PNCR calls for urgent review of BOSAI’s exploration rights

Feb 17, 2011 News

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Amidst an announcement late last month that BOSAI had abandoned efforts to built an alumina refinery and smelter in Linden, calls have been made for Government to urgently revoke the company’s exclusive exploration rights.
In a strongly worded statement yesterday, Member of Parliament of the People’s National Congress Reform (PNCR), Lance Carberry, also believed that the possibilities exist for another company to capitalize on a “credible” feasibility study.
During his budget presentation late last month, Prime Minister Samuel Hinds, whose portfolios include the mining and minerals extraction, said that the feasibility study did not find favour in the construction of alumina plant.
According to Hinds, the report had cited high stripping and freight costs as the prohibitive factors.
Feasibility study?
Carberry questioned the credibility of the report, especially with regards to any possible evaluation by Guyana.
“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 (Hinds) could make the study available for independent scrutiny and evaluation.”
He also found surprising, the reasons cited by the PM.
“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.”
According to Carberry, the construction of the alumina refinery was a condition for the holding of the Block 37 Bauxite Deposit at Linden, categorised as the single largest deposit in the world of high grade Gibbsite  bauxite, capable of sustaining a 1M tonnes per annum alumina refinery for a period of more than 40 years.
Promises
“It should be recalled that President (Bharrat) Jagdeo amazed the nation and the mineral world with his November 2008 announcement of an agreement with BOSAI for a US$1B 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 aluminium smelter.”
The smelter would have used the alumina from the refinery and a hydro-power facility to provide power for the smelter.
“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.”
According to Carberry, it is now known, through the PM, after more than two years, that the feasibility study has been completed but it is an unequivocal “not feasible”.
No track record
According to the MP, who is the PNCR Shadow Minister for Natural Resources, 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$350M, at the time, would have the capability to raise the finance needed for projects of the magnitude it proposed.”
He noted that Hinds, a senior official in the Linden bauxite company in the 80’s, seems to have forgotten that alumina was previously produced and shipped from Linden, to aluminium smelters around the world, including 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,” Carberry said in his arguments.
New technologies
The MP pointed out that 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 one million tonne per year alumina refinery by 2013; a 200,000 tonnes per year aluminium smelter; and the possible expansion of Ghana’s hydro-power capacity.”
According to Carberry, 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.”
According to the official, now that BOSAI has “apparently abandoned its grand plan” for an alumina refinery, and consequently an aluminium smelter and hydro-power facility in Guyana, he is of the expectation that government would have the courage to revoke BOSAI’s exclusive exploration rights to Block 37.
“…And given 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.”

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