Linden bauxite developments

Sep 25, 2023 Letters

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DEAR EDITOR, 

Kaieteur News – As someone with an abiding interest in the Guyana bauxite industry over the past 58 years and particularly developments in the Linden operations which, after 31 years (1971-2002) under state control, was privatized, I have reached the point where I am totally confused over some of the information in the domestic, and in some cases foreign media, on developments in that sector of the industry. I would not bore you with some of the developments in the immediate privatization era but would like to focus on developments over the past five years, four of which are slated as the start of the developments culminating in the recent commissioning ceremony for Bosai’s #15 kiln,  Maz  Metallurgical Bauxite project.

While my experience over the years has taught me to be skeptical about reports on data and information in both domestic and some foreign media on bauxite in Guyana, I just cannot resist commenting on some of the glaring inaccurate, misinformed, incoherent inconsistent and questionable data and information in some of the articles relating to the commissioning of the #15 kiln and Maz project.

What bothers me is that these articles appear in the international media  and I wonder what readers  with some knowledge of the industry think of us, and worse that  our Government ministers, State officials  and Advisors to the President and Cabinet who ought to have reasonable detailed and accurate information on the industry  appear to accept, without question, and I assume do not point out the anomalies to their superiors, leaving them to formulate policy and make important decisions based on flawed  data and information. While I admit that some of it may be  just typographical errors,  much of it appear to be paucity of knowledge about basic information on the industry and inability to comprehend what is often being said by various speakers.

First, I would like to comment on the Guyana Times October 6, 2018 article “Bosai to establish new kiln, and dryer; to resuscitate Linden aluminum plant”, which the company’s secretary, is reported to have stated at a recent meeting with representatives of the Regional Democratic Council (RDC).

While I am aware that I would be accused of nit picking, and cannot be sure if what is reported is what he actually said, it pains me to think that the Secretary of Bosai would describe the plant we had at Mackenzie for 60 years as an aluminum plant; what we have at Mackenzie is an alumina plant (technically defined as an alumina refinery), which converts bauxite to alumina, (Al2O3). a distinction that is significant in the context of the General Manager of Bosai reportedly, following suit, proposing to build a US$470 million aluminum plant.(I assume alumina refinery) in Linden, a proposal  lauded by all present as genuine.

The term aluminum plant is often loosely used to describe plants that convert alumina to aluminum metal (aluminum smelters) and plants that utilize aluminum metal in downstream activities to produce a wide range of products by a large number of processes some of which could be separate or integrated with the smelter.

What is significant is the General Manager of Bosai now proposing to build a US$470 million aluminum plant when that same company, in November 2008, entered into an agreement with the Government to build an alumina refinery (1000,000 tpy considered  at the time) and an aluminum smelter, but  finally ended up with a study for a 500,000 tpy refinery in its 2010 report “500ktla alumina project–Feasibiliy of Research”, which concluded that a 500,000 tpy alumina refinery costing  US$483.5 million was not financially viable, due, inter alia, to its small scale.

While I agree that plant parameters may have changed since the time of that study, I doubt they could now deliver a viable alumina refinery any time between now and 2030 for US$470 million – authentic studies revealing capital cost for new alumina refinery projects even before the global inflation era, exceeding US$1,000 per tonne of installed capacity.

After reading what I assume are the interpretations of the diverse media reporters on the commissioning ceremony, I decided to revert to the March 2, 2019 Guyana Times article headed “Bosai to invest US$23M on expansion plan” referred to by the Bosai General Manager during a visit by then Minister of Natural Resources and a South African delegation as the starting point for the developments being celebrated.

The article reads, inter alia: “A whopping US$23 million investment by the Chinese-owned Bosai Minerals Group Guyana Inc,  with US$20 million  for the new #15 calcine kiln  and US$3 million for the #16 dryer for the production of Sized Chemical Grade Bauxite and adding that the company had ownership of 200 million tonnes high alumina, low iron bauxite and currently was producing 1.5 million tonnes Metallurgical grade bauxite (MAZ), 300,000 tonnes Refractory A Grade Super Calcined bauxite (RASC), 200,000 tonnes Sized Chemical grade bauxite (SBGB) and 200,000 tonnes  Cement grade bauxite (CGB), making it the largest supplier of Calcined bauxite on the world market.

My first reaction to the investment of US$ 20 million for a new calcine kiln was that that amount was inadequate especially since I had seen in a Guyana Tines article of  August 7, 2012  “Bosai investing US$100M in Guyana operations”,  US$ 57 million quoted  as the cost of the same  kiln.

