Guyana bauxite project by First Bauxite Corporation faces financial hurdles

A US$120 million investment project by Toronto-based First Bauxite Corporation (FBC) for bauxite mining at Bonasika in Guyana seems to have struggled over finance issues and the project had not taken off yet as it was scheduled. First Bauxite Corporation (FBC), which was exploring bauxite deposits in the Bonasika area of Region 3, Guyana has become a victim of falling market conditions and the project has almost come to a halt. The company was counting on the private placement of 40,000,000 common shares at $0.125 in December 2013 with the purpose of raising the capital needed for the initial investment on the project.

During last year’s budget presentation, Minister of Finance Dr. Ashni Singh announced that First Bauxite Corporation (FBC) was scheduled to start construction of a US$120 million calcined operation in late 2013 at Bonasika. However, that has not happened even by the end of February 2014 as the company has faced a number of financing issues.

Guyana’s bauxite industry could be affected seriously by this blow, as one of its major foreign investors has fallen into financial hardship. Bauxite makes up roughly 13% of Guyana’s export business. FBC has been a significant player in a group of companies (including BOSAI, First Bauxite Corporation, Bauxite Corporation of Guyana, RUSAL and Omai) responsible for the surge of investment over the past several years that has made Guyana responsible for 2 million tons of bauxite production per year (2% of global production). Though that output would appear small on a global scale, Guyana is the 11th biggest producer of bauxite, and is one of two nations (China) to produce bauxite with a minimum of 60% aluminum. Bauxite of that quality can withstand extremely high temperatures.