Saving Iceland

***** SIDEBAR ******

Forbes on Trans World

The Reuben brothers spoke to Fortune magazine in late 1999. As the Reubens’

Trans World aluminum empire collapsed, Fortune reported on the rise and

fall. The following are excerpts from the Richard Behar’s June 12, 2000,

article headlined “Capitalism in a Cold Climate: The story of Trans World’s

aluminum empire is filled with bribes, shell companies, profiteers, and

more than a few corpses. Then again, in today’s Russia, that’s pretty much

par for the course.”

“’Very often the most likely to succeed in these stormy oceans are not the

picture-perfect, clean-shaved, deep-tanned, well-built, and fashionably

attired yachtsmen under the immaculate white sails,’ says Lev Chernoy,

reading from a prepared statement, ‘but unpleasant-looking ugly skippers in

command of a pirate ship. One should not be appalled. These are the laws of

initial capital acquisition’…

“This is the story of how those laws were applied by Trans World, an

enterprise launched by the Reuben brothers, David of London and Simon of

Monaco, in the early 1990s. With the help of two Russians–Lev Chernoy and

his brother Michael–the Reubens built a Rockefeller-style vertical empire

in the former Soviet Union in a few short years. In 1996, Trans World was

hailed as the world’s third-largest producer of aluminum, after Alcoa and

Alcan…

.

“Trans World’s scope was so vast yet so invisible that it was called ‘a

state within a state,’ with hundreds of constantly shifting shell companies

and tentacles reaching from the Siberian steppe to the shores of Cyprus,

the Bahamas, the Cayman Islands, and ultimately

the U.S., where 30% of the empire’s aluminum was sold…

“The Reubens’ time in the sun was brief. By 1998 they had lost control of

nearly half their kingdom to former partners. Government investigations in

at least seven nations–along with hundreds of mostly foreign media stories

critical of Trans World–were threatening to take away the rest. Cutting

their losses, the Reubens sold most of their remaining Russian assets a few

months ago….

“In the course of nearly 100 hours of interviews, the Reubens and the

Chernoys contradicted one another so often as to be nearly unintelligible.

Ironically, their attempt at

glasnost, while it generated no smoking gun, has ultimately only

underscored the dirtiness of the world they moved in–and will likely spur

law enforcement agencies to redouble efforts to finish them off. At least

that’s FORTUNE’s conclusion, especially after our investigation traced

large sums moving from Trans World to firms at the heart of three big

money-laundering scandals that have dominated headlines in recent months:

the Bank of New York case, the Kremlin-Mabetex kickback probe, and the

collapse of YBM Magnex, a Pennsylvania public company launched by Russian

mobsters that was shut down by the feds last year.”

The full, lengthy investigative piece on Trans World and the Chernoys can

be found in the June 12, 2000 edition of Fortune magazine.

– Foreign aid and investment in the former USSR

The U.S. Trade and Development Agency was an early backer of foreign

investment in the former Soviet Union’s aluminum infrastructure. In 1994,

the agency gave aluminum industry officials from the former Soviet Union

$24,000 to spend on a visit to the Alumitech 94 convention in Atlanta.

(TDA)

Since then, foreign government bank financing has been proposed or extended

toward many operations in which the aluminum barons have operated.

– Armenia

In 1988, the French government pledged 1 billion francs in financing toward

the modernization and expansion of the 100,000 tpy Kanaker aluminum smelter

in Armenia by the French firm Pechiney. The venture would have given

Pechiney 25% ownership of the plant. The break-up of the Soviet Union, war

in Armenia, and severe pollution caused by the smelter, however, have

conspired to keep it closed in the 1990s. (Ecotass, November 20, 1989;

Financial Times, November 25, 1988; Chemical Business News Base,

January 12, 1989)

– Azerbaijan

A smelter in Sumgait has helped that city obtain the dubious status of “one

of the most polluted cities” in the former Soviet Union. (Mining Journal,

November 14, 1997) “Row upon row of tiny headstones in a children’s

cemetery bear silent testimony to the pollution that has poisoned the

sprawling industrial town of Sumgait, reported Agence

France-Presse last year. (AFP, June 16, 1997) At its operational peak in

the 1980s, a local documentary charged, the Sumgait refinery “poisons

Sumgait’s air basin with 70,000 tons of toxic discharges each year.”

