A feasibility study conducted by the Chinese company Bosai Minerals Group late last year did not favour the establishment of an alumina plant in Linden, Prime Minister Samuel Hinds said on Friday.
During his budget debate presentation, Hinds reported that Bosai cited, among other problems, the high cost of the bauxite fee, due mainly to the high stripping ratio and the high cost of shipping products to international markets. “Our government is disappointed with this negative result, but it is better not to proceed if you can’t see profits, if you can’t see profitability,” Hinds said.
He noted, however, that a new bauxite company has had positive results from a feasibility study which was conducted in the Bonasika area, and that they have identified adequate reserves in terms of grade and volume to justify the establishment of a mine and plant to produce a calcite bauxite product and other non-methodological bauxite products.
Bosai had previously signalled its intention to invest US$1 billion in an alumina refinery and aluminium smelter.
In November 2008, the government and the head of Bosai signed an agreement to permit the company to conclude a feasibility study to determine the financial and economic attractiveness of establishing a one-million-tonne per year alumina plant in Linden.
Previously in January 2007, the administration had entered into a Letter of Intent with the Russian bauxite giant RUSAL to pursue the development of an alumina plant and smelter.
The Privatization Unit had said that these projects were subject to feasibility studies and that favourable results could see the construction starting by this year.
Meanwhile, Hinds also defended the government’s record with bauxite workers, saying that it has treated them no differently from sugar workers.
He said he was confused as to how the Guyana Bauxite and General Workers Union handled its negotiations with RUSAL prior to the impasse. “I wondered how come the union behaved like this,” he noted.
In his presentation, Hinds referred to the 2011 budget as progressive and visionary—a transformative tool which government will use to change how people are living in the country through job creation, improved services and new opportunities.
Jobs are opening in the mining sector, he said and he noted that the sector is attracting major investments as gold prices climb.
He said too that many small and medium scale miners are driving development in the sector and “contributing a lot.”
But while gold mining is expanding and emerging as one of the stronger sectors, he noted that allegations and counter-allegations are flying around, and that the circumstances have brought out the worst of many of the people in mining. “There is a need for a huge increase in policing by the GGMC while there are some concerns too that persons who are being selected to train and police should be above board and not add to the problems,” Hinds stated.
He posited that the GGMC needs to add close to 160 officers to its current crop if it is to effectively monitor what is happening on the ground.
Hinds’ comments regarding the Guyana Geology and Mines Commission (GGMC) follows statements by President Bharrat Jagdeo on Tuesday, when he told GDF officers that there is need for some of them in the state agencies and he singled out the GGMC. “I need some soldiers in there.
The corruption in the field is unbelievable, particularly with the price of gold where it is and I need to clean up some of this situation there too,” he said.
But GGMC head William Woolford has since said there is no evidence of widespread corruption of mines officer, noting that while allegations have been made, those making the allegations have not followed up on matters.
Government is looking forward to much activity this year, Hinds said, while adding that they hope to see at least three or four oil wells drilled by December.
One of the wells is currently being drilled in the Rupununi and Repsol is likely to begin drilling by April off the Corentyne Coast, Hinds said.
Further, he said that CGX will start drilling its own well by August and or September and according to him, the company has begun arrangements to support the drilling. Hinds said CGX is currently developing a dock and storage area in the Crab Island area.
“So here we have another step which will turn out to be a big step in the development of larger ports at the mouth of the Berbice River,” he added. He said also that one of the local drilling companies recently applied to look for oil in an on-shore area in the country. The application is currently under consideration.
And touching briefly on the electricity sector, Hinds said that government was not satisfied with how Guyana Power and Light (GPL) performed. He noted too that the power company continues to struggle with commercial losses.
