Stabroek News
June 20, 2001

President Bharrat Jagdeo and PNC/R leader Desmond Hoyte will be meeting with the Committee on Depressed Communities on Friday at which time four projects will be presented for early implementation,

The two leaders will also confer on the same day with the Committee on Bauxite Resuscitation to further examine the proposals by Alcoa and the Bermine Employees Group/Strategic Investor.

The committee put up two sets of recommendations on the proposals by Alcoa. The government has also received a proposal from the Bermine employees which they say would be of greater benefit to the country than the Alcoa proposal. One set of the committee's recommendations has explored ways of adapting the Alcoa proposal.

The other suggests rejecting the proposal but inviting Alcoa to re-submit a proposal with more specific details which could be the basis for serious negotiations. It also examined the various synergies that would result from the merger such as economies of scale, research and development of new products, sustainability of the operations at Aroaima, Kwakwani and Everton and community services.

The leaders agreed to the Friday meeting following a caucus with the members of the committee yesterday at the Office of the President at which they received and reviewed the report on the options available for the sustained viability of the industry in the Berbice area.

Government has expressed a preference for the Alcoa proposal but President Jagdeo has said that he was willing to consider any other proposal which was practical, viable, could be implemented immediately and would not impose a burden on the Treasury.

The Alcoa proposal, which the employees and their unions oppose, calls for the immediate closure of the Bermine operations at Everton and the merging of the operations of Bermine at Kwakwani with that of the Alcoa/Government of Guyana-owned Aroaima. The closure of Everton would mean the immediate loss of 270 jobs at Everton and a loss of 544 jobs in all when the workforce is eventual reduced from 944 to 400 over a three-year period.

The management of the merged operations would be in the hands of Aroaima, who the employees point out has run up a debt of US$57 million dollars, has made losses for the past five years and has paid no royalty or taxes or dividends to the government since it began operations in 1991. During this period it exported 16 million tonnes of bauxite.

Bermine pays taxes and royalties, enjoys no duty-free concessions and pays a 15 per cent interest on advances from the government. It has, however, made losses in four of the last ten years including last year. Its losses last year were in part due to Alcoa cutting its orders by 50 per cent after the company had geared up to provide it with some 400,000 tonnes of bauxite.

Alcoa also suggests, too, that the government portion of the debt owed to Reynolds (now Alcoa) be converted to equity, a proposal which the employees say would not inject any new funds into the operations.

Stabroek News understands that Alcoa proposed to sell the restructured Bermine/Aroaima operations to a venture capital company in which Randy Reynolds is involved through a limited partnership arrangement.

The Bermine Employees Group believes that an alternative to closing down Everton was to turn its shares over to them in the new Bermine it would form with a strategic investor.

The investor identified would provide the capital required to recapitalise and restructure the company's operations and relieve the Treasury of future financial responsibilities to Bermine.

The investor is Centrotrade Minerals and Metals Inc and it proposed to provide funding for rehabilitating the calciner at Everton, as well as a line of credit for the lease/purchasing of mining equipment; to work with the employees to finance the purchase of government shares; to provide technical input and modify the products produced by Bermine to optimise its profitability; and post-export financing or establishing a credit line in return for the rights to sell the company's products for a five-year period. Yesterday too, President Jagdeo and Hoyte also met with the Committee on Depressed Communities and it was agreed that the committee would by Friday provide one project in each of the four identified communities for early implementation. The communities are the villages of Buxton and Enterprise on the East Coast Demerara, and De Kenderen and Met-en-Meerzorg on the West Coast Demerara.