Rusal (Guyana) announces cost cutting measures

May 31, 2009 News

As fresh wages negotiation start

The Bauxite Company of Guyana Inc. (BCGI), part of RUSAL, has announced key cost cutting measures to keep operations afloat in the face of the global economic downturn and the need to increase competitiveness in the industry.
BCGI, on Friday, said that the company plans to optimise fuel consumption and electricity generation, reduce bauxite transportation costs and fully shift to direct supplies of diesel fuel and fuel oil.
The announcement comes just after the end of strike action at the company’s operations at Aroaima in the Berbice River.

General Secretary (ag) of the Guyana Bauxite and General Workers Union, Leslie Gonsalves, told Kaieteur News that the agreement reached with the company allowed for full resumption of work on Thursday, by the some 300 workers who went on strike on May 23.
With the agreement, comes the start of new wages negotiations, Gonsalves said.
The company has also agreed to fix the air-condition units of seven trucks (the issue that triggered the strike action) and also provide a vehicle for emergency transportation from Bissuruni, which lies approximately 16 miles from the hospital at Kwakwani.
Rusal, the world’s largest aluminium and alumina producer, started operations in Guyana in 2004. The company said its cost cutting programme was necessary, given the challenges facing the sector.
In the first quarter of this year, bauxite mining was reduced by 34.2 per cent as compared to last year, totaling three million tonnes.

Bauxite mining is planned to be reduced by 5.6 million tonnes by the end of the year.
The cost cutting measures, Rusal said, is aimed at strengthening the company’s position as the most effective aluminium producer in the economic slowdown.
For the first quarter of this year, the actual cash cost to produce one tonne of bauxite in Guyana was reduced by 33.7 per cent compared to a cut of 20.5 percent last year.
The company did not specify the amount of money that was saved from these cost cutting measures, and officials of the company have not returned calls for clarification.
BCGI said such “significant results” in terms of cash cost reduction were achieved due to the actions developed by the production facility within the programme.
These actions included a mining plan, and also meant optimising the service of contractors, equipment and fuel deliveries (through river transportation).

In addition, excessive vehicles were taken out of operation and mothballed.
Rusal hopes to save US$1.1 billion this year through cost cutting measures at all of its operations worldwide. The company accounts for approximately 12 to15 percent of the global production of aluminium and alumina.
Rusal, said that the support of trade unions and their co-operation will allow the company “to live through these hard times with minimum losses, and become one the first businesses to recover from the world financial crisis keeping its production capacities and competitive advantages in place.”