(Soviet television, May 11, 1989)

Trans-World Group assumed management of the smelter and an associated

alumina refinery (Gyndzha Alumina) in 1997. Previously, Kaiser (U.S.) and

Interchem (U.K.) planned to invest in the plant, with possible backing from

the EBRD, but backed out in 1996, when they determined that high energy

costs would make their investment unprofitable. (Euromoney Trade Finance

and Banker International, July 31, 1995; Reuter, June 21, 1995)

In April 2000, the Azeri government created the Azerbaijan Aluminum holding

company, which included the Gyndzha alumina plant and Sumgait and Zeiliksky

aluminum plants. In October, it selected Netherlands-based Fondal Metals

over Russian Aluminum and an offshore company named Ansol in bids to

develop the aluminum company. Two other bidders — Iralco of Iran and

Trans-World — withdrew their bids, according to Azer-Press.

According to Kommersant, officials of Russian Aluminum and Dutch producer

Hoogovens had never heard about Fondal Metal. “There are two main

versions,” reported the newspaper. “First: Fondal Metal represents

interests of British Trans World Group, which used to manage the Gyandzha

alumina plant until 1997. Second: MetallsRussia concern, a metal trading

subdivision of Thai group Sahaviria, is behind Fondal Metal. The group has

substantial industrial assets in Ukraine.” (“Azerbaidjan aluminum will

become Dutch” by D.Butrin, Kommersant, October 13, 2000)

– Kazakstan

Trans-World Metals was active in Kazakhstan until it was ousted in 1998. In

1996 and 1997, Trans-World planned to build a 200,000 ton smelter there,

and had Bechtel produce a feasibility study for the smelter’s construction.

According to the Russian news agency Interfax, in 1997 the EBRD was

considering helping to finance a proposed aluminum smelter in Kazakstan,

along with Bechtel, Intec and Alumax. A spokesman said the companies were

attracted by Kazakstan’s cheap electricity, alumina and labor. (Interfax

news agency, Sept. 29, 1997)

In December 1997, according to Mining Journal (June 5, 1998), Trans-World

Metals “filed a lawsuit against three of that country’s citizens for

allegedly trying to subvert its operations there, including Pavlodar [an

alumina refinery]. In January 1998, the government ousted all T-WM

appointed management from its metals plants, accusing them of

rregulatiries, tax evasion and failing to act in the best interests of

shareholders.”

The Energy and Aluminum newsletter reported in 1998 that “although

Trans-World Group said last June that it would build Kazakhstan’s first

smelter, late last year Trans-World lost control over its investments in

northern Kazakhstan, including the Pavlodar alumina plant that was to

supply the smelter with raw material…. The future of Trans-World and of

this project remains questionable. The current situation is somewhat

confusing.” (http://www.enalnewsletter.com/enalnl07.htm)

– Russia

Russia is the world’s largest exporter of primary aluminum, and the second

largest producer (3.15 million tons in 1999) after the United States.

(Mikhailov)

In 1997, according to Euromoney, Trans-World sought to raise funds for

smelter

upgrades in Russia from “multilaterals such as the EBRD… although the bank

has to date kept a distance from the Russian aluminum industries.”

In 1994, the EBRD and Scandanavian financial institutions, including

Finland, were “expected” to grant credits toward the overhaul of the

Kandalaksh aluminum plant in northern Russia, although no such deal appears

to have been finalized. The bank also has considered financing the

Novokuznetsk smelter (CIS Economics & Foreign Trade, June 14, 1994;

Euromoney, April 30, 1997)

The U.S. Trade and Development Agency (TDA) has financed studies at two

smelters. It paid $850,000 toward a study by I.S. Consulting on

modernization at the Bratsk smelter, and $500,000 toward an Alumax (now

Alcoa) study of the Volgograd smelter. (U.S. Trade and Development Agency

(TDA) website, http://www.tda.gov/region/nis.html)

In Leningrad Oblast, the U.S. consulting firm Alutec is negotiating with

the government to build a planned aluminum smelter that would draw power

from the Leningrad Nuclear Power Station. The $650 million, 220,000 ton

plant, would be located close to the Gulf of Finland, in easy reach of

Western markets.

