Russian $billion search for bauxite

What took place

From Russia with love. The Russians would love to find bauxite and as such they are conducting a feasibility study for a multi-billion dollar investment in the bauxite industry in Guyana.

Guyanese President Bharrat Jagdeo said that the Russian aluminum giant RUSAL began drilling at Bamia in Linden, for a bauxite study. He expressed optimism that the drilling would be successful and Guyana would have the much needed investment.

“The feasibility study for the aluminum plant has started. If this is feasible after their (RUSAL) work, we would have a US$1B investment, the biggest ever in the history of our country, here in Linden. They now have to prove that the reserve is there and the depth of the overburden etc,” the President said.

The feasibility study is being conducted by the company for the construction of a US$100M alumina plant.

The Government of Guyana and RUSAL have signed a US$80M agreement for the privatisation of the Aroaima Mining Company (AMC) in the Berbice River.

One of the features of the agreement is the sale of more than two million tonnes of bauxite to the company over the next 20 years.

RUSAL will formally take over the operations from March 30, 2006 and the company will be investing US$60M of the US$80M in facilities for shipping and barging bauxite.

The privatisation deal provides for the transfer of the bauxite business and some assets from AMC to RUSAL.

The Guyana Government will retain 10 per cent of the holdings.

Editorial views

The media cautioned that there must not be over optimism particularly during this, the initial phase of the project. They warned that one ought not to build up too much hope or anticipate hefty financial returns during the feasibility study. They pointed out that the study is just as it states – a feasibility study.

If it proves successful, then there could be reason for rejoicing. But even then it must be tempered with good sense, the media advised.