An alumina refinery in Guyana moved one step closer to reality with the signing of a Heads of Agreement between Bosai Minerals Group and the Guyana Government yesterday.
The signing clears the way for the way for Bosai to continue to pursue and conclude the feasibility study at a greater level of detail and to determine the financial and economic attractiveness of establishing the one-million-tonne per year alumina plant in the bauxite mining town of Linden.
Minister of Finance, Dr Ashni Singh (left) and Managing Director of Bosai, Zhilun Yuan exchange documents after the Heads of Agreement signing ceremony yesterday. At extreme left, seated is President Bharrat Jagdeo.
The US$1 billion project represents the single largest investment in Guyana and is a joint venture between Bosai Minerals Group and the Guyana Government. The name of the project will be the Guyana Alumina Incorporated with the government owning 11% of the shares and Bosai 89%.
Minister of Finance, Dr Ashni Singh and Managing Director of Bosai, Zhilun Yuan signed the agreement in the presence of President Bharrat Jagdeo, Prime Minister Samuel Hinds, other government officials and representatives of Bosai and the Chinese government at Duke Lodge in Kingston yesterday.
Giving an overview of the project, Bosai Manager of International Projects, Jing Kun Fang recalled that in January last, a delegation from the company made the proposal to the government to build an alumina refinery in Linden. He noted that the major objective of the proposal was to have a joint venture between the Guyana Government and Bosai to carry out a substantial alumina refinery operation and government’s response to the proposal was “very positive”.
Jing noted that the feasibility study has to be completed by Bosai and approved by the government and this is expected to be completed in June 2009. Construction is expected to start no later than the end of 2009 or any other date agreed to by the parties, he said, while noting that this was a difficult time for any project of this size so “we want to have some flexibility for construction starting date.”
Construction is expected to take no more than three years and the Bosai International Projects Manager said that during construction about 700 workers would be needed. On completion, the facility would need 1,000 permanent employees for normal operations. For the first ten years, the venture would be exempted from corporation tax.
President Jagdeo, in his feature address noted that there was quite a lot of work to be done before construction began. He said parts of the feasibility study still had to be completed and urged that the moment be recognized for its importance. He expressed his pleasure at the project.
Meanwhile, Zhilun in his remarks said that the company not only wanted to continue its success in the calcined bauxite business but to expand activities in other alumina areas. “The alumina project is our first step in this direction and this signing ceremony marks the first important milestone,” he said, adding that he believed the project would be successful if the Guyana Government and Bosai continued to work closely together to achieve common goals and “if the world economic climate returns to previous levels”.
Stating that Bosai has committed to other long-term development projects in the country, Zhilun said that in addition to the alumina project, Bosai plans to expand Bosai Minerals Group (Guyana) Inc calcined bauxite production capacity within one or two years by adding a third kiln. This kiln, kiln 15, will increase the annual capacity by 50%, from 300,000 tonnes to 450,000 tonnes, he stated.
The Managing Director said that mining capacity will also need to be expanded and if the company continues to gain market share, a fourth kiln will be installed. He asserted that in order to improve the company’s competitive advantage, more Chinese mobile equipment will be brought into service for the expansion process. “We believe the high performance and low cost of the Chinese equipment are key to increasing mining efficiency and to reduce production costs,” he declared.
Additionally, he said, Bosai planned to investigate the possibility of starting mullite production to further diversify the refractory business. “Finally, if cheap hydropower becomes available to Guyana, we plan to expand into down-stream processing of alumina products. One possibility is to produce white-fused alumina and the other is to build an aluminium smelter,” Zhilun said.
He stated that a positive development towards hydropower in Guyana has been seen recently and the Amalia Falls hydro project is making progress. He remarked that at a meeting with the Prime Minister, the possibility of using the extra power of Amalia Falls was discussed. “Guyana is not only rich in bauxite but also in hydro-resources and cheap power should be possible if the resources are fully utilized,” he commented.
Bosai Company Secretary, Norman McLean, referring to the global financial crisis said that it would impact on the ability to execute the project in a timely manner but Bosai has demonstrated a very positive attitude to it. He noted that signing of the agreement will concretize interest expressed by both sides.
Work on the feasibility study is ongoing and it was stated that the majority of the capital for the alumina project is to come from Chinese banks.
Great news.I do hope that with the hydro project and this alumina project a lot of jobs will be created and the lives of Guyanese will be improved. There is lots of jobs that could come from aluminim since it is used in construction of buildings , in machinery in food packaging etc. Aluminum is the metal of the futuresince it is known for its light weight , it does not rust and when alloy with other elements it has great strength.
