Aboveboard LINMINE agreement sustaining 1,000 jobs --- Prime Minister
Guyana Chronicle
August 18, 2004
THERE’S nothing abnormal about the government’s agreement with CAMBIOR to assume the management of the Linden Mining Enterprise (LINMINE), Prime Minister Sam Hinds has assured.
His assurance to Lindeners came last week amid veiled charges by the PNCR that the management of LINMINE had been “handed over” to the Omai gold mining company in a hushed, underhand arrangement.
“Nothing abnormal or underhand is happening” in the arrangements between CAMBIOR, Omai’s parent company, and the Government of Guyana, the Government Information Agency (GINA) quoted Mr Hinds as assuring residents of the bauxite mining town.
He said the arrangements are not only aboveboard; they are also enabling LINMINE to operate without government subsidies and provide sustained employment for more than 1,000 people in the bauxite mining community.
In a press statement last Thursday, the opposition PNCR (People’s National Congress Reform) attributed LINMINE’s “decimated” state to “the political spite of the PPP/C administration.” It also accused the administration of handing over the management of LINMINE to Omai “as a reward” for CAMBIOR/Omai’s failure “to mobilise US$30 million in investments” in LINMINE’s operations.
“Now we read that Omai will be given the assets of LINMINE. Is this an outright purchase? What are the terms of the agreement for the disposal of the assets owned by the people of Guyana to Omai,” the PNCR added.
But the Prime Minister, who has responsibility for mining, said in an interview with GINA last week that there’s nothing “abnormal or underhand” in the memorandum of understanding the government has signed with Omai/CAMBIOR over LINMINE.
Mr Hinds said attempts to shift blame for LINMINE’s fortunes cannot detract from the historical fact that Linden has been experiencing problems of varying magnitude since the 1970s. By the early 1990s LINMINE required governmental assistance to support its operations, he noted.
He said the agreement with CAMBIOR was signed in 2002, when “closure threatened the operations” of the bauxite company.
“The bauxite prospects in the country are now looking brighter than they were up to two years ago,” Mr Hinds pointed out.
“Since 2003 stripping and mining at the Omai operations have continued without the assistance of the Treasury.”
Another result of the government’s agreement with CAMBIOR/Omai is that bauxite production by LINMINE in the first half this year exceeded 66,000 tons of calcined bauxite – which was greater than the 62,000 tons produced and sold by LINMINE in all of 2002.
“Prices and performances have been good for both parties,” said the Prime Minister, “so it was natural for the more substantial stripping and mining contract to be entered into.”
The contract settled at a 70/30 per cent shares distribution, with the government holding the greater percentage. Coming at a time when at least US$5M was needed to refurbish LINMINE’s mining equipment, CAMBIOR contributed US$5M in cash for the equipment overhaul and more than US$1M to repair Kiln 14, he said.
A US$10M loan was secured from the insurance company CLICO to be put into the company, and the newly-established Omai Bauxite Company is to realise another US$30M from revenues, he said.
Mr Hinds said that Guyana has to make its bauxite operations competitive to take advantage of prevailing conditions worldwide.