An August 2019 document prepared by the Russian Aluminum giant, RUSAL, the majority shareholder in the local company, Bauxite Company of Guyana Inc. (BCGI) has painted a dismal picture of its likely long-term future here on account of what it says is the poor quality of the bauxite being mined here and its lack of competitiveness on the international market. And the assessment of the authors of the document concludes that were RUSAL to wind up its BCGI operations “it could easily find alternative bauxite on the market” to feed its Ukraine or Ireland refineries.
The document which appeared to surface out of ongoing wages and salaries negotiations involving the management of BCGI and the Guyana Bauxite and General Workers Union (GB&GWU) asserts that were the Russian company were to quit its BCGI operations, not only would the mine be “permanently closed “ resulting in job losses for Guyanese but that there would be a knock-on effect for local communities which it says “will suffer due to vanished BCGI tax payments.”
Asked to comment on the contents of the RUSAL document, Guyana Trades Union Congress General Secre-tary Lincoln Lewis, who is also General Secretary of the GB&GWU told Stabroek Business that the information contained in the document is “RUSAL’s way of putting a gun to the head of the workers” as part of the company’s negotiating strategy in the ongoing pay increase talks.
Whereas the GB&GWU, in an August 27th letter to BCGI had rejected the company’s offer of a 4.5% increase in wages and salaries and fired back a demand for increases ranging from 5.5% from years 2009-2014 and 6.5% from 2015-2019, BCGI in its dossier persistently ‘talked down’ the quality of local bauxite mined at its Berbice Kurubuku operations compared to bauxite recovered elsewhere. “Any alumina refinery will prefer another available bauxite,” BCGI says in the dossier in which it also asserts that the company has the highest production costs in the Atlantic region, the result, it says, of “the highest stripping ratio, complicated bargaining logistics and dredging operations.” Guyana’s bauxite, the RUSAL document asserts, “has no advantages in quality in comparison with competitive bauxite from West Africa, Brasil or Australia,” it adds, asserting that high silica content necessitates “high consumption of caustic” in the company’s local operations.
Asserting that BCGI has the highest costs in the Atlantic region due to the highest stripping ratio, complicated bargaining logistics and dredging operations the RUSAL document states that each additional percentage of silica leads to a US$8 increase in alumina production costs. “Any alumina refinery will prefer another available bauxite,” the document adds.
And according to the RUSAL assessment, Alumina producers in the “Atlantic Region” depend on bauxite from other countries, the two alumina refineries in the United States, that have been historic users of Guyana bauxite,(Point Comfort and Corpus Christi) now permanently closed. “BCGI is used only by RUSAL refinery regardless of high bauxite costs and high silica content,” the document says.
And according to the RUSAL document BCGI is currently faced with the “most expensive freight (costs) ever, due to the port restriction at New Amsterdam” and the company’s inability to load large ocean-going vessels.
Lewis told Stabroek Business that it was the union’s view that the document was intended to send “its strongest signal yet” that it intended to “dig in further as the union and the workers continue their struggle for better pay and other conditions of work.” He said he believed that the contents of the document which “appears to make a qualitative comment by RUSAL on the feasibility of the BCGI operation in Guyana” required a studied response by government.
“When account is taken of the fact that eyes across the industry are likely to have access to that document, I think that there is every justification for our government to have a say on the assessment which it makes of our bauxite product,” Lewis told Stabroek Business.
Asked about the future of the wages and salaries engagement, Lewis told Stabroek Business that “it is beginning to seem that arbitration is the way forward”.
