Our bauxite companies have only been surviving with government help
Stabroek News
November 3, 2001

Dear Editor,

Many Guyanese who live in other parts of Guyana may not understand bauxite operations, and when they read the different comments made in the media by several persons they may get the wrong idea of its sustainability.

The Prime Minister was correct when he mentioned that the bauxite companies (Linmine and Bermine) suffered great loss after nationalization, this was true and the record speaks for itself.

It was always good for a country to own and control their own resources, but that can only happen when you have the money and technology to do so.

Guyana doesn't have the money and the latest technology to explore some of the resources, and to be competitive with the rich and more developed countries of the world.

The processing plants at Linmine and at Bermine are outdated. These plants are over 50 years old and deteriorated. Modern plants are required to achieve a higher recovery of our bauxite. Take Linmine for example which depends mainly on the sale of RASC Bauxite for it survival, and could only achieve a recovery of between 23 to 26 %/tonne of ore mined, that means over 75% of bauxite is wasted after washing. With today's market competition and price we need a plant that gives at least 40%/tonne of finished product.

Many may say that both Linmine and Bermine failed due to poor management. This may be a part of the failure, but this was not the only factor that led to the downtrend of the two companies.

Our first failure had occurred when we had nationalized the bauxite industries; this had resulted in the closure of the Alumina Plant, when thousands of workers were sent home.

The closure of the Alumina Plant had created a negative impact on Linden, and the pressure for survival had begun then. Many of us who had lived most of our life in the mining town had hoped that Linmine would survive and continue to carry Linden and Region #10, but that was not so.

The bauxite companies in Guyana are not making profit; instead they are all losing money due to the high production cost and low sale revenue achieved. The Government of Guyana continued to input money into both Bermine and Linmine so as to keep the two industries operating.

Secondly the money made by the bauxite industries during the 70's and 80's were spent elsewhere with little or nothing being put back in the industries to rehabilitate and improve their condition and also to improve the product line.

It is a fact that the management will need strengthening, but I must commend the managers, workers and the Government for keeping both Linmine and Bermine in operation under these difficult constraints.

The Aroaima Bauxite Company (ABC) is managed by foreign management and they had incurred a loss of over $US57 million. Has this loss resulted from poor management? "Maybe".

You must understand that the bauxite business that we had enjoyed in the 50's to the early 70's does not exist anymore. In those days the US currency was below G$10.00 to $US1.00. and we were getting a better price for our bauxite.

Today the energy cost has risen tremendously since then and we are selling the same bauxite for less than we used to sell it in those days. With this present high energy cost the bauxite industries will continue to work for a loss.

Let us all support the building of the Hydro Plant so that low energy cost can be obtained for the bauxite and other industries for their survival.

Most of us have read the letters of Mr DeFreitas and Member of Parliament Mr. Lance Carberry stating that Government is not doing a good negotiation on the Aroaima deal. Government had owned 50% of the share in that company. As a knowledgable and experienced person in the bauxite business I believe that the negotiation is being done in the best interest of bauxite survival. I am also very pleased that the Prime Minister had clarified the position in a detailed manner giving some key information on the Aroaima company transaction.

I have great confidence in the President and Prime Minister and I know that they will work in the best interest of the bauxite industries and for the Guyanese people.

The Prime Minister has more knowledge of bauxite operations than many of those who had spoken, and he is the only Guyanese that had ever developed a new bauxite product, (Guycor 93), even though we did not have the money to put the product in production, which would have brought substantial earnings to Guyana.

It was surprising to me and other Directors of the Linmine Board that Mr. P.Q DeFreitas was awarded a contract to conduct a feasibility study on Linmine during last year by BIDCO, the holding company for the bauxite industries in Guyana. This was done without the knowledge and approval of the Linmine Board of Directors. The Linmine Directors stated clearly that they did not see any need for another feasibility study on the industry at that time, because Linmine had been the most studied company in Guyana where many feasibility studies were done. That was a complete waste of hard needed money.

Mr. DeFreitas's report had nothing different from the other studies.

He claims that he did a feasibility study for Bermine and that company had been making profits since then. If that was correct how come Bermine is in the red and could be closed, if Government doesn't support it.

He also claims that Linmine is giving away its bauxite because of the price at which it is selling its products, and that he can acquire a higher price for Linmine bauxite. If this is so then we should fire his good friend Mr. S.L. Carmichael and those at BIDCO and give him the marketing job.

On the other hand Mr. Lance Carberry (MP) stated to the public that we can sell over 200,000 tonnes of CGB bauxite per year at over $US50.00/tonne. Why then did Linmine suffer just to acquire a market for 7,000 tonnes of CGB last year and had to sell same at a reduced price of $US 35/Tonne? Mr. Carberry should make this market offer available to the bauxite industries in Guyana and keep the nation updated on progress made. These statements are totally unrealistic.

Mr. Lincoln Lewis is another who tends to make critical remarks and his proposals are not best for survival of the bauxite industries. I know that the majority of workers do not share their views.

The survival of Guyana and its industries lies in the hands of the Guyanese people. It is like you are having a bird in your hands, you can either continue to squeeze it and let it die or you can set it free and let it live.

The politicians had failed Guyana in the past and some are still trying to kill it. The time has come for us to set the bird free.

It is time that Guyanese put political differences and racial tensions behind our backs and move this beautiful country forward. In difficult circumstances people support the President, and we should take an example from how the people of America are giving full support to President George W Bush, even though 50% are from a different party.

We are living in a technological age in which we are driven by information technology, and an era in which we are seeing firms merging together for survival and so as people. Let's not stay behind. I am confident that we can move Guyana forward.

Yours faithfully,

Andrew Forsythe