The Bosai alumina refinery feasibility study

Feb 16, 2011 Letters

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Dear Editor,
It should be recalled that President Jagdeo amazed the nation and the mineral world with his November 2008 announcement of an agreement with BOSAI for a US$1.00Bn investment, premised on the construction of a 1.0 million tonne per year Alumina Refinery, to be followed by a 500,000 tonne per year Aluminum Smelter.
These were to use the alumina from the Refinery and a Hydro Power Facility to provide power for the Smelter.
The construction of the Alumina Refinery was a condition for the holding of the Block 37 Bauxite Deposit at Linden, categorized as the single largest deposit in the world of high grade Gibbsite  bauxite, capable of sustaining a 1.0 million tonne per annum Alumina Refinery for a period of more than forty years.
BOSAI should have completed the Feasibility Study within two months of the signing of the agreement, i.e. January 2009.That date was shifted, according to the Prime Minister, to the middle of 2009 and later to September of 2009.
At last, the long-awaited Bosai Linden Alumina Refinery Feasibility Study has been completed and, according to Prime Minister Hinds, the conclusion is an unequivocal “not feasible”.
The PM should not be surprised by this since, apart from the fact that BOSAI has no track record or known experience in the operation of Alumina Refineries, there was every reason to be skeptical that a company boasting total assets of US$350.0Mn, at the time, would have the capability to raise the finance needed for projects of the magnitude it proposed.
It would be of interest if the Prime Minister could inform the nation which of the experienced Aluminium Consultants conducted the Feasibility Study for BOSAI and which Consultant was retained by the Government of Guyana to evaluate the findings of the Study.
It would be of greater service if he could make the Study available for independent scrutiny and evaluation.
What is surprising is that, according to the PM, Bosai has advanced the perennial thread-worn reasons for backing out from the project— high stripping cost and high freight cost. BOSAI did not need a costly feasibility study to arrive at that conclusion since it would be a great surprise if the PM did not tell them that during the first 15 minutes of his first meeting with them, — straight out of J.N Fraser’s Demba1960s catechism which he so gullably imbibed, to the extent that it has become part of his DNA.
The PM seems to have forgotten that Alumina was previously produced and shipped from Linden, to Aluminium Smelters around the world, including to Canada, United States, Norway, Germany, United Kingdom, USSR, and even China.    .
Any credible Feasibility Study should have taken account of the reality that the Gibbsite bauxite in Block 37 is one of the cheapest to process into alumina. That is why Guyana’s metallurgical bauxite was sold at a premium worldwide, as a “sweetener” for Alumina Refineries.
In addition, there have been significant developments in the technologies used for the stripping and mining of bauxite, as well as for the dredging of river channels, apart from the tremendous advances in the technologies used for the processing and shipping of alumina worldwide.
In any event, since BOSAI promised to build a 500,000 tonne per year Aluminium Smelter, there would be no need to ship alumina once the smelter becomes a reality.
It may be of interest to the PM and the Government to note that BOSAI promised, upon the acquisition in 2010 of an 80 per cent stake in
Ghana Bauxite Company, to build: a 1.0 million tonne per year Alumina Refinery by 2013; a 200,000 tonne per year aluminum smelter; and the possible expansion of Ghana’s hydro-power capacity.
The only difference is that the company plans to ship 500,000 tonnes per year of raw bauxite to China. It would not be surprising if Bosai makes a proposal to the Government of Guyana, in the near future, to ship Block 37 bauxite to supplement its dwindling resources in China or to sweeten the extraction of alumina from the low grade bauxite they would be forced to buy from other sources for their Alumina Refineries.
Now that BOSAI has apparently abandoned its grand plan for an Alumina Refinery, and consequently an Aluminum Smelter and hydro-power facility in Guyana, I expect that the Guyana Government would have the courage to revoke BOSAI’s exclusive exploration rights to Block 37 and give the opportunity to another interested company to have a shot at a credible feasibility study for an Alumina Refinery, based on that and the adjacent deposits.
E. Lance Carberry, MP
PNCR-1G Shadow Minister for Natural Resources

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