Govt. should negotiate with RUSAL for Bosai’s operations – IMC

Jan 03, 2009 News

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Chairman of the Linden Interim Management Committee, Orrin Gordon, has said that the recent Heads of Agreement signed between the Guyana Government and Bosai signals to a large segment of the bauxite community that there should be cautious optimism of a resurgence of economic activities in the mining town.

Eleven percent of the new company will be owned by Guyana, while the remaining 89 percent will be held by Bosai Minerals Group of Guyana.

Considered the single largest investment in Guyana, the US$1B project is expected to provide some 700 jobs in a community that has seen a dearth of employment opportunities in recent times.

For many Lindeners, this is good news indeed, and some can hardly wait for the new project to get underway.

The IMC Chairman noted that, over the past two decades, most of the news emanating from the mining town revolved around the “Rs”- retrenchment, redundancy, right sizing, and restructuring — which really meant persons losing employment with the bauxite industry and “going on the breadline.”

After a lot of “downsizing” by Minproc, which was hired through a World Bank loan to restructure the bauxite industry; and after the subsequent closure of the bauxite industry; OMAI, owned by Cambior, decided to take a shot at bauxite mining, after it had ceased its gold operations.

Many residents were happy at this development, as all they had become accustomed to seeing was unit after unit which took on the responsibility of running the bauxite industry being dismantled, Gordon reported.

OMAI’s proven ability in mining considerably raised expectations for the resuscitation of the bauxite industry.

Those expectations were, however, short-lived, as Cambior later sold to “I AM GOLD”, which stated very early that it had no interest in bauxite mining.

The Chinese company Bosai would later purchase “I AM GOLD’s share in the bauxite company.

There was much trepidation with this changeover, as many were of the view that, with China being a big competitor of Guyana’s refractory grade bauxite on the world market, it would close the industry in Guyana.

Other apprehensions stemmed from the fact that Bosai’s transition team did not look as large as one is accustomed to seeing.

But, contrary to what was expected, Bosai soon put its public relations team in motion, and sold its intent quite expertly to the community; and within a short time, Bosai has woven into the social fabric of the town, using both local and expatriate personnel.

The company has made a genuine commitment to deal with the dust nuisance. It projects to construct another kiln in 2009.

The latter project has, however, been put on hold for another year, due to the global financial crisis, according to reports.

Most significant, however, is Bosai’s desire to go ahead with the alumina plant project, despite the current financial crisis worldwide.

A major consideration, though, is the question of ore requirements to make the alumina plant feasible, according to sources.

It has been estimated that about 200 million tonnes of ore would be required, as the banks in China would need to ascertain that more than 200 million tonnes of the commodity are available to warrant its US$1B outlay to Bosai.

Bosai reportedly has less than this amount of ore “decidedly” earmarked for such work.

The company will need proven reserves to match the Block 37deposit, which is 100 million tonnes, and is the largest deposit of ore in and around Linden, according to reports.

“It would be opportune to note that Rusal has all the major reserves around Linden “palmed off.”

Why then should Bosai invest so much if it has to bargain with Rusal to get the reserves?” Gordon asked.

“It is therefore my view that Bosai should be assured of these reserves, as it has demonstrated intent; and if the project starts, the blocks should be handed to Bosai to meet their plant needs.”

“I am told that Omai as well as Bosai’s agreements have clauses which stipulate that they demonstrate practically utilisation of these reserves within a two-year period.

I have to assume that the same clauses are enshrined in RUSAL’s agreement! This issue has clobbered my consciousness, because of an issue involving a local farmer who has been feeding Linden for over 25 years, and has been using 400 acres of land in the Moblissa area for over 15 years.

“The farmer could not get title to this land through our Lands and Surveys Commission. Permission to use the land had to come from RUSAL!

“The circumstances of this issue are hard for me to accept,” the IMC Chairman declared.

Gordon ended by saying that he hoped such an issue will not have an impact on the Bosai investment, when that comes on stream. (Enid Joaquin)

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