he explained that because of the tenor of the closure of the Budget debate on Friday he was hopeful that whatever was decided would be as result of a consensus.

He said too that it was important that both parties could start building common experiences and that the Alcoa proposal was as good a place as any to start.

Hinds noted that the process of believing that both parties had the interest of the nation at heart even though they were coming from different positions and experiences was important. He said that the sharing of common experiences was a process and he was hopeful that as a country we were now on that road.

This newspaper was unable to contact Prof Clive Thomas and Robeson Benn, co-chairs of the negotiation team for a comment on Alcoa's response but was able to reach the other members of the team, Lance Carberry and Odinga Lumumba.

Carberry said the committee would have to consider the response and Lumumba called the demand unusual and complex.

Lincoln Lewis, general secretary of the Guyana Bauxite and General Workers Union, one of the unions representing the Bermine employees, found the letter extraordinary. He told Stabroek News that the position being pushed by Alcoa was dividing this country, and confirmed the allegation that multinational companies set nations against themselves in order to protect their interests.

Lewis blamed the government's posture towards Alcoa as providing the latitude for the tenor of its response, adding that it was no longer an issue about whether the Bermine Group or some other company took over Bermine, but about our sovereignty.

The government had expressed a preference for the Alcoa proposal with the Prime Minister explaining that it presented the opportunity for changing the experience of this country. He called the proposal a chance for getting half a loaf rather than no loaf.

"If President Bharrat Jagdeo and Prime Minister Sam Hinds cannot see this as a diktat coming from a multinational corporation to a sovereign country of which they are the leaders, then it will be important for us as Guyanese reconsider our mandate to them," Lewis said.

The negotiating team was named by President Bharrat Jagdeo and PNC/R leader, Desmond Hoyte after they had received and considered the report of the committee on the Alcoa Concept Paper.

The bauxite committee had, as part of its mandate, an evaluation of the Alcoa proposal, for which the government had expressed an interest and any other viable, practical option once it did not burden the treasury.

The decision to have the team enter into negotiations was based on its evaluation of their proposals which it submitted to the two leaders on June 9. The report contained two sets of recommendations one submitted by a group led by Prof Thomas and the other by a group led by Benn.

The Alcoa proposal provides for the immediate closure of the Bermine operations at Everton, resulting in the loss of 270 jobs and the merger of the Bermine operations at Kwakwani with the Alcoa-Government of Guyana venture at Aroaima with assurances of a sufficient reserve to guarantee a project life of 15 years.

It would also capitalise the US$57 million debt owed by Aroaima, pay royalties and taxes and provide for Alcoa to continue its management of the restructured company.

The proposal by the employees' group would see CTMM providing working capital to rehabilitate the kiln at Everton to allow for the production of abrasive grade bauxite - up to 70,000 tonnes a year - and give it the right to market and sell all of the company's products. It would also provide the technical/managerial skills required to beef up the operations at Everton.

The proposal requires the government to turn over its shares to the employees and for the new company to raise its own capital. It will pay royalty, harbour dues and the relevant taxes on its operations.

Meanwhile, Stabroek News understands that the joint bauxite committee is to visit the Linden community next week for talks with workers of the Linden Mining Enterprise and members of the Linden community. It understands that the visits have been scheduled for Tuesday and Wednesday.

Sources told this newspaper that the joint committee had already had discussions with the Board of Directors and the management of Linmine as well as with the union representing the workers there.

The discussions with the Linden community would include plans for diversifying the economic activity of the area so as to ensure the economic viability of the Linden area.

The joint bauxite committee was given a three-month time frame for the completion of its report but was asked to give priority considerations to the Alcoa proposal and to submit a report within a month of its being established in mid-May.