By Patrick Denny
Stabroek News
June 6, 2001

Bauxite union leader Lincoln Lewis says the government is overlooking a feasible proposal for ensuring the sustained viability of the Berbice Mining Enterprise (Bermine) which a US-based consortium had put forward.

Lewis, also General Secretary of the Trades Union Congress, told Stabroek News that the government had not dealt with a proposal from Centrotrade Minerals and Metals Inc (CTMM) in its haste to accept the offer from Alcoa to take over the operations of Bermine's operations at Kwakwani. Workers in the industry and the unions are opposed to this deal which will result in the closing of the Everton plant and the loss of jobs. Prime Minister Sam Hinds could not be contacted yesterday to respond to Lewis' claim on the CTMM offer.

Representatives of CTMM yesterday met with the Joint Bauxite Committee (JBC) which was set up as a result of the dialogue between President Bharrat Jagdeo and PNC REFORM leader Desmond Hoyte. CTMM yesterday put forward its proposal for the sustained viability of Bermine at BIDCO's Head Office on Peter Rose and Anira Street. The CTMM is a consortium of local and overseas investors.

Earlier in the day, the JBC held a press briefing at which Co-Chairman Dr Clive Thomas told reporters that the discussions with CTMM will be made public once the committee submits its final report on the Alcoa Concept Paper for a restructured Bermine and Aroaima Bauxite Com-pany to President Jagdeo and Opposition Leader Hoyte on Saturday, one week ahead of its one-month deadline.

According to Alcoa's proposal, the closure of Everton would result in some 270 workers being put out of work. The job losses would have a consequential impact on the immediate community of Everton as well as on nearby New Amsterdam. In the long run, the workforce of the new enterprise would be reduced to 400, resulting in a loss of some 544 jobs in total. The government has says it favours the Alcoa proposal though it was amenable to considering other viable options.

The government has said too that if the Alcoa proposal was rejected it would mean the Aroaima operations would be closed resulting in the loss of jobs there. There would also be an increase in shipping costs and the additional expense of regularly dredging the Berbice River which Aroaima now undertakes.

According to Lewis, the Bermine management had received an offer from CTMM, a New York-based marketing firm, under which it would have provided some US$600,000 to rehabilitate Bermine's calciner at Everton in return for exclusive purchase rights of all of the abrasive grade bauxite produced over the next five years. It would want a guarantee of an annual production of at least 70,000 tonnes. If its proposal is accepted, it would purchase 30,000 tonnes this year.

Stabroek News has been informed that the market for abrasive grade bauxite has developed because of the closure of Alcoa's operations in Guinea.

The price at which Bermine's production would be purchased will be based on the world market price and would be negotiated by the December of the preceding year.

Centrotrade also offered to provide the estimated US$500,000 annual working capital it would need for the long-term production of abrasive grade bauxite in the form of advance payments against mutually agreed annual purchases.

It is also willing to consider providing two trucks on a lease/purchase arrangement if Bermine fails to find a source of funding to acquire them.

Centrotrade also wants to be given first and last refusal to purchase the Bermine operations if the government should decide on divesting it some time in the future.

The Government has indicated that it is unable to provide the US$5-$6 million working capital Bermine had said that it needed this year.

Trade union officials have told Stabroek News that Bermine made a loss last year due to the cancellation by Alcoa of 200,000 of the 400,000 tonnes of bauxite it had ordered last year.

They said that since its establishment Bermine had made a profit in at least seven of the last ten years and had paid taxes and royalties on the bauxite it had shipped. In contrast, they point out that Aroaima had made losses even in the years when its revenue was greatest and has paid no dividends to the Government as a shareholder or royalty or fees to the treasury.

However, Prime Minister Hinds had pointed out recently that the company had paid down on the capital and interest for the US$60 million that Reynolds Metal Company, the original partner with the government, had advanced as start-up capital. Reynolds was acquired by Alcoa last year.

Trade union officials also questioned the benefit of the Alcoa proposal pointing out that in return for converting the US$60 million debt Aroaima owes, the government would be giving Alcoa access to some 20 million tonnes of proven reserves and 80 million possible/probable tonnes of bauxite reserves.

They point out too that the conversion of the outstanding debt on the Aroaima books to equity in the new entity would not result in any infusion of new capital in the enterprise.

The officials point out that an added advantage of the Centrotrade proposal would be that it would save the jobs at Everton.

The JBC will also be travelling to Everton to hear the views of the management and workers there on the options for keeping the industry going in a sustainable manner. Last week, the committee visited Aroaima and the Kwakwani operations on a similar exercise.

Last weekend, Prime Minister Hinds, who has ministerial responsibility for the bauxite industry, visited Everton and Kwakwani to explain the government's preference for the Alcoa proposal.

The JBC has since met with representatives of the Privatisation Unit, the Guyana Trades Union Congress, the Aroaima Mining Company, Ramon Gaskin, Peter Cummings, Dr Grantley Walrond Sylvester Carmichael and Patrick DeFreitas.