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The Peeper has been advised to go to school

Dec 08, 2008 Features / Columnists, Peeping Tom

The recent announcement of the possibility of a US$1B investment in the bauxite industry led the Peeper to believe that Guyana was aiming at more than just a plant to extract alumina from our bauxite.

After all, a US$1B alumina plant is a hell of a big plant to be built in a country where there are high extraction costs for bauxite.

There was a panic reaction to the Peeper’s article expressing skepticism about any facility, whether for processing alumina or for the making of aluminum. The message was conveyed – yes, it was conveyed — that the Peeper needed to go back to school.

I felt good about that advice. I am now in good company. I remember a similar sentiment was expressed by someone to Yesu Persaud, and we all know who it was that ended up having to be corrected.

I do confess, however, to being carried away when I learnt that what was being contemplated was a US$1B investment. Surely, I could not be faulted for believing that this had to be an aluminum smelter, rather than just an alumina refinery.

After all, why would Guyana need a US$1B alumina plant when, just a few years ago, the Government of Trinidad and Tobago indicated an intention to spend the same amount of money to build a massive smelter to make aluminum?

For the benefit of readers — and I daresay those who feel that the Peeper needs to go back to school — I need to explain the process of making aluminum.

It begins with the sorting and crushing of bauxite to extract the alumina. This is then followed by a chemical process which is energy-intensive and which leads to the extraction of the alumina.

I want to give an example of just how energy-intensive is the demand for energy, even for an alumina plant. 
According to the RUSAL website, the largest alumina plant in Europe was built at a cost of US$1B and processes about 1.8 million tons of alumina each year. Just to supply that plant with power, a 150MW power plant had to be built.

Even if Amalia Falls comes on stream — I very much doubt it will within a short period of time — this hydroelectric project, and the power it is capable of supplying, will not provide adequate comfort for investing in an alumina plant. A great deal of reserve power is needed for such a plant, and this source of power needs to be cheap to allow the plant to be competitive.

ALCOA never bothered to go ahead with building an alumina plant, even though this was touted.
Why would BOSAI find it feasible to do so? Given China’s enormous industrial capability and its quest for resources to sustain its booming economic growth, I do not think it is likely that it will be feasible to build an alumina plant in Guyana.

To move from alumina to aluminum also requires a chemical process of smelting, and this demands endless power, which is beyond the capacity of any Amalia Falls project. Therefore, whichever way we look at it, I do not envisage, in my lifetime, Guyana having an alumina or aluminum plant.

My concern, however, is: just suppose some miracle happens and an alumina plant is built by BOSAI. Just who benefits from this investment?

Yes, we are told that it will create jobs. Was this not what we were told in relation to ALCOA, AROAIMA, RUSAL, OMAI and now BOSAI?

Even with these jobs, how many persons benefit? And how many will benefit from a capital-intensive alumina plant in Guyana?

Guyana needs jobs, yes, and investment brings jobs; but foremost, Guyana needs to gain value for its natural resources.

My questions have not yet been answered as to what deal has been made concerning our bauxite mines.
Is BOSAI free to extract ore? If so, what royalties are we being paid? And if and when the alumina plant is established, what happens to the alumina? Surely it cannot stay in Guyana, because it has to be sent overseas to be smelted. 

Perhaps by the time the alumina plant is built, there may be a proposal to build a smelter.
But apart from the jobs that will be created, how do Guyanese benefit from such a facility, unless we get a good price for the ore that is within the mines?

Are we getting a good price for this ore? Or does the Peeper need to go to school to find this out, too?

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