Bauxite committee to submit recommendations shortly
Stabroek News
August 4, 2002
The committee working on detailed proposals for the consolidation of the bauxite industry in the Berbice river is to submit its recommendations to the government shortly.
Sources close to the committee, which was tasked with this issue after submitting its report on the viability of the Berbice Mining Company (Bermine) have told Stabroek News that the report was being finalised. They explained that it was essential that the industry be cash neutral given the continued downward pressure on bauxite prices and the intensity of the competition Guyana faces in the international market. The committee looking at the arrangements includes representatives of the boards of BIDCO, Bermine's parent company, Bermine and government officials.
The sources say that while activity is very low at Bermine's operations at Kwakwani, there is still a lot of exposure work to be done there. They said too that Bermine still has a number of orders for chemical grade bauxite and that it expects to make a shipment of bauxite to Alcoa later this year.
Earlier this year the cancellation of a shipment of bauxite by Alcoa because its vessel was unable to access the turning basin and loading basin in the Berbice river, aggravated the misfortunes of the cash-strapped Bermine. The cancellation of the shipment led to a contraction of the operations at Kwakwani as the contractors there withdrew their equipment as a result of not being paid. Since then BIDCO has negotiated access to the facility for ships picking up bauxite from Bermine with Viceroy Shipping, which has exclusive rights to the turning basin. Meanwhile the committee, which is looking at the severance pay arrangements for workers to be laid off when the rationalisation of the industry is completed, is also moving ahead with its work. Stabroek News understands that the committee moved its meetings to Berbice for more intense consultations with the workers there.
When he met the workers at Bermine earlier this year, President Bharrat Jagdeo undertook to review the severance pay arrangements in place. In a move which the unions in the industry described as undermining the collective bargaining arrangements, President Jagdeo set up a committee of government and bauxite workers' representatives to address the issue.
The President's proposed improved severance arrangements are to include the provision of free land at Kwakwani or, if none is available, on the coastland as well as opportunities for re-training. The rationalization of the industry in the Berbice river involves the merger of Bermine's operations at Kwakwani with those of the other government-owned entity at Aroaima and the closure of the Bermine operations at Everton. As a result of the rationalisation some 800 jobs could be lost including 400 at Kwakwani. Alcoa presented such a plan as a condition for its continued participation in the bauxite operations at Aroaima with the Guyana government. The government favoured the proposal but the unions and the opposition parties objected and Alcoa subsequently sold its share to the government for US$1 and converted the US$69 million owed by Aroaima into preferential shares.
Some Bermine employees and managers made a proposal to take over the company which would save the operations at Everton, diversify the products it produced and identify a strategic investor to fund the rehabilitation of the company's plant. The talks on the proposal with the joint bauxite committee never got underway and the Bermine workers rejected the proposal as they heard of it from various sources.