A Good News Story EDITORIAL
Business December 10, 2004
Stabroek News
December 10, 2004

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For two decades, residents of Linden have watched with despair as what was the pride of their town sank slowly into debt and disrepair. The story of Linden bauxite dates back to 1916 and at one point its output contributed to 60% of world output of RASC, the Cadillac of bauxite which fetches a premium price and can only be found in China, Brazil and the same mining town in Guyana.

How Guyana lost its dominance over the market has been well trawled over by commentators. That's history. On Wednesday evening Cambior signed an agreement with the government setting up a new company, Omai Bauxite Mining Ltd, that for the first time in decades gives the Linden bauxite industry a real chance of becoming not only sustainable but actually profitable. This is a good news story and the government deserves some credit for seeing this privatisation through.

It is also something of a surprise because the prognosis had been that mining in Linden would go the way of the coal pits in Northern England, or the steel mills of Pittsburgh, taken over by cheaper producers leaving behind shattered communities with chronic unemployment.

The EU funded Linden Economic Advancement Programme is intended to address the social dislocation by diversifying the Region Ten economy and encouraging small entrepreneurs. But this would never bring the kinds of jobs many in the area have skills to fill.

As the National Development Strategy noted, "The highly mechanised and capital intensive nature of the (mining) sector has resulted in a concomitant demand for high levels of technical and industrial skills. The bauxite industry has been well known for producing large pools of skilled workers."

Cambior's VP Rejean Gourde has taken a chance in Linden given that the company has no experience in the bauxite sector. What they are bringing are the key ingredients for any successful business: access to markets, access to capital and very importantly, good management. Some of the changes are basic common sense: stockpiling supplies so they are ready for ships coming up the Demerara thus avoiding demurrage costs; and stockpiling supplies in Europe and the US for smaller customers.

Such strategies have helped them grab market share which became available after Brazil shut down production. And because of Chinese price adjustments Omai is set to take a 20% share of the world market next year. If they reach their target of 300,000 MT in the next few years some 800 workers could be employed and this would go a long way in bringing economic stability to the community.

A few years ago the Linden bauxite story appeared to be on its last sad page. Instead it has come full circle with a private company with big plans now in charge of operations. Let us hope that there are many happy chapters ahead.