RUSAL's plan to upgrade bauxite operations here raises other key issues

RUSAL’s plan to upgrade bauxite operations here raises other key issues

Jun 16, 2021 Letters

DEAR EDITOR,

True, the main public reaction to RUSAL’s recently touted plan to upgrade its bauxite-mining operations in Guyana would dwell on the company’s contempt for good labour practices and its workers, and on its arrogance in relating to the government (SN Editorial, June 15). We should, however, use this opportunity to resolve a few other company-specific concerns and to adjust our general mining policy.
Those specific to the company include: (i) The profitability of its Guyana operations. In a 2019 assessment report (BCGI BAUXITE: Prospects on World Market), the company declared its Guyana bauxite ore to be uncompetitive due to its average quality, high production and freight costs, and the availability of other sources of supply. If, indeed, the company plans to renew investments in BCGI, then its 2019 report evidently left out the upsides. Regardless, the country needs to conduct its own expert review; (ii) Royalty payments. While the government’s 10 percent equity in BCGI gets it only a token board seat, how much of the 1.5 percent royalty on bauxite production has the company paid? (iii) To what extent is the government capable of tracking the quality, volume, and market value of the bauxite that the company ships out? The company uses most of Guyana’s bauxite to feed its own alumina plants. Guyana has to grasp the implications of such in-house arrangements; and (iv) What is the status of the company’s compliance with the Extractive Industry Transparency Initiative (GYEITI)?
As regard general mining policy in the non-oil extractive industry, (i) some of the zeal on local content (LC) and corporate social responsibility (CSR) we apply to the oil companies should be applied to all large mining companies. While, historically, the large gold operations in Guyana have been more attuned to these responsibilities, their bauxite cousins (with the likely exception of the small First Bauxite Inc.) have been far stingier. In any case, the hard-minerals mining companies –especially given the fact that they operate within or close to communities–should be held to well-defined LC and CSR accords, crafted with the input of local stakeholders; and (ii) the SN editorial astutely touches on the recent inclusion of bauxite on the European Commission’s Critical Raw Materials list. The U.S. also has its list of such critical and strategic minerals. In Guyana, it has been recommended recently (but totally missed or ignored) that we should conduct a thorough mineral resource assessment of these minerals and produce special policies (with a distinct investment regime) for their exploration and extraction.
Lastly, with growing oil wealth, the practice of generously giving away large mining concessions just to provide limited employment can now be revised.

Sincerely,
Sherwood Lowe