I was, however alarmed to see from the various media reports on the commissioning ceremony that this US$20 million  kiln had apparently metamorphosed to US$120 million which I hope was not just a typographical error. I was, further surprised at the statement by the General Manager of Bosai that the company had ownership of over 200, million,tonnes  high alumina, low iron bauxite  ( which  appear to include Block 37).

I have not been able, so far, to find anywhere, documentary evidence of them having ownership of that quantity of reserves or that Block 37 which was reclaimed by the Government was returned to them.  With regard to the current  production numbers cited, nowhere had I  seen nor was able to verify from sources within the industry, shipping circles and reputable reporting agencies on bauxite exports that the company was producing, and I assume shipping, that quantity of  Metallurgical bauxite or producing and shipping the stated  quantities of RASC, SCGB or CGB,

I was then shocked when I read the Guyana  Chronicle’ version  of the same date and reporting on the same event, headlined “BOSAI for major expansion” and quoting their General Manager,,  stating, inter alia, that the company raked in US $3B in 2018, with production of the various bauxite ores reaching over 100,000 tonnes. If the stated value of the products, US$3 billion, and the quantity over 100,000 tonne (say150,000 tonnes) reported, correctly reflected what yhe General Manager  actually said  I  am surprised that the Minister and his South African guests did not  need  calculators to spot a probable discrepancy since the result would be US$20,000 per tonne and  even if the stated  over 100,000  was 1,000,000 tonnes of their highest priced product, RASC ,which sells at over US$400, per tonne,  they could not rake in US$3 billion.

I  would now set out to highlight and cffer some comments on some of the more glaring misinformation in the reports on the Commission Ceremony for the Bosai #15 kiln and Haz project;

The 8 July 2023  Stabroek News article  headlined “Bosai launches US$120m kiln, Maz project, 500 jobs on offer“ reporting on the Commissioning Ceremony speaks to the US$120m #15 kiln, Metallurgical Grade Bauxite Maz Project,  ,a construct that could  be interpreted as the US$120 million applied to the #15 kiln  and Maz project. The Guyana Chronicle headline of the same date, reporting on the same events, however, speaks to the US$120  #15 kiln, and US$115 million Maz projects which clearly attaches US$120 million to the kiln and  US $$115 million  to  the Maz project. This article, then proceeds  to provide some conflicting and confusing production, export and earning numbers –bauxite production increasing from 608,000 tonnes in 2020 to 705,000 tonnes in 2022, with exports averaging more than 600,000 tonnes. and export earnings  of US$98.9 million.  while, referring  to the Guyana Times  article of  8 July 2023  reporting  President  Ali reporting their production to date  of 112,000 tonnes and  target for 2023 at  over 470,000” which  conflicts  with the claims of massive increases in production. .Since, however, there appears to be no disaggregation of the products in the actual production and target numbers, I am not sure it would be easy to determine whether the target has been achieved. I surmise that the production number cited by the President applied to RASC only, while the target  applied to the full range of products, in which case, with the new kiln  increasing RASC  production 1.5 times as predicted, and the other products already and continuing to be produced, it should not be difficult for the modest target to be achieved.

The Guyana Times of the same date, reporting on the same event  under the headline “Chinese company invests US$115 M to improve bauxite production ” expanded the headline with details of the investment, inter alia: launching the construction of its mass project, an initiative that will see the company bringing in even more high-powered equipment such as a bulldozer and other mobile devices; expanding the ship-loading port; setting up a new transshipment platform in Georgetown; installing a conveyor belt –90 kilometers from the mining site to the port – an investment that is pegged to generate approximately US$200 million annually;  statements all supporting the view that the US$ 115 million applies to the  (mass)  Maz   project only with the US $120 million stated earlier applicable to #15 kiln.

However, I could not contemplate a  90 kilometer (55 miles) conveyor belt  since my knowledge of the identified  Linden and Ituni bauxite deposits do not show any deposits  90 klometers from Linden; while I  am tempted to treat this as a typographical error (9 kilometers) I am prepared to concede that Bosai may have identified new deposits that distance from Linden.

