BOSAI now owns 70 percent of Omai Bauxite Mining
...new economic ventures will
continue to be promoted in Linden
Kaieteur News
May 7, 2007
Prime Minister Samuel Hinds officially welcomed the Chinese firm, BOSAI Minerals, to the local mining sector, having acquired 70 percent shares in Omai Bauxite Mining Inc. (OBMI) through a US$46 million share purchase agreement with IAMGOLD, a Canadian firm.
Last December, IAMGOLD had indicated to the government that it had entered into a conditional share and purchase agreement with BOSAI, through which the Chinese-based company would acquire majority interest and shares of OBMI.
On February 12, Government and BOSAI signed an agreement to allow BOSAI to buy the shares from OBMI.
The deal with BOSAI, however, is subjected to the conditions of the shareholders' agreement between Cambior, the National Industrial and Commercial Investments Limited (NICIL) and OBMI, whereas NICIL represents the government's 30 percent stake in OBMI.
Speaking at the welcoming ceremony at the Watooka Complex, Mackenzie, Linden , the Prime Minister said, “Together, as partners, we have a chance to continue earning a living here by working the bauxite resources unto the 100th anniversary (10 years from now), and for many decades beyond…
“Let us welcome BOSAI, being fully aware that this might very well be the last chance that we would have for the realization of a ‘second spring'.”
Hinds emphasised that bauxite occurrences in the Upper Demerara River area as it relates to bauxite mining was the most advantageous at one time.
“Today, the location is an old area and old-age implies not as attractive as it used to be, suffering wrinkles and high costs consistent with old-age…together, with BOSAI as a partner, the industry can be revitalised,” said Hinds.
The Prime Minister used the opportunity to acknowledge the contributions of Cambior for stepping forward voluntarily in 2003 to embark on a partnership with Government.
He noted that the actions of Cambior has changed the traditional operations of the mines, and has achieved a significant reduction in mining costs.
Hinds stated that the deal with BOSAI was not undertaken without serious considerations as to the implications for Guyana .
“We made some tough demands and proceeded to initiate some tough negotiations. Our concerns were recognised by BOSAI and Cambior/IAMGOLD, and we were able to reconcile and resolve the contradictions in a spirit of partnership and compromise…In this regard, Government has been persuaded that the company's aim is to grow and develop operations in Guyana , not only in calcined bauxite and new refractory products but also in metallurgical bauxite.
As it relates to job security with the entity, Hinds stated if BOSAI were to deem it necessary to curtail production and trim employment at any time in the future…We have a clause inserted to the effect that if employment or production were to fall below set figures, Government can choose to have another partner and will call on BOSAI to invite offers for its shares in this operation.
He added that a feasibility study will be conducted on the establishment of an alumina plant with a capacity of at least 250,000 tonnes per year, a hydro-electric plant and smelter.
“In this regard, we have agreed on certain milestones for this study, and we have made available the old alumina plant site as a possible location for the new alumina plant and smelter,” Prime Minister Hinds said.
Hinds urged those present to welcome BOSAI with an open-minded philosophy saying, “We need to recognise that BOSAI would do a number of things differently, but it should be noted that the success needed requires that a number of things be done differently...We welcome BOSAI on the basis of its commitment to work to be a good Corporate Guyanese Citizen, respectful of our Laws, particularly, in this case, our Labour Laws and our Environmental Laws”.
Hinds also used the opportunity to emphasise what he calls the Government Commitment to create positive opportunities for the welfare of every Guyanese, in every economic sector.
“We have persevered in seeking to refashion the traditional sectors in the search for profitability, to secure the sustainability of the industry,” said Hinds.
He added that in the case of bauxite, in addition to BOSAI, Government has engaged RUSAL, under which RUSAL has begun a feasibility study of a large alumina plant, hydro-power station and smelter…Additionally, we have been successful in encouraging the review of the laterites in the Pakaraimas as a source of alumina, that review being undertaken, and presently underway, by BHP, the largest mining company in the world.
While acknowledging that Linden could once again become a diligent source of bauxite products, including alumina and aluminium, Hinds stated the intention of Government is not to have a return to the psychology of a company-town or a single-industry town.
Hence, new economic ventures will continue to be promoted in the Linden area, such as ventures in wood-processing, agro-processing, call centres, and in the near and medium-term, an ocean terminal for northern Brazil .