BHP-Billiton to mine bauxite and produce alumina at El Palmar
<a href=www.vheadline.com>Venezuela'a Electronic News Posted: Tuesday, June 10, 2003 By: David Coleman
Venezuelan Guayana Corporation (CVG) officials say the state-owned heavy industry conglomerate intends to free up a large bauxite deposit in which BHP-Billiton has shown an interest to mine bauxite and produce alumina.
CVG president, Major General (ret.) Francisco Rangel Gomez says the CVG had had to rescind a dormant exploration contract held by British Delta Minerals before the El Palmar deposit could be offered but that Delta Minerals had held the contract for more than a decade without carrying out any work on the property.
In a curious parallel with procedure on the Las Cristinas gold mine project in El Callao, where Placer Dome's work contract was irrevocably rescinded last year, Rangel Gomez says "what we have is a lack of contract compliance ... nothing was done for 12 years!"
Major General (ret.) Francisco Rangel Gomez "Without any doubt we will be making a decision before the year is out," Rangel Gomez said, pointing out that the CVG has total autonomy from the President of Venezuela to handle all mining contracts in Venezuela's Guayana region. The CVG is currently in negotiations with Delta Minerals to end the contract, in full compliance with their obligations and Venezuelan law.
BHP-Billiton had asked to participate in the El Palmar development with an initial investment of US$1.3 billion for the construction of a bauxite mine and an alumina plant which could be expanded to include a primary aluminum smelter, with an increased total investment estimated at $4.3 billion.
CVG mining director Armando John says El Palmar contains bauxite reserves estimated at 150 million tonnes. The CVG has drawn up a new national aluminum development plant focused on a primary aluminum output goal of three million tonnes comparable with Venezuela's total annual aluminum output at just over 607,000 tonnes.
CVG Alcasa has just signed a $650 million aluminum smelter project with Swiss-based Glencore International AG consortium to build a fifth production line to double capacity to 450,000 tonnes.