Suriname suspends talks with BHP-Billiton
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| Published on Wednesday, October 15, 2008 |
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By Ivan Cairo
Caribbean net News Suriname Correspondent
Email: ivan@caribbeannetnews.com
PARAMARIBO, Suriname: The Suriname government has suspended negotiations with multinational BHP-Billiton in connection with development of a new bauxite mine in west Suriname, a government minister disclosed. Subsequently the company announced the immediate halt of the so-called Bakhuys-project and removed the October 22 discussion of the project from its agenda.
At a press conference minister of Natural Resources and Energy (NH), Gregory Rusland, noted that the government is suspending talks with the mining company since its negotiating team has no mandate to negotiate a deal that goes beyond a proposal put forward to the government in March this year. The Suriname government had turned down that proposal.
“We want to develop the last available bauxite deposits of Suriname in the best possible way, but not at any price,” said the minister.
BHP-Billiton reportedly pressed for a concession of 30,000 hectares with a proven deposit of 220 million metric tones of bauxite, based on regulations dating back to 1938. The company was also opting for paying US 65 cents per ton bauxite, while according to Suriname negotiators, for ten years the government won’t receive income tax.
While BHP-Billiton said it will invest over US$700 million in the project, the government said the conditions put forward by the multinational were unacceptable, since this will “literally mean a bargain sale of the last available deposits in Suriname”.
The government is only willing to issue a concession with 68 million metric tones of bauxite, since it has plans to establish its own company to establish an integrated aluminum industry in west Suriname.
The Bakhuys project was especially important for BHP-Billiton which has a 45 percent stake in the country’s Paranam refinery co-owned by Suralco/Alcoa (55%). While Suralco/Alcoa has a bauxite concession and could also import ore from Brazil to secure deliveries to the refinery, BHP-Billiton has no concessions in Suriname. A top negotiator has indicated that Suriname is willing to buy BHP-Billiton’s 45 percent stake in the refinery.
In a letter to his co-workers BHP-Billiton manager John Sew A Tjon , said that the company’s proposal to acquire the 68 million metric tonnes bauxite was to secure continuity of the Paranam refinery for the next 25 years. According to the manager the economic benefits from the Bakhuys Project are “marginal” but since the company could manage the risks it was willing tot pursue the operation.
“I therefore deeply regret that with the cancellation of the negotiations a timely start of the Bakhuys Project to prevent an interruption in the delivery of bauxite after 2010, becomes almost impossible,” said Sew A Tjon.
Besides BHP-Billiton and Suralco/Alcoa, which earlier opted out from the negotiations with the government, Suriname has several more options, said the minister.
While China Aluminum Company (Chalco) has indicated its interest, next week a delegation from Swiss multinational Glencore is arriving in Paramaribo, for talks with the government. | | | | Reads : 1079 |
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