“Because of its location and cheap power, the Leningrad Oblast is a very

advantageous spot for aluminum production,” Grigori Dvas, Oblast deputy

governor in charge of industry and economic policy, told the St. Petersburg

Times in 2000. “And even if Alutec doesn’t go ahead with its project, we

will find other investors.” (John Varoli, “Aluminum Interest Considering

Oblast,” St. Petersburg Times, Sept. 26, 2000)

Alutec said it would collaborate with unnamed large transnational

producers, and possibly the World Bank, International Finance Corp., and

EBRD, for financing the new smelter.

“How Alutec will find its niche among these giants is not clear, and

certainly a task filled with great risk, if not danger,” reported the St.

Petersburg Times. “Indeed, Alutec understands it will have to cultivate the

good will of Russia’s oligarchs and aluminum kings — the likes of Roman

Abramovich and Oleg Deripaski — if its project is to succeed.” (ibid)

– Tajikistan

The Tajikistan government is planning to privatize the plant to meet

conditions set by the International Monetary Fund. The plant imports

alumina from Russia’s Russky Aluminy and ships ingot to Russia. (Bakhtior

Islamov, “Aral Sea Catastrophe: Case for National, Regional and

International Cooperation,” Slavic Research Center, 1998; also,

Globalsilicon news at www.globalsilicon.com/english/e12.htm)

In 1997, the EBRD opened talks with corporations interested in taking

shares in the Taduz smelter, according to the Energy and Aluminum

newsletter. (www.enalnewsletter.com/enalnl06.htm)

In 1999, the International Finance Corporation and the government of

Switzerland provided $400,000 toward an international audit of the smelter.

According to the IFC, the assessment “identifies viable privatization

options for the company.” (“Tadaz: Production of aluminum must increase to

300,000 tons by 2000, Asia Pulse, June 14, 1999; International Finance

Corp., “Annex: TA Projects Approved for Support by Donors in FY99,” in IFC

1999 annual report)

According to Radio Free Europe, Turkey’s EximBank is considering an $8

million loan to the Tursunzade Aluminum Plant. (“Tajikistan, Turkey seek to

expand economic ties,” Radio Free Europe/Radio Liberty Newsline, Sept. 27,

2000)

Sayan, now part of Russian Aluminum, has also been interested in investing

in Tadaz. (www.enalnewsletter.com/enalnl07.htm)

In 1999, TDA paid $450,000 toward a Bechtel Corp. feasibility study of a

possible new 165,000 ton, $575 million smelter at Mery, Turkmenistan. (TDA;

Mining Annual Review, March, 2000; WWP-Business Opportunities in Eastern

Europe & the CIS, Dec. 8, 1999)

– Ukraine

In Ukraine, the U.S. TDA paid $500,000 toward a Technalum study of the

Zaporozhye smelter, and $240,900 toward a Kaiser study of the ZALK smelter.

(TDA)

Other intertwining of banks and aluminum

– Argentina

Aluar (Argentina) installed a new 120MW gas-fired power plant as part of a

program to expand its aluminum production capacity from 175,000 to 258,000

tons by 1999. (Aluminium Today, April 1997; Reuters, Dec. 24, 1996)

Existing infrastructure includes a 448MW plant in Fataleufu, southern

Patagonia, and a reserve 54MW thermal plant imported from Italy. During the

smelter’s construction, company officials noted the “great advantage

involved in cheap electric power to be generated by the State,” which was

four-tenths of one center per kilowatt in 1975. In 1971, the Argentine

government requested$80 million in credit from the Inter-American

Development Bank to build the $90 million dam. (Latin America Newsletter,

Aug. 20, 1971; May 3, 1974).

