Cambior presents Linmine feasibility study
Stabroek News
March 30, 2003
Cambior's planned takeover of the Linden Mining Enterprise (Linmine) took a step forward when its president Louis Gignac made a presentation on the feasibility study on the company's operations last weekend to President Bharrat Jagdeo and a number of advisers.
The advisers included Prime Minister Sam Hinds, BIDCO chairman Ron Webster and Privatisation Unit head, Winston Brassington.
The study covered the environmental impact assessment of the operations under Cambior that was conducted by the Canada-based company, Senes Consultants. Other areas such as mining and reserves issues were studied by a number of other companies. Cambior commissioned the study as part of the privatisation process in which it will acquire an 80 per cent stake in the cash-strapped state-owned bauxite company. Under the preliminary agreement signed with the government, Cambior is to inject US$10M and to arrange for a further US$20M to be raised together with the government from the World Bank and other commercial financial institutions. Cambior has already begun the negotiations with the International Financial Corporation and these negotiations are scheduled for completion by the end of May.
Meanwhile, New York-based financial consultant and former treasurer of the state-owned entity, P Q De Freitas, has withdrawn from the team negotiating with Cambior on behalf of the government. President Jagdeo appointed him a member of the three-man negotiating team after his nomination by late PNCR leader, Desmond Hoyte. The other members of the team are Brassington and Budget Adviser to the Ministry of Finance, Winston Jordan.
De Freitas claims that he had been excluded from the talks with Cambior since June and was not contacted till February of this year by Brassington inviting him to continue "for probably another three months" in the negotiations with Cambior.
De Freitas declined and withdrew from the team after he said Brassington had told him that he had to balance the cost of sending the information he requested on the agreements reached during the eight months he had not been involved in the discussions. De Freitas argued that if he rejoined the team he would be approving the agreements reached during his period of non-participation and accordingly asked that he be provided with those agreements.
In his resignation letter to Jagdeo, De Freitas said that when he was appointed to the negotiating team, "neither he [Hoyte] nor I expected Mr Brassington to limit my access to information regarding the privatisation of the company."
He said that Brassington's actions were inconsistent with President Jagdeo's commitment to transparency he made to Hoyte.
He claimed that as a result of the agreement Cambior now had de facto control of Linmine without having paid the government a cent for the company. He also alleged that Linmine was leasing equipment from Omai Gold Mines Ltd.
Stabroek News has been unable to contact Brassington despite several calls to his office for a comment on the issues raised in De Freitas' letter. However, a source close to Cambior denied the allegation, pointing out that no decisions relating to the privatisation had been taken. All the decisions taken with regard to Linmine are related to downsizing the operations prior to the Cambior takeover.
About the joint management committee now in place, which comprises equal representation from Linmine and Cambior, the source said the objective was to ensure that the Linmine operations continued to service customers. The joint committee was established this year and has so far had three meetings.
About the leasing of the Omai equipment, the source said this was far from accurate, explaining that because of the unreliability of the Linden Power Company in providing Linmine operations with power to operate its dragline and bucket wheel excavators, Omai was contracted to strip the ore. This is the third tine in three years that Omai has been hired to undertake these operations, which it does more cheaply than Linmine itself can do it.
About the power situation, the source said that Cambior was looking at the other options available to it, including generating its own power. The other viable option is a joint venture with the Linden Power Company but the source said that going down that route has its problems as the power company was in receivership.
