The way has been cleared for the single largest investment in Guyana with the signing of the heads of agreement in the Bosai Minerals Group yesterday.
The project, which will see an investment of US$1B, will pave the way for Linden’s economy to make a huge turn around with the creation of some 700 jobs.
The investment will see Guyana owning 11 percent of the Guyana Aluminum Incorporation, the new company to be formed to replace the existing bauxite entity. The remaining 89 percent will be held by Bosai Minerals Group of Guyana.
Yesterday, the agreement was signed off by Minister of Finance, Dr Ashni Singh, and Managing Director of Bosai Minerals, Zhilun Yuan, at Duke Lodge, Kingston.
The investment is almost the size of Guyana’s Gross Domestic Product, President Bharrat Jagdeo later said.
Speaking at the end of the signing ceremony, President Bharrat Jagdeo said that it is time that Guyana moves beyond just talking about the promises of the land and the dreams of who were the founders of independent Guyana.
“I want to caution that although we are signing the heads of agreement…there is quite a bit of work to be done before we actually see construction. We still have to complete some elements of the feasibility study from different perspectives.”
The Head of State noted that the global financial crisis is going to have an impact on the time line of the project, but he is hopeful that it will have minimal impact.
“I am very pleased that this project will be carried out in Linden (which) has seen a major downturn in fortunes from the ‘glory days’.”
The economic woes that people face in Linden, the President said, can be traced directly to a history of bad economic policies.
“We have already launched a project with significant funds from the treasury as well as the European Union to try to diversify the economy of Linden to make it less reliant on bauxite as an activity. Hopefully, with this plant being built, that the demand for labour will increase significantly and the town economy will improve.”
It is rare, the President noted, that such a large investment, almost equivalent to the size of the country’s economy, comes to a nation.
This will have a positive impact on the overall Gross Domestic Product once handled properly, the Head of State noted.
“The people of Linden also have to work with us to make this a reality…there is going to be lots of activities there.”
He added that, in the construction period, persons may experience some amount of discomfort, but it will in the end be a good venture for the town and its economy.
Managing Director of Bosai, Zhilun Yuan, said the project will be successful if the Government of Guyana and Bosai work closely together to achieve common goals.
He said that the money would be sourced from Chinese banks. The project comes just eighteen months after Bosai acquired the bauxite assets once owned by Omai Gold Mines Limited.
J.K Fang, Manager of International Projects, noted that the joint venture will be exempted from corporation tax for the first 10 years of operation.
The investment, he noted, will comprise 30 percent liquidity and 70 percent finance.
At present, feasibility study is currently ongoing, with construction expected to begin by the end of December 2009, with a completion date three years later.
Meanwhile, some US$3M is being spent to manage dust nuisance in Linden. This problem sparked protests that actually involved the municipality, and there was the threat of legal action.
Residents have been complaining about the large amounts of dust as a result of feasibility study in the area by the mining company.
The first stage of the correction would be undertaken by the first quarter in the new year, with the introduction of dust suppression equipment.
According to Mr McLean, there are many methods to be applied, including the possibility of bagging the dust particles off, what is called the cyclone method that would see the dust being recycled into the plant machinery for the alumina production.
By the end of September, dust should no longer be a problem in the community, according to Managing Director Zhilun Yuan.
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