The international bauxite company Alcoa has informed Prime Minister Sam Hinds and the negotiating team from the joint bauxite committee that the future of the Aroaima Bauxite Company (ABC) is bleak.
Stabroek News
August 22, 2001
An Alcoa team headed by Chris Whelan and including Larry Grace and Don Guyer met Dr Clive Thomas, Robeson Benn, Lance Carberry and Odinga Lumumba on Monday at the BIDCO head office in Queenstown, to discuss Alcoa's proposal for the future of ABC, which it jointly owns with the Guyana government, when its reserves of ore run out. The proposal said that this was likely to happen in three years.
Head of the Presidential Secretariat, Dr Roger Luncheon, told reporters at yesterday's post-Cabinet press briefing that the team from Alcoa which met the negotiating team on Monday had indicated the conditions existing at the time it made its proposals for the future of ABC had been overtaken by more "recent and to be honest more dire circumstances."
Dr Luncheon said that the Alcoa team also transmitted this assessment to the Prime Minister. "It does seem that the situation today is not even as good as when the initial offer was made."
Dr Luncheon said that the Alcoa assessment was made available to Prime Minister Sam Hinds who in turn has made it accessible to President Bharrat Jagdeo. He added that after studying the information from Monday's meeting and consulting with the major stakeholders--the management and workers in the Berbice Mining Enterprise--the President and/or possibly Prime Minister, would give the media a comprehensive briefing.
Stabroek News understands that Alcoa has substantial bauxite operations in Africa and its concern about its business here, which was said to be a small drop in the Alcoa ocean, was that the cost of production might not be competitive.
The report of Monday's meeting would be based on Alcoa's forecast of ABC's projected market share, but some members of the team said that they were yet to see the report by the government representatives on the ABC board.
The Alcoa proposal calls for the formation of a new company merging ABC's operations with Bermine's operations at Kwakwani; the closure of Bermine's operations at Everton; the conversion of ABC's US$57 million debt into its equity into the new company, which it would continue to manage; conversion of Bermine's ore reserves at Kwakwani as its equity in the new company; and the reduction of the labour force over four years from 940 to 400. The proposal also provides for the sale of the new company to one that has already been identified by Alcoa.
An alternative proposal by the Bermine Group of employees provides for bridging capital by a New York company--Centrotrade Minerals and Metals Inc--in return for the sole right to market the production at Everton, as well as lease financing arrangements for the acquisition of mining equipment and the provision of management and technical production expertise.
The Bermine group met the negotiating team last month and was expected to conclude a confidentiality agreement before submitting its business plan and other details requested of it.