Govt also wants 'amicable solution' to bauxite deal
Stabroek News
February 6, 2007
The government is also seeking "an amicable and honourable solution" to the proposed sale by IAMGOLD of its 70% stake in Omai Bauxite Mining Inc (OBMI) and Omai Services Inc (OSI), a press release from the Office of the Prime Minister said yesterday.
However, the press release asserted that the government "found some representations erroneous" in a report on the proposed sale of OBMI and OSI, as released by OBMI on Friday.
The two-paragraph press release from the Prime Minister's Office ends: "The government also hopes for an amicable and honourable solution in the interest of OBMI and Guyana."
The government owns 30% of OBMI and has the right of first refusal in any sale of the company; and is expected to exercise or waive that right by Monday, as IAMGOLD moves to sell its stake to a Chinese company. IAMGOLD in December 2006, entered into a sale agreement with Bosai Minerals Group Co Ltd of China for US$46 million, for the 70% stake.
In its press release, IAMGOLD said it will incur over US$30 million in losses after a deal is concluded to sell the 70% stake of OBMI to Bosai.
The OBMI release said, "OBMI acquired a financially troubled operation at Linden. Subsequently, OBMI invested approximately US$70 million in plant and working capital in this operation, which continues to incur operational losses."
OBMI which was previously owned by Cambior Inc, was bought in November 2006 by gold producing giant IAMGOLD.
"IAMGOLD has advised the government that its primary expertise and focus is on the development of its gold assets in Guyana. IAMGOLD is prepared to commit further resources to the development of those assets. IAMGOLD, however, has no interest in funding the continued operations of the bauxite assets held through OBMI," the release said.
President Bharrat Jagdeo over the past week in Russia, met officials of RUSAL, a Russian aluminium company with operations in Guyana, to discuss its plans for an alumina plant here. Even as the President was preparing to leave Guyana for Russia, a Bosai team was in Guyana to seal the proposed deal with IAMGOLD. But the government asked for an extension until February 12, after failing to meet an earlier deadline of January 22. The Bosai team left on January 27, and is now awaiting the government's response.