I  then read  Vanessa Brathwaite’s article in the publication Info  The truth in Black and White of July 7 2023 headed “400 jobs to be created from BOSAI’s US$150M kiln #15 and Maz project”. I was unable to find any reference to the source  of the US$150 million  since it does not feature in any of the other reports I  have seen, hence  I  assume she may have gotten it from a  source other than the Bosai officials at the Commissioning Ceremony. With regard to the ridiculous nine millimeter (.35 inch) conveyor, my first reaction was to treat it as a typographical error which I thought she should have detected on editing her article before publication, or seek a correction after it was published, however, on reflection I thought it could perhaps be a demonstration of someone with zero knowledge of the metric measurement system.                                                                                                                                                             I then stumbled on the News Room article of  July 7, 2003 headed “More jobs, accelerated bauxite production as BOSAI commissions US$115M kiln” and proceeds to provide some details on the US $115 mass project, citing:

Addition of 42 100-pound mining trucks and nine 50 tonnes bulldozers together with other mobile devices, doubling the existing fleet.

Planned expansion of ports for ship loading with the addition of two docks to the existing facilities.

Setting up a transshipment system equipped with four 10,000 tonnes newly built vessels.

Once in operation, the facility is expected to generate an output value of US$200 million per annum, equivalent to twice the current level.

I find it difficult to reconcile some of the information in this article. First I cannot understand the need for 42, 100 pounds (I assume tonnes) mining trucks the number of which I assume is a typographic error.  I also cannot reconcile the need for an additional  nine 50 tonne bulldozers in the mining operation since my limited knowledge of mining equipment in the Linden mines  does not reveal bulldozers as a major component of the stripping and mining fleet,  but again I cannot question the Chinese who may have developed new mining technologies, I am also intrigued  by the concept of the establishment of a transshipment platform in Georgetown  which obviously aims at facilitating the loading of larger ships for the economic transport of low value metallurgical bauxite for which the Bosai Group has become a major supplier to the bourgeoning Chinese aluminum industry, buying  over 1 million tonnes per year  from Gulf Enerates Alumina in Guinea and recently shipping 1.6 million tonnes from their subsidiary.

Bosai majority owned and managed operation in Ghana, now planning to export Maz from Guyana, having lost their major source of sweetening trihydrate bauxite in Ghana. I have no authentic information on the prospective destination of the Maz shipments, but assuming it is China, I am concerned that the shipment sizes and consequent freight savings they anticipate would not attract a profitable FOB price to realize the additional export earnings they project; but again I assume Bosai has or will soon undertake the appropriate studies to determine the feasibility of their Maz project.

Upon reviewing the various reports listed above and other reports which, according to Bosai, involve “plans for the need to forge and to reinforce new ideas and develop new products”, I attempted the following summary of the formidable list of projects anticipated:

-A bulldozer and other mobile devices to double the existing fleet

-Purchase of 42 100 pound (I assume 2 or 4 100 tonne) mining trucks.

-Acquisition of nine 50 tonne bulldozers.

-Expanding the ship-loading facility at Linden with the addition of two loading ports.

-Setting up a new transshipment platform in Georgetown.

-Construction of four 10,000 vessels (I assume barges).

-Installation of a conveyor belt,  90 kilometres  (I surmise 9 kilometers)  from the mining site to the port .

-A 12 megawatt (MW) solar power project to provide stable energy for their own. Operations.

-Construction of a US$470 million aluminum plant,(I assume alumina refinery) .

While there is little information on the scale and cost of  most of the projects and the possible time frame for their implementation, the provisions for the Maz project suggest a substantial volume: four 10,000 barges delivering 40,000 tonnes per week to the Georgetown transshipment platform to fill 40,000 vessels would result in 2 mtpy.

Production of that volume  Maz  would certainly necessitate the development of a new mine  which, with their inference to ownership of Block 37, (inferred), down -playing Tiger Jump  estimated at a minimum 50 million tonnes, other substantial adjacent deposits and remnants, and the 9 kilometer (assumed) conveyor  sounds suspiciously like Block 37  as the source  of the Maz project, with  a non viable  alumina refinery (aluminum plant) which may never be built, thrown in, as a sweetener to seal the deal.

I hope the Guyana Government would maintain its position on Block 37 as a reserve for a minimum 1 mtpy alumina refinery which could be an industry priority for an early 2030s commissioning. In the event the financial viability of the Maz project is established and endorsed by the Government, there are other virgin and remnant deposits with the same chemical and mineralogical properties as Block 37, with the advantage of lower overburden:ore ratios, on both  East and West Bank Linden  containing  adequate reserves to sustain  even a 2 mtpy project for over 50 years.

Regards,
Sylvester Carmichael

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• developments, Guyana, Metallurgical Bauxite, Regional Democratic, the General Manager

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