The PNC REFORM says it is astonished by statements attributed to President Bharrat Jagdeo and Head of the Presidential Secretariat, Dr Roger Luncheon, that in the absence of the Joint Bauxite Resuscitation Committee the government would have moved to restructure the bauxite industry in Berbice on the basis of the Alcoa proposal.
Stabroek News
August 28, 2001
A statement from Congress Place on Saturday slammed the statements that the government would have implemented the Alcoa proposal "for the restructuring of the Bauxite Industry in Berbice through the merging of ABC and Bermine, with the immediate loss of 336 jobs through the closing of the Everton operations of Bermine and the eventual loss of 554 jobs within three years.
"Business prudence suggests that the government, as a 50% shareholder in AMC/ABC, (with the other 50% owned by Reynolds International Inc. now a wholly owned subsidiary of Alcoa), would have heeded Alcoa's warning -accompanying its Concept Paper - that: `A recipient must conduct its own investigation and analysis of the situation and of the information contained herein and is advised to seek its own professional advice on the legal, financial, taxation and other consequences of such a transaction.'"
The release noted that in Alcoa's own words, the restructured entity, "at a sales volume of 1.6 million tonnes the estimated unit cost is US$24.80/tonne.
"It is difficult to understand how the entity would have been able to sustain a price per tonne of MAZ (metal grade bauxite) of less than US$20.00/tonne as is being suggested." BPU-Reynolds to which Aroaima Mining Company sells its bauxite is not prepared to purchase bauxite at more that US$17.50 per tonne.
The release said that the PNC/R was "aware that the representatives of the President have steadfastly refused to undertake the required due diligence for ABC, while Alcoa has already conducted a similar exercise for Bermine."
The release claimed that the government's representative on the Board of ABC, Robeson Benn, had refused to inform the members of the committee about what transpired at the recent meeting of ABC shareholders in the USA, but that Alcoa had informed the committee about its concerns as expressed at that meeting.
With reference to remarks by the President and Dr Luncheon that much time had been lost, the release noted that co-chairmen of the negotiating team of the Joint Bauxite Resuscitation Committee, Dr Clive Thomas and Benn, had written to Alcoa (letter dated June 30, 2001) inviting its representatives to meet to begin negotiations between July 6-8 and that the Alcoa representatives were unable to meet the committee before August 20. It also noted that although Alcoa/RII/ABC had been committed by the anti-trust regulators in the USA to supply for the next two years the 1999 level of MAZ ABC supplied to the BPU Reynolds Sherwin Alumina Plant at Corpus Christi, Texas, "BPU Reynolds is under no obligation to purchase any of the ABC MAZ. ABC must compete on price, all other specifications being equal, with other MAZ suppliers for a share of Sherwin's business." It was in these circumstances that BPU Reynolds informed Alcoa/ABC that it would not purchase any bauxite for 2002 unless the price was no more than US$17.50/tonne.
"President Jagdeo and Dr Luncheon need to be reminded that the joint committees were established in good faith as an outcome of the dialogue with the leader of the opposition," the release said.
The release observed that the two leaders intended that the committees would provide them "with their considered professional and objective evaluations and recommendations.
"Therefore, it is unacceptable for the President or anyone else to attempt to coerce the committees into endorsing any pre-conceived position or decision of the government."
Before the joint committee on bauxite resuscitation was established, the government had expressed acceptance of the Alcoa proposals, which had been the subject of fierce criticism from opposition political parties and the trade union movement.
As a result, the government asked the committee to examine alternative proposals to ensure that they were readily implementable and practical.