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Guyana Aluminum
Guyana was known to have a 350-million-ton bauxite reserve, one
of the world's highest concentrations of the valuable mineral. But
production of bauxite dipped sharply after the government
nationalized the industry in the 1970s. In the mid-1980s, bauxite
production hovered around 1.5 million tons per year, or half the
annual level of the 1960s and 1970s. The state-owned Guyana Mining
Enterprise Limited (Guymine) suffered repeated losses as a result
of inefficient management, declining world prices for bauxite, and
prolonged strikes by workers. The losses drained the company's
capital reserves and led to deterioration of plants and equipment.
Guyana's single alumina plant, located in Linden, used to separate
300,000 tons per year of aluminum oxide from raw bauxite ore until
the facility closed in 1982. From then on, Guyana was forced to
export only unprocessed bauxite ore, foregoing the added revenues
to be gained from refining the mineral.
In the 1970s, Guyana had the advantage of being the world's
leading supplier of so-called calcined bauxite, a high grade of the
mineral used for lining steel furnaces and other high-temperature
applications. After 1981, however, China emerged as a major source
of calcined bauxite, and Guyana became known as a less reliable
supplier. By the end of the decade, China had displaced Guyana as
the leading exporter of calcined bauxite, even though Guyana had
the advantage of being closer to the major North American and
European markets.
Bauxite mining was concentrated in northeast Guyana. The two
largest mines were located at Linden, on the Demerara River
directly south of Georgetown, and at Kwakwani on the Berbice River.
There was little development of new mining areas during the period
of state ownership. But in the late 1980s, the government began
offering foreign companies the chance to rebuild and expand the
bauxite industry.
The Reynolds Bauxite Company, formerly the owner of the mine at
Kwakwani, was one of the first foreign firms allowed back into
Guyana. It provided managerial assistance to Guymine beginning in
1985. In the late 1980s, Reynolds began investing an estimated
US$25 million to open a bauxite mine at Aroaima on the Berbice
River. An elaborate system of tugboats and barges was required to
bring the bauxite 126 kilometers down the Berbice River and then
120 kilometers along the coast to Georgetown for transport to the
United States. According to London's Economist Intelligence Unit,
Reynolds awarded a ten-year transportation contract to GoliathKnight , an Anglo-Dutch company. The mine was expected to produce
1.5 million tons of bauxite in its first year of operation (July
1990-June 1991) and 2.6 million tons per year by 1995. Guymine was
also negotiating to allow Venezuela's Venalum company to begin
extracting 600,000 tons per year in the region around Kwakwani.
The government anticipated further development of the bauxite
industry in the Linden area. A new mine near Linden, called the
East Montgomery North Mine, was expected to open by 1994. It was to
take the place of the three largely depleted pits in the area. The
government sought significant foreign investment for the project;
production was expected to reach 2 million tons per year in the
1990s. Norway's Norsk Hydro was discussing the possibility of
reopening the alumina plant near Linden at a cost of about US$100
million. Furthermore, just as the Reynolds company was returning to
the mines it had previously owned, Alcan was negotiating a return
to bauxite production facilities in Linden.
Data as of January 1992
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