Bauxite industry needs capital injection, right product mix
Carberry claims development plans ignored
Stabroek News
June 1, 2002
The PNC/R maintains that the bauxite industry could be viable but would need an injection of capital and the right product mix.
It on Thursday accused the government of steadfastly refusing to implement any structured programme to restore the Linden Mining Enterprise's (Linmine) competitive capabilities.
PNC/R parliamentarian Jerome Khan told a Congress Place press conference that the government was yet to explain how the US$26 million earmarked for the rehabilitation of Linmine's plant and equipment was spent through MINPROC of Australia and yet left the company worse off than before the expenditure.
MINPROC was brought in by the PNC administration of then President Desmond Hoyte, but the contract was completed under the PPP/C administration of the late President Cheddi Jagan.
Among other things under the contract, MINPROC was to use the US$26 million to rehabilitate Linmine's plant and equipment and strengthen its marketing department.
He reiterated charges of the government using the state-owned Aroaima Bauxite Company to undermine the also state-owned Berbice Mining Enterprise's (Bermine's) products. The government has denied this. Khan said this was being done by "drastically reducing the price of Metallurgical Grade Bauxite (MAZ)" and through Viceroy Shipping, ABC's exclusive sales agent for Chemical Grade Bauxite (CGB) in the USA, offering this product "at significantly reduced prices to Bermine's customers with inducements such as consignment sales."
PNC/R chief whip, Lance Carberry, who is also its spokesman on the industry, also charged the government with refusing to restructure the industry.
He said that over the years Bermine had submitted a number of restructuring proposals including the financing requirements but that these were never adequately addressed. He explained that for example if the plan called for US$30 million the government would only provide US$5 million and then use that to say it was subsidising the industry.
About the mix of products, he accused Prime Minister Sam Hinds of failing, while he was in charge of development and research for the industry in the 1970s and 1980s, to bring on stream even one product under the 'Guycor 93 Project'.
Carberry charged that the Prime Minister was tasked with "developing the new line of homogenised, stable, refractory products filling particular slices of the market for high alumina refractory materials."
He said that was the plan the industry had, but it was frustrated by the failure of the research department to complete its assignment.
And about a related issue involving ABC and Viceroy, Khan charged that the government was misleading the public when it said that the exclusive use of the loading basin given Viceroy was merely a continuation of a 1990 agreement that was entered into by the Hoyte administration. Khan argued that the 1990 agreement signed by then deputy prime minister Haslyn Parris stated at paragraph 2B: "Viceroy Shipping Ltd (the transshipment operator and ocean carrier), subject to its dredging the loading pit and its approaches to the channel, will be given exclusive use of the said loading pit for a period of ten years from the first transshipment of bauxite from Aroaima to the Ocean Carrier."
The agreement signed by the Prime Minister as recommended by the Head of the Privatisation Unit, Winston Brassington, and against the advice of BIDCO, amended paragraph 2B to read: "Viceroy Shipping Limited (the transshipment operator and ocean carrier), is hereby given exclusive use of the Basin, Mooring System, Turning Circle and JP Knight is given exclusive use of the Barge Staging Area for the calendar year 2002 and, if ABC exercises its option for the calendar year 2003, for that year as well."
Khan said that ABC, then a joint venture between Alcoa and the Guyana government, and not Viceroy dredged the loading pit or loading basin and the approaches to the channel and questioned the basis for granting Viceroy exclusive use of the loading basin.
Meanwhile, Prime Minister Hinds has told Stabroek News that he expects the matter to be resolved shortly. He disclosed that Viceroy had made a proposal to BIDCO that would allow third party use of the loading basin, which it had considered, amended and passed to the Bermine board. He said that the Bermine board had also suggested some further amendments and expected that the proposal would be ratified shortly.