Georgetown: Bosai Minerals Group Guyana Incorporated (BMGGI) has shelved its US$100 million expansion project owing to the challenges being faced on the global bauxite market. In 2012, the bauxite company in Linden announced its intention to invest approximately US$40 million to mine additional ore in an area called Block 37, in addition to the construction of a third kiln to the tune of US$57 million. This massive expansion project was designed to create more than 500 jobs in the second largest town in the country, which is said to be starving for job opportunities.
During the 2014 Budget Debate in the National Assembly, Natural Resources and Environment Minister Robert Persaud disclosed that the Government of Guyana took a decision to retain Block 37 due to the challenges faced on the international scene, but Bosai was looking at alternatives.
BMGGI’s General Manager Robert Shang said Bosai has respectfully accepted the Government’s decision. “If that’s the Government’s decision, we are okay with that. Maybe in the future, if we have another expansion plan, maybe we will reapply,” he said.
Shang made it clear, however, that Bosai will not be pursuing the US$100 million expansion project, positing that bauxite remains a challenge. “Right now the global market for calcined bauxite is very, very limited. The global bauxite market is not as good as before. With competition from China, that plan has already been derailed,” Shang said
Bauxite is the main raw material used in the production of aluminium. Though there are many advantages in producing aluminium, the current supply surplus and the energy-intensive nature of processing aluminium from bauxite have resulted in demand reducing significantly. The situation on the global market is further compounded by the fact that approximately 75 per cent of the material ever smelted is still being used. But despite these challenges, output continues to increase especially in China and Australia, the largest single producers of bauxite.
In November 2008, the Government of Guyana and Bosai signed a US$1 billion agreement for the establishment of an alumina refinery and aluminium shelter. Under the leadership of then President Bharrat Jagdeo, the massive project in the mining town was expected to create employment for approximately 700 persons during its early stages and 1000 permanent jobs. BMGGI was expected to complete the project within three years after the completion of a feasibility study in 2009.
However in January 2011, Prime Minister Samuel Hinds disclosed that the feasibility study conducted by Bosai in 2010 did not favour the establishment of an alumina plant in Linden.
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