Corbin seeks to have Parliament discuss OMAI sale
--warns of implications for Guyana's bauxite
Kaieteur News
December 22, 2006
Opposition Leader Robert Corbin yesterday moved to have Parliament adjourned to discuss the recent announcement by IAMGOLD to sell its stake in Omai Bauxite Mining Inc. (OMBI) and Omai Services Inc. to China's Bosai Minerals Group for US$46 million.
However, Speaker of the National Assembly, Ralph Ramkarran, said that he would permit the motion only if Corbin utilises a three-day mechanism that was permitted under the new Standing Order.
Had the Speaker granted Corbin's request, Parliament would have adjourned at 16:00hrs to discuss the sale of the bauxite company. As it stands, Corbin's motion will be considered within three days, but, as the government side indicated, Parliament will not sit until next year.
During the Speaker's deliberations, Prime Minister Samuel Hinds said that the government, as a minority shareholder, had not been officially notified of the sale, in keeping with the shareholders' agreement.
He said that despite reports in the media, the sale is not a done deal as far as government was concerned, since it has to be given 30 days to respond to a notification, and a further 60 days to file another response, if necessary.
Corbin told reporters, following the adjournment, that the deal could have grave implications for Guyana's bauxite industry, which has been the mainstay of economic activity in Linden.
He pointed out that OMAI was now going to be sold to a Chinese company that has had to compete with Guyana's bauxite on the world market.
He said that the new owners could opt to reduce the grade of the local bauxite, or, in a worst case scenario, shut down the industry.
“Given these scenarios, I thought it in the public's interest to have the Parliament discuss the sale of the bauxite company,” Corbin stated.
OMAI Bauxite Mining Inc. was incorporated in December 2004 in a 70/30 percentage partnership agreement between Cambior and the Government of Guyana.
During Parliamentary proceedings, Corbin, in seeking to have the issue discussed, stated that the PNCR has always questioned the government's decision to sell its share to Cambior, since the party believes that sale was done through an exchange of letters.
“This new sale has opened Guyana to the vagaries of the international market. This matter ought to be dealt with as a matter of urgent public importance.”
The Speaker said that, unfortunately, he could not allow the motion as presented, and gave Corbin an opportunity to present the motion in three days, which was accepted.
According to a press statement issued by Iamgold, under the terms of agreement with Bosai Minerals, the effective date of the transaction will be December 31, 2006.
Subsequent to a confirmatory review of the assets by Bosai Minerals, Iamgold will receive consideration of approximately US$28 million in cash from Bosai Minerals, subject to working capital and other adjustments.
The agreement is contingent on a number of conditions, including receipt of customary approvals from regulatory authorities.
According to the press release, Yuan Zhilun, Managing Director of the Bosai Minerals Group located in CHONGQING, South West China, said that the Guyana bauxite deposit is well known to the industrial minerals industry as a first-class material, and Bosai Minerals is pleased to carry on the tradition.
Last month Iamgold Corporation completed an acquisition agreement of OBMI through a US$3 billion buyout deal with Canadian firm Cambior Inc, which at the time controlled 70 per cent of OMBI assets.
The agreement with Cambior was aimed at boosting Iamgold to a new million ounce gold producer, and for the company to become the world's tenth largest gold producer.
Cambior will continue exploring for gold at its closed mining site at Omai.
Joseph Conway, President and Chief Executive Officer of Iamgold, said that the company is pleased to have reached an agreement for the sale of the bauxite assets.
“The transaction is consistent with our strategy to focus on our core assets. We look forward to working with Bosai Minerals to finalise this transaction,” Conway stated in the press statement.
In July, OMBI suspended its operations for two months, citing the prohibitive cost of production of the high grade Resigned Aluminium Super Calcined (RASC) ore and plummeting prices for this commodity on the world market, largely because China was selling the commodity at a cheaper price.
The steady decline of market prices forced the company to downscale production of this high grade ore from 30,000 tonnes a month to 15,000 tonnes.
A further decision was taken in March of this year to retrench workers to cut back on production cost and become competitive on the international market.
Sixty-one workers have been put on the bread line since the decision was taken.
Bosai Minerals Group owns 16 plants and companies in Chongqing, Guizhou, Tianjin, Guangxi, Hong Kong and Germany.
According to the company's website, there is a high demand for its product in Europe, North America, Japan and India.
Its website states that its output and export volumes of calcined bauxite are tops in China, and the output and export volumes of Brown Fused Alumina is the leader in Asia, and number two in the world.