Mining and refinery agreements signed
PARAMARIBO, Suriname–(AP)–Jan. 6, 2003–Suriname signed agreements Monday with two aluminum companies from Australia and Pittsburgh for bauxite exploration and exploitation rights.
The first agreement, signed with Pittsburgh-based Alcoa LLC, will allow for an increase in capacity of the company's bauxite refinery plant.
The second accord, signed jointly with Alcoa and Australia's BHP Billiton, grants permission to the former competitors to conduct studies for new bauxite mining and refinery operations.
It also gives them the right to build an aluminum-melting plant and a hydroelectric dam in the western Bakhuys area, the agreement said. Alcoa and Billiton agreed on a joint venture in October for bauxite exploration, giving Alcoa a 55 percent stake and a Billiton a 45 percent stake.
Bakhuys, 300 kilometers (140 miles) southwest of the capital Paramaribo, is believed to hold about 200-700 million tons (180-630 million metric tons) of bauxite.
Suriname's economy has slowed, partly because of a declining market for bauxite, one of the country's principal revenue earners. "With these (agreements) Suriname stands on the verge of a huge development," Natural Resources Minister Franco Demon said.
The two companies had initially proposed individual plans to mine bauxite, a key ingredient of aluminum. Their cooperation proposal came as a surprise, since both companies had insisted they weren't interested in a joint venture.
The Alcoa-Billiton agreement also says the companies will jointly exploit bauxite from two other areas where reserves are expected to last until 2032. Suralco has a concession in eastern Suriname and Billiton has a concession in central Suriname.
The agreements comes after a year of negotiations between the government and the two companies.
The exploration phase will cost US$16 million (34.7 billion Surinamese guilders) and will last 22-25 months. The parties have agreed to negotiate an exploitation agreement within 18 months.
Billiton will try to prove reserves of at least 300 million tons (180 million metric tons) of bauxite, the amount needed for the refinery to be feasible. Alcoa will conduct the feasibility studies for the aluminum melting plant and the hydroelectric dam.
Alcoa and BHP Billiton have also agreed to invest US$70 million (152 billion guilders) in the expansion of the existing bauxite refinery at the Suralco plant.
The investment will see an increase in the annual output of the refinery of 12.5 percent to 2.25 million tons (2 million metric tons).
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