– Brazil

The World Bank helped to finance the construction of the massive Tucurui

dam, which fueled the proliferation of aluminum infrastructure in Amazonia.

(See Energy chapter for more details) (Latin American

Newsletters, Nov. 23, 1984)

The Japan Export-Import Bank financed the development of a second set of

transmission lines from the Tucurui hydroelectric dam to the Albras 340,000

tpy smelter at the mouth of the Amazon River, at a cost of $130 million.

Albras is 49% owned by a consortium of Japanese corporations, including

Showa Denko, Kobe Steel, Marubeni and Sumitomo, which import the plant’s

aluminum.

The Tucurui dam also supplies energy to the 350,000 tpy Alumar smelter,

which is 60% owned by Alcoa and 40% by Shell. Tucurui produces 3,000 MW of

power, with 1,400 MW dedicated to supply Albras, Alumar, and the 1.1

million tpy Alunorte alumina refinery. The companies are considering

participation in a $1.8 billion, 900MW

expansion of Tucurui’s capacity to 6,000 MW. Alumar is the largest private

aluminum project. (Gazeta Mercantil Online, October 22, 1996, Nov. 21,

1996; American Metal Market, July 25, 1996; Financial Times, Nov. 16, 1996)

– Cameroon

The 90,000 tpy Soderburg technology-driven Alucam smelter in Cameroon is

majority owned by Pechiney of France. In 1987, the French government aid

agency, Caisse Centrale de Cooperation Economique, loaned Alucam $1.4

million toward the purchase of new equipment. At least three other

multilateral loans have benefitted Pechiney’s Alucam smelter: In 1985, the

European Investment Bank loaned Cameroon $21.2 million, and the government

of Kuwait’s Development fund loaned 3 billion CFA francs for the Song

Loulou power station which helps to power the Alucam smelter and in 1986,

the CCCE

loaned Cameroon $12.2 million for installing two 48MW turbines at the dam.

(African Economic Digest, July 12, 1986; Oct. 30, 1987, Feb. 8, 1986)

In 1979, the International Finance Corp. committed $7.9 million toward

Alucam. Twenty years later, the IFC still held equity of $0.9 million in

the aluminum smelter. (IFC annual report 1999)

– China

International finance has keyed the surge in aluminum production in China,

where aluminum production grew by 9.7 percent from 1998 to 1999, reaching a

record total of 2.6 million tons. Most Chinese smelters are small-scale.

The largest, Guizhou, produced 227,000 tons in 1999. The other four largest

smelters are Qinghai (205,000 tons in 1999), Baotou (117,000), Pingguo

(110,000), and Qingtonxia (102,000). More than 90 other smelters produce

less than 100,000 tons. Expansion projects are planned at Baotou (105,000

ton additional capacity by 2002), Pingguo (200,000 ton possible expansion),

Qingtongxia (100,000 ton expansion planned for 2001), and 12 other

smelters. (Mining Annual Review, March 2000)

IFC and OPIC have been, or may become, involved in a smelter projects in

Heijin City, Guangxi Pingguo, and an electrode paste plant that supplies

Chinese aluminum smelters.

In June 2000, the IFC agreed to invest $14 million in a Soderberg paste

plant, owned by Elkem of Norway, in the northwestern China region of

Ningxia. Elkem bought the shuttered plant from the state in April 2000. The

Elkem Carbon China plant supplies paste and anthracite to the aluminum and

ferroalloy industries. The IFC described this new plant as “the largest

single foreign investment to date in Ningxia.” The Norwegian government

financed an environmental assessment of the Elkem project. Even though the

plant produces a paste for an antequated technology (Soderberg smelting),

the IFC called the project “an example for the industry through the use of

modern, efficient, less-polluting technology.” (International Finance

Corp., “IFC invests US$14 million to develop China’s Northwestern Region,”

press release, June 7, 2000; “IFC invests US$14 million in western China,”

China Online, at

www.chinaonline.com/industry/chemicals/NewsArchive/Secure/2000/June/B1000613

12.asp))

Alcan (Canada) has reached a memorandum of understanding with the Chinese

government’s China Non-Ferrous Metals Industry Corp. to build a new 240,000

tpy smelter in Heijin City, Shanxi province, with possible expansion to

400,000 tpy. A feasibility study was due to be completed by mid-1999.

