Workers submit plan for Bermine takeover


Stabroek News
June 9, 2001

Berbice Mining Enterprise (BERMINE) workers have submitted a proposal for the takeover of the company to President Bharrat Jagdeo which envisages a strategic investor riding to the rescue of the capital-starved entity.

The workers' proposal, dubbed the new BERMINE, has the support of the two bauxite workers unions - the Guyana Bauxite & General Workers Union (GB&GWU) and the Guyana Mining and Metals Workers Union - and has been sent to Opposition Leader Desmond Hoyte and co-chairmen of the committee studying the prospects for the bauxite industry, Dr Clive Thomas and Robeson Benn.

Alcoa has presented a proposal to the Guyana government for the restructuring of the Bermine operations which has been met with opposition from the unions and the People's National Congress REFORM.

"I wrote to the Prime Minister last week and said (that) to impose the Alcoa proposal upon the people is politically adventurous," general secretary of the GB&GWU, Lincoln Lewis, told reporters at a press conference hosted by the union yesterday.

"If the gravity of the situation is not considered it will take this country back to where we were in March this year," he said, clearly referring to the post-elections unrest. Under the Alcoa proposal 554 jobs will be lost and the Everton operations closed down.

Lewis, who is also the Guyana Trades Union Congress general secretary, said the unions had consulted with the workers at the Kwakwani and Everton operations and had a briefing at the Aroaima Bauxite Company (ABC) site. Alcoa is the parent company of ABC.

It was the considered opinion of the workers that the bauxite operations be allowed to continue at the Berbice locations.

"We have an interest in making sure the proposal makes provision for all tenets and elements of the operations in Berbice to remain intact and the performance of the company must be optimised," Lewis stated.

The workers first put up a bid to take over the Bermine operations in early 1992 which was supported by a US trading company. This initiative was jettisoned when the new government took office. The second bid was in 2000 and which bid Lewis felt was not given enough attention by the government.

Lewis said it is expected that the proposal will be addressed by the bauxite committee and that President Bharrat Jagdeo and PNC REFORM leader Desmond Hoyte will deliberate on it.

According to Lewis, the government has stated it was willing to absorb certain liabilities the company may have under the Alcoa proposal.

The workers' proposal says that if government is prepared to give these concessions to Alcoa then the workers' plan should be able to enjoy similar conditions. The ore deposits in Berbice would be made available by the state to the new resulting company.

Lewis said the workers' proposal involves a strategic investor who has already given a commitment to re-tool the Everton operations and provide new machinery for Kwakwani. The investor will provide ongoing financing for the operations. The identity of the investor is being kept confidential at the moment.

The proposal will also satisfy government's desire to remove the bauxite company from within the government's accounting system, Lewis said.

He noted that government has argued that Bermine relied on the Treasury for assistance and pointed out if the workers take over this will no longer be the case. Instead, they will have to go to banking institutions for financing.

Lewis also noted that the US$1.3 million given to the company was a loan for re-tooling which Bermine has to repay.

Doing a comparative analysis of the Alcoa proposal and the one submitted by the workers, Lewis pointed out several advantages of the latter.

He noted government will have to pay out $260 million to workers for severance benefits if it went ahead with Alcoa's proposal but this would not be necessary for the new Bermine operations.

For Alcoa, there will be no product diversification but the new Bermine will recommence the production of abrasive A grade calcined bauxite, chemical grade bauxite and metal grade bauxite.

The inter-company arrangements of Alcoa keep the price of the product unknown but it will be open for all to see in the new Bermine, Lewis stated.

He alluded to the US$57 million debt racked up by ABC over the years which will have to be shared by the Guyana government and declared there would be no debt sharing in the new Bermine.

Royalties have never been paid by ABC since it began operations in 1989 and there is no provision for this in Alcoa's proposal.

Government also subsidised harbour dues for ABC through the Transport & Harbours Department (T&HD). The workers are proposing that all royalties and taxes will be paid by the new Bermine and T&HD will be allowed to earn its keep.

Lewis noted that currently all of ABC's foreign exchange earnings go to Alcoa and only a small amount is retained to pay wages and salaries. The 1989 ABC agreement will not be needed by the new Bermine, Lewis said.

He also noted that all the senior managers of ABC were expatriates but in the workers' proposal first consideration would be given to Guyanese.

Lewis declared that there is bauxite ore in the Berbice region totalling some 106 million tonnes which is enough for both ABC and Bermine to make them profitable.

President Jagdeo had indicated earlier that if the workers came up with a proposal it would be considered.