Way to go.
Sounds good!… I hope the proceeds from this venture will benefit the lives of the general public and not those in charge of it.
sorry man, but aluminium does rust, so does copper, except its not like how you may be accustomed to seeing steel rust, but all materials rust, ferrite and non ferrite. in their own way.
Remember the saying “Wha God mek does done much less wha man mek”.
It doesn’t rust, but it corrodes when it comes into contact with oxygen forming aluminium oxide. However, this oxide forms a protective coating on the surface of the metal preventing further corrosion. In the case of iron, rusting occurs forming iron oxide, which unlike aluminium oxide, does not protect the iron. So an iron battle ship will rust and turn to oxides given enough time.
Thank ya all for the refresher training and making it feel like we are back in the University of Guyana or Sheffield University Department/s of Metallurgy and Materials Science. ;-)
clarification for all those making comments:
METALLURGICAL GRADE BAUXITE is available in abundance in Guyana. Rusal ships over one million tons / year from Berbice. BOSAI presently does not mine metallurgical bauxite.
An ALUMINA REFINERY takes metallurgical grade bauxite ore and converts it into METALLURGICAL ALUMINA.
This would be similar to the Alumina Refinery which was built by ALCAN in 1961 and which closed around 1972.
An ALUMINIUM SMELTER takes metallurgical alumina and converts it into ALUMINIUM.
From a purely business perspective, this looks good. I say ‘looks good’ because the devil will be in the details of the process as the agreement unfolds. Guyana needs massive investments to move along.
Unfortunately, Guyana has only an 11 percent stake in this? Migh as well we give away the whole store and collect royalties.
Finally, Guyanese employees and labor bodies have to closely monitor this company’s operations, because the Chinese are known to be insensitive to their own people’s needs and to the environment. China is the world’s largest ’sweat shop’ that ignored international labor rules and regulations governing wrokers rights!
china needs raw material, so they will comply with the rules and regulations.
this and the hydro we will see massive increase in industry, from the aluminum.
You are sure right; “Guyana needs massive investments to move along” And, if the current Guyana Government did not shoot itself in the foot with the closure of the Guyana Co-operative Agricultural and Industrial Development Bank (GAIBANK)…. the country would have been further along the way towards economic development and diversification.
Sorry for the quick follow up, but how come Sam Hinds, who has ministerial responsibility for BAUXITE, is not featured in this signing?
Is this a coup designed to make Jagdeo look good AGAIN?
And what’s up with Norman McLean? The guy is in every foreign company? Isn’t there any body else in Guyana to do the job, Norman?
Sign up and let jobs be created!! Guyana would soon be on top. Viva Guyana!
i don’t agree with you. it will all be ship out of the country and then where would we be. (como dice pre Chaves 60%o nada)
not so fast arnold, most of the top jobs wil go to the chinese and the laborers wil be guyanese.
Congrats Guyana! Linden need this! Hurry up!
Impressed to see the government strike such a deal with our Bauxite in getting the developers (whoever) takes over the bauxite industry to build a smeltering plant too.
One big thing about this deal to me though is that the Chinese (Asians generally) doing business in Guyana seldom or even never hire Guyanese. I know Bosai is going to hire some locals, I just hope its not 250 local and 2500 Asians, and I also hope it won’t be Mr. Norman McLean, the only local in a top position.
Remember Barama? No, well just look at when a Chinese restaurant or any Asian business in Guyana has work (like construction or any other skilled trades) to do…who does it?
Nice going Guyana…But please don’t give the Asians our oil contracts when we strike Black Gold.
This article reads in part; “[....The signing clears the way for the way for Bosai to continue to pursue and conclude the feasibility study at a greater level of detail and to determine the financial and economic attractiveness of establishing the one-million-tonne per year alumina plant in the bauxite mining town of Linden....]” The question is; and, bordering on the “technical feasibility” (attractiveness)…. no mention was made of this given that for certain projects such as the to be successful from a analytical perspective they have to be “financially”, “economically” and **technically feasible** as well.
Just my $0.02 observation.
Correction: “for certain projects such as these to be successful” instead of “for certain projects such as the to be successful”. Thanks.
10 year tax exemption, 89% ownership of the joint venture company…text book. 3 cheers for FDI.
Is there anything about environmental protection in this agreement? This is usually not a priority for these guys in their own country much less across the globe in Guyana. But this should be a priority for the Govt of Guyana.
This is good news for Guyana and good for Lindeners. This is what Guyana needs to create jobs and improve the economy. Govt, congrats on your quest to continue bringing good investments to Guyana.