(ESP-Business Opportunities in Asia & the Pacific, Jan. 1, 1998) It would

be one of Alcan’s largest smelters and would have a captive coal-fired

power plant. IFC and OPIC involvement is possible. (Aluminium Today, June

1997; China Economic Review, Dec. 1995)

The governments of Denmark, France, Netherlands and Sweden, in 1991,

extended loans totaling $90 million to supply equipment to the new 300,000

tpy Guangxi Pingguo aluminum smelter. According to the Mining Journal (Oct.

4, 1991), the loans funded the importation of alumina refining equipment

from French firms Pechiney, Kestner and KHD ($63 million), power plant

equipment from ABB ($10.5 million), alumina pumping technology from the

Dutch Geho Pump Corp. ($7.7 milion), and an alumina sintering furnace from

F.L. Smidth of Denmark ($4.7 million).

– Egypt:

In 1988, Alcoa considered buying “a substantial stake in Egyptalum,” a

180,000 tpy smelter, according to Middle East Economic Digest (July 10,

1998). Egyptalum is planning to boost output by 120,000 tpy, and convert

its existing Soderburg anodes to pre-baked cells. In 1995, the European

Union-funded European Investment Bank loaned $92 million toward

modernization at Egyptalum. (African Economic Digest, Nov. 6, 1996)

– Costa Rica

In 1971, Costa Rica President Jose Figueres signed a pact with Alcoa, the

World Bank, and the Soviet Union “to construct a $400 million alumina

refinery and hydroelectric generating plant in the northwestern province of

Guanacaste. Electrical power from the new dam was to be transmitted to the

Alcoa mining site. In exchange for purchasing Costa Rica’s excess coffee,

Soviet hydroelectric generating equipment was to be purchased for the

500,000 kw dam. The combination of public opposition to Soviet involvement

and ALCOA’s decision to cease bauxite mining due to poor ore quality caused

the negotiations to fail,” according to the National Congress of American

Indians.

“Through the World Council of Indigenous Peoples the Boruca people became

informed about the experience of Indians in Surinam, the aboriginals in

Australia and the Yanomamo of Brazil as they confronted similar bank and

state initiated development projects. It was the discovery that

Multilateral Development Banks, state government economic pressures and

multinational corporations had combined to promote developments in

territories of least political resistance that caused the Boruca people to

increase their resistance to the planned Boruca Dam and the aluminum

processing plant. Indeed, the Boruca people sought to expose the actual

intent of the Multilateral Development Bank, the aluminum industry and the

Costa Rican government to the

national citizens of Costa Rica in an effort to prevent the further

advancement of the project.

“What had been revealed by the Borucas was that the Alcoa aluminum company

was interested in locating its processing facilities in Costa Rica because

of the increased political and military tensions in Surinam. The company

was not particularly interested in using Costa Rican labor, nor was it

interested in Costa Rican bauxite. Furthermore, it was revealed that the

actual beneficiaries of the planned Boruca project would be the

Multilateral Development Banks and private banks which would receive

interest payments on past Costa Rican loans; and the Alcoa company would

benefit from a “safe haven”, low or nonexistent taxes and tariffs, low

labor costs and “free zone” ports from which to import and export raw and

processed bauxite and aluminum. And, of course, the aluminum industry would

be assured inexpensive electrical power.” (Ralph Eluska, vice president of

the National Congress of American Indians, “Tribal populations and

international banking practices: a fundamental conflict over development

goals,” Testimony before the House Banking Committee’s Subcommittee on

International Development Institutions and Finance, June 29, 1983 at

www.cwis.org/fwdp/International/bankpoly.txt)

– Ghana

Sixty percent of the bauxite mined by the Ghana Bauxite Co. is exported to

Alcan’s alumina refinery in the U.K. The U.K.’s Commonwealth Development

Corporation loaned the GBC 3.1 million sterling to install a new conveyor,

completed in 1992, to haul load bauxite onto awaiting ships in Takoradi.

