GUYANA BAUXITE; 100 YEARS OF OPERATION
Oct 15, 2016, , http://www.kaieteurnewsonline....-years-of-operation/
Dear Editor;
Editor’s note; this is the conclusion of this missive that we carried in our edition yesterday
On February 23, 1971 on the occasion of Guyana’s Republic Day Anniversary, Prime Minister Burnham announced the introduction into Parliament of a measure to nationalize with reasonable compensation the Bauxite Company at Linden. On March 1st 1971, the Guyana Parliament voted for the Nationalization Act making it possible for the Government to take control of the Bauxite Industry. The Government then entered into immediate negotiation with Alcon for the purchase of Demba’s assets in Guyana, and on the 14th the Minister of Mines and Forrest issued a joint statement with Alcan announcing the term of Agreement to pay Alcan G$109M (US53M) within 20 years.
On the 15thJuly, 1971 the Bauxite Company was nationalized and the Guyana Bauxite Company Limited (Guybau) was born. Haslyn Parris was appointed the C.E.O of the Company. The Company at that time had employed over 5000 workers, with Linden having a population of about 25,000 persons. Guyana’s decision to take over the Bauxite Company attracted international attention and concern with positive and negative views of the future of the operation of the industry.
During the 70’s Guybau had maintained good production and sales, however, 10 years after nationalization we saw rapid slump in the industry especially during the 80s and 90s. First we saw the closure of the alumina plant, which resulted in the loss of approximately 2000 workers. It must be noted that during the 1970s Guyana which produce the world best calcined bauxite had the advantage of being the world leading supplier of calcined bauxite, a high grade of mineral used for lining steel furnaces and other high temperature applications.
After 1981, however China emerged as a major source of the production of calcined bauxite, and Guyana became known as a less reliable supplier. The poor condition of both plant and mine equipment had resulted in heavy loss of market during the 80s and early 90s. In 1985 we had a financial intervention of 34.5 million EU by Sysmin (System of Mining Products – Special Financing facility) and we had financial intervention in 1991; the World Bank, Sysmin and the European Investment Bank- provided US$23 Million in credits in that phase for use in the Initial Restructuring Phase (IRP).
Although we had all those interventions, Linmine’s production fell (more than 45% from 1991 to 1992) and continued to drop thereafter, despite under new management of (Minproc), an Australian Company which was brought in under a three years management contract by the PNC Government to manage the industry and to make it profitable, after local management of the Bauxite Industry Company failed to make it profitable.
Minproc also failed to make the industry profitable and the contract came to an end in 1995. After the death of President Burnham, Desmond Hoyte became President, and who brought in Minproc. He was to decide that if not profitable, he would shut down the industry.
However, there was a change of Government in 1992, by the PPP/C winning the first democratic elections since 1964. Guyana’s New President, Dr. Cheddie Jagan decided not to close the bauxite industry and to find International joint partnership.
A decision was taken by the PPP/C Government of Guyana in June 2003 to have Linmine operations managed by Cambior, a Canadian company who owned OMAI Gold Mine. (OBMI) as an interim measure, until the financing for the full joint venture through privatization took place. In the month of December 2004 the Linden Bauxite was privatized by joint shares of Cambior having 70% shares and Government 30% shares. The Cambior shares were sold to BOSAI CHINA in year 2007 and Government retained 30% share. Since privatization of the industry, it continues to be profitable under the management of Bosai. Here again there is the return of the (PNC) APNU/AFC Government, let’s hope for continued profit for the bauxite industry in Guyana.
In conclusion I believe that if the Bauxite Company was not nationalized from Demba in 1971, Guyana today may have seen the continued operation of the alumina plant and even a smelter plant here, because Demba was doing a study to develop a hydro electric plant at Tiger Hill at Malali, some 40 miles upper Demerara River from Linden.
Andrew Forsythe
Former Board Member of Bosai
