Minister of Finance Dr. Ashni Singh during his budget presentation last Monday acknowledged that Guyana’s bauxite fortunes continue to be mixed with Bosai’s operations benefiting from strong prices of over $US400 per tonne while Bauxite Company of Guyana Inc. struggled with high production costs.
Noting that the bauxite industry recorded growth in value added of 12.5 percent in 2012, the Minister said that production for last year was 2,213,972 tonnes with the highest rate of increase achieved in the production of cement grade bauxite.
The Minister pointed out that Government has worked hard to attract “credible international investors” to the local bauxite industry and to ensure they maintain their operations even in the most hostile of external conditions.
“At a time when bauxite plants around the world and even in our Region have been closing operations, the domestic bauxite industry continued producing. In Guyana, the fortunes of the two major bauxite companies continue to be mixed. Bosai’s operations continue to be supported by strong calcined bauxite prices of over US$400 per tonne, while BCGI’s operations continue to be challenged by costs that exceed prevailing market prices,” he said.
He added that increasing production and investment are expected to continue and that Chinese firm Bosai is planning to expand its product mix to include the production of metallurgical bauxite while the RUSAL subsidiary, BCGI recently completed a US$20 million investment in mobile equipment.
“Further increases in production are projected in 2013 and beyond by both Bosai and BCGI, with the continued substantial investments being made by both companies,” he said. “In 2013, Bosai’s projected investments continue to target increasing volume. The company will continue to operate in the Dacoura and East Montgomery mines. BCGI will continue to invest in opening up its new mine at Kurubuka and making its operations more efficient, with production expected to commence in 2014 from this new mine,” he said.
“BCGI’s operations continue to be less than cash positive, necessitating financial support from its parent company for continued investment and operating deficits. While higher levels of production supported by these investments are expected to lower average operating costs, it is recognised that Guyana’s production costs for metallurgical bauxite are generally in the higher tier due to overburden, high logistical costs, and the high price of fuel for mobile equipment, drying and transportation operations,” he said.
When Bosai and BCGI first entered the bauxite industry there had been talk of a huge investment in an Alumina smelter. Neither company has since pursued this.
The Minister also announced that First Bauxite Incorporated is due to start construction of a US$120 million calcined operation in late 2013 at Bonasika.