(Reuter, Sept. 23, 1994)

Bilateral and multilateral financial institutions have also financed the

development of energy consumed by the aluminum industry in Ghana. The Valco

aluminum smelter (90% owned by Kaiser) draws over about 45% of the power

generated by the Volta

River Authority’s Akosombo and Kpong dams. (Peter Owu, “Energy Crisis in

Ghana,” Africtech, vol8, no.1, at African Technology Forum website:

web.mit.edu/afs/athena.mit.edu/activity/a/africantech/www/articles/GhanaCris

is.htm)

In 1961, OPIC and the World Bank financed the construction of the Akosombo

Dam on the Volta River. Valco, then the largest smelter in Africa, was

developed to consume power from Akosombo. This dam, according to the

International Rivers Network, “flooded more land than any other dam in the

world, 8,500 square kilometers, around four percent of the area of Ghana.”

(International Rivers Network, “When the Rivers Run Dry – The World Bank,

Dams and the Quest for Reparations,” at

www.irn.org/programs/finance/damfacts.html; OPIC, “OPIC in Ghana,” March

1999, at www.opic.gov)

The IDA ($100 million), EIB ($45 million), African Development Bank, CDC

(U.K.) , CFD (France) and others have helped to construct a new Aboadse

power project and connections to the national grid. National power

shortages caused by drought and excessive demand forced Valco to curtail

production in the mid-1990s. (Africa Energy & Mining, Jan. 25, 1995, Dec.

21, 1994).

Eight bilateral and multilateral institutions provided over $300 million in

financing toward the development of the new Takorade oil-fired power plant,

built to provide more reliable power. Financing instittuions include the

IDA, EIB, CDC, Kuwait Fund for Arab Economic Development, Arab Bank for

Economic Development in Africa, African Development Bank, and the Caisse

Francaise de Developpement. This plant was seen as necessary to maintain

Valco’s presence in Ghana. (Owu)

OPIC has also provided insurance for Valco. (“OPIC in Ghana”)

– Guinea

Numerous aid agencies have directly supported the mining of bauxite and

alumina refining in Guinea.

In 1992, the EIB extended an $18.5 million loan, and the CCCE a $20 million

loan to

financing a modernization project at the Friguia refinery, in which French

firm Pechiney, British Aluminium, Noranda, VAW (Germany), and Alusuisse

have a 51% controlling interest. Previously, the EIB loaned Friguia about

$5 million in 1980, $7 million in 1984, and $15 million in 1988. Also in

1988, the European Development Fund approved a $40 million loan toward

Friguia. (Euromoney Trade Finance Report, Jan. 1992; Africa Energy &

Mining, Feb. 22, 1995; Europe Energy, Nov. 6, 1992; European Report, Nov.

23, 1991; Mining Journal, Dec. 9, 1988; Mining Annual Review, June 1992)

In 1996, the World Bank’s IDA approved a $12.2 million credit toward the

privatization of Guinea’s mining sector. “The project objectives are to

strengthen the Government’s capacity to act as facilitator and regulator of

mining activities, and to attract private investment for mining sector

development,” according to the agency. (World Bank Project Information

Document, “Guinea-Mining Sector Investment Promotion Project,” PID:

GNPA1077, June 29, 1995)

In October 1997, the World Bank put the “privatization of the alumina firm

Friguia back on track,” according to Africa Energy & Mining (Nov. 18, 1998)

The IMF has also played a big role in the restructuring of Guinea’s mining

operations, including bauxite, through a structural adjustment loan. In

1999, the IMF reported that “the government has decided to divest itself of

its mining companies and thus reduce its role as owner and operator in the

sector, while strengthening its role as regulator and intermediary….

