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Sunday, June 04, 2006
Omai to shut bauxite operations for two months

By Joe Chapman

PRIME Minister Samuel Hinds yesterday said the government was pursuing initiatives to cushion the effects on employees of Omai Bauxite Mining Inc who will be sent off temporarily due to overproduction and lack of markets.

The Government Information Agency (GINA) said he gave the assurance in a television address during a visit to Linden yesterday. The Prime Minister also met some workers to update them on the situation, the agency said.

Just two years after taking over the Linden bauxite operations from the Linden Mining Enterprise, OBMI on Friday announced it would be curtailing production because of a drop in sales.

General Manager, Mr Robert C. Walish said the “rate that we are selling at right now is not sufficient to sustain operations…so we have chosen to stop producing Refractory A Super Calcined (RASC) bauxite, our main product, in July and August.”

Walish said this unfortunately affects many people but this was the “only way we have to adjust our production rate to what we are selling”. He said the entire operations would be shut down.

GINA said alleged dumping of RASC bauxite by China has affected the competitiveness of local bauxite and its demand on the international market.

The Prime Minister, it reported, said the current price of China’s bauxite appeared to be below the level of economic viability, suggesting possible subsidising of the sector in that country.

If this is proven, he said, the World Trade Organisation (WTO) can be asked to amicably resolve the issue.

According to GINA, Mr Hinds indicated that President Bharrat Jagdeo met OBMI executives to discuss the issue and will work with the company and workers. President Jagdeo is due to meet the workers shortly, it said.

Giving a background to the decision, Walish and other top company officials, including Plant Manager, Mr Victor Rozan and Personnel Manager, Mr Peter Benny, explained that since January there was a slowing down in bauxite sales after last year’s last quarter, which was particularly good, especially in December.

Walish, however, assured workers, “when business picks up…we will invite all to come back to work (as) this is not any kind of a move or a scheme to replace employees.”

“This is necessitated by the fact that we don’t have, or need to produce calcined bauxite at the moment because we don’t have that amount of sales. So when we have the sales, we produce for our inventories”, he explained.

At the peak of its operations OBMI had 598 employees, including permanent and contracted staff, but that number dropped to 505 up to recently.

Walish said OBMI was doing its best to sell its flagship RASC product but there are three things which could happen at this time that could affect the course of its future:

** resuming the current level of production in September;

** a further decrease in sales “by which time we would have to extend the period of time that we would be shut down”;

** an increase in sales “by which time we would need to run both kilns and need to hire more people than we have right now”.

Indicating that the shutdown could be extended or shortened based on orders for not only Super Chemical Grade Bauxite (SCGB) and more RASC, Walish said no assurance can be given now, but “our best estimates are that we will restart on September 1st.”

“As in any business we have to be able to sell what we make,” he pointed out.

OBMI employees were informed last week of the impending shutdown of the mines and plant operations by management which is in a joint venture with the government which has a 30 per cent share of the business

Guyana Chronicle