Bauxite deal still in limbo

Bauxite deal still in limbo

Guyana’s President, Bharrat Jagdeo expressed concern that government was “in the dark” about a 46 million dollar buy-out by China’s Bosai Minerals Group of a 70-percent share in a bauxite company controlled by Canada’s IAMGold Corporation.

Jagdeo said his administration would not recognize the deal because the government, which holds the remaining 30 percent share in Omai Bauxite Mining Incorporated (OBMI), was not consulted.

“These agreements, whatever they are, we are still in the dark, we have broad information as to what the deal is but the details of those would still have to come to us either for approval as a regulator or as a shareholder,” he said.

IAMGold’s sale of its share in OBMI came less than one year after it took control of the company from Cambior, another Canadian gold mining company, that had recently closed and re-opened OBMI’s bauxite operations because of stiff competition from China’s cheap and high volume of bauxite on the world market.

The president noted that under an agreement that the Toronto-based IAMGold inherited from Cambior, the Guyana government should be given the first offer if a stake in the company has to be sold.

Prime Minister, Samuel Hinds, who is responsible for the mining sector, has written OBMI and Bosai Minerals Group but has not received any response, Jagdeo said.

“If they don’t respond, then they can’t consummate the deal and I don’t think any investor will want to enter into an arrangement of that sort without having some discussion with the other shareholder and especially if that other shareholder is the government, so I doubt whether the detail can be consummated until we get all the details,” Jagdeo told reporters.

IAMGold on December 19 announced it had entered into an agreement with Bosai for the sale of its interests in OBMI and Omai Services Inc for a transaction value of approximately 46 million dollars, including the assumption of 18 million third-party debt.

Share this post