Editorial
In our edition of last Sunday we reported on a letter from Alcoa addressed to the Joint Bauxite Committee concerning its proposal for the restructuring of the Berbice Mining Enterprise (Bermine). It will be recalled that Alcoa had made an offer to the Government earlier this year proposing the immediate closure of the Everton operations, as well as the merger of those at Kwakwani with those of Aroaima. Bermine, which mines at Kwakwani, is wholly owned by Government; Aroaima is jointly owned by Government and Alcoa. The latter company initially had given the Government a May deadline to respond to its offer, which it later extended to June.
Stabroek News
July 6, 2001
In the meantime, as a consequence of the dialogue process, President Jagdeo and Mr Hoyte set up a committee on bauxite resuscitation ? the Joint Bauxite Committee. Its mandate was to evaluate the options available to make the bauxite industry viable over the long term, including the Alcoa option. Initially the committee was given a three-month deadline to complete its work, which later reduced to one month.
So far so good. But before the committee ever got the length of submitting its report, the Government announced that it favoured accepting the Alcoa proposal. When questioned about this surprising revelation, which pre?empted the findings of the committee set up to make recommendations on the matter, the Prime Minister said that the administration was not acting in bad faith; the Alcoa proposal had been on the table since 1997, and in January the company had carried out a due diligence exercise at Bermine. He went on to say that the Government's predispostion towards the Alcoa offer was a recognition that the "people in bauxite had been having a time because of the high overburden, shipping costs and the market operations."
All of this was quite irrelevant, of course, and after a flood of criticism and indications from the workers and the unions that they would not accept the Alcoa proposal, the President stated that while it favoured Alcoa, the Government was open to considering any alternative which was practical, viable, readily implementable and would not impose a burden on the treasury. By this time, another player had entered the arena with an offer, namely the Bermine Group of Employees/Centrotrade Minerals and Metals (CTMM).
The next stage in the bauxite drama occurred when the committee actually issued its report, which revealed a split among the members as to the viability of the Alcoa proposal. One group, led by Mr Robeson Benn, recommended the acceptance of the proposal, while that led by Professor Clive Thomas advised that it should be rejected in its present form on the grounds that it was an inadequate basis for negotiation. The group regarded the proposals as essentially a concept paper, a description which even the company had used.
Following the completion of the report, the ball was tossed back into the court of Messrs Jagdeo and Hoyte, who authorized the setting up of a negotiating team comprising Professor Thomas, Mr Benn, Mr Lumumba and Mr Carberry with a view to holding discussions with the two potential investors who had made submissions on the bauxite industry. The Joint Bauxite Committee then wrote Alcoa and CTMM informing them of this development, and advising them that they would soon be notified of a proposed timetable for discussions, additional submissions and other related matters.
And then the bombshell which we reported on last Sunday descended. A letter from Alcoa signed by Mr Chris Whelan, the company's corporate development manager peremptorily demanded a "direct response" to its proposals. And if it didn't get a "direct," positive response ? at least in principle ? it would "withdraw any support for the proposal." This brief letter, petulant and arrogant in tone, hardly seemed appropriate to the circumstances. Did Alcoa want a contract or not? If it did, surely this was not the route to achieve it, since persuasion is the acknowledged mode of wooing a partner.
Either Alcoa is extraordinarily short-sighted, and believes it can bully its way through, or it had been given reason to believe at an earlier stage that a commitment from Government would be forthcoming, and now is highly annoyed that a deal which it believed, rightly or wrongly, was secure, is now in doubt. Certainly the public statements by Government officials favouring the company's offer even before the Joint Bauxite Committee had submitted its report, might tend to that conclusion. To date the Government has had no comment to make on the unacceptable tone of the letter, or whether Alcoa had been given reason to believe at an early stage that its proposal would have been accepted. Perhaps it would like to offer some clarification now.