Through privatization it is intending also to reduce its shareholding in

the aluminum company, Friguia, to a minority without veto power. Should the

privatization operation not succeed because of the absence of a credible

buyer, the government will resort to a private concession. The government

will continue its restructuring of the bauxite company, SBK, and is

committed to reducing its share of the company’s capital to a minority. The

government will continue its efforts in connection with reducing operating

costs and strengthening the management of another bauxite company, CBG, and

will design a strategy for encouraging new private investment in the

bauxite and aluminum sectors in the Boké region which may include a share

in the CBG.” (International Monetary Fund, “Guinea Enhanced Structural

Adjustment Facility

Policy Framework Paper, 1999-2001,” December 8, 1999)

– Guyana

The U.S. Overseas Private Investment Corp. has insured bauxite mining by

Reynolds (U.S.) in Guyana to the tune of $14.5 million in the 1970s, and

$14 million in 1991. The U.K. CDC has also provided $6.5 million in funding

toward bauxite mining in Guyana. Most of Guyana’s bauxite is shipped to the

U.S. and the E.U.

The World Bank, European Investment Bank ($14 million), and the European

Union provided $20 million toward restructuring Guyana’s bauxite industry

in the early 1990s.

(American Metal Market, Dec., 1991; Chemical Business News Base, May 15,

1991; Inter Press Service, July 19, 1994; Caribbean News Agency, Oct. 19,

1993; Agence Europe, Feb. 20, 1993)

In 1991, the Guyanese government dissolved the state-owned Guymine

operation. Green Mining of the U.S., which strip-mined the Linden bauxite

reserve for Guymine, had held insurance from OPIC in 1989 and 1990, and

requested reimbursement for unpaid work. After Green Mining filed the

claims, OPIC suspended its coverage for U.S. projects in Guyana. On July

28, 2000, Green dropped its claims against OPIC, and its lawsuits against

the Guyana government, in exchange for payment. The settlement reopened

OPIC insurance operations in Guyana. (“OPIC Restores Support for American

Investments in Guyana,” Guyana Monthly Update, August 2000; U.S. Embassy in

Guyana, “Investment Climate (Guyana),” 1995 Commercial Guide to Guyana,

U.S. Dept. of Commerce, August 21, 1996)

Guyana’s government is planning to privatize its two bauxite companies,

Berbice Mining Enterprises (Bermine) and Linden Mining Enterprise

(Linmine). The privatization would open 60% majority stakes to help fund

capital improvements at both facilities. (Plunkert, 2000) Reynolds, now

owned by Alcoa, holds a 50% stake in the Bermine operation, and purchased 2

million tons of bauxite from the enterprise in 2000. (Reynolds 10-K,

FY1999)

The IMF has imposed a $70 million structural adjustment program in Guyana

which has targeted nationalized companies. In November 2000, IMF’s

directors “encouraged the authorities to persevere with efforts to

restructure the remaining public enterprises, especially the modernization

of the sugar company, and welcomed their intention to privatize the bauxite

companies.” (IMF, “IMF Concludes Article IV Consultation with Guyana,”

Public Information Notice No. 00/102, Nov. 30, 2000)

– India

Italy’s SACE (State Export Credit Guarantee Corp.) and Mediocredito

have financed $15 millionts toward Bharat Aluminium Co. (Balco)’s purchase

of equipment from FATA Group of Italy. The government of Norway funded a

study of Balco by Hydro Aluminum (Nor) in 1989. In 1984, the U.K. Export

Credit Guarantee Department guaranteed a 25 million pound loan toward the

purchase of four power generators by Balco. The four 67.5 MW units were

provided by GEC of the U.K. (Business Line, August 5, 1998; Mining Journal,

Feb. 17, 1989; Financial Times, July 31,

1984)

The export-oriented NALCO aluminum complex in Talcher-Angul, Orissa, was

built using Pechiney (France) technology, with financing from the French

government (1.05 billion francs). (Aluminium Today, May 1993). The U.S.

Trade and Development Agency recently granted Indalco funds to study the

doubling of production at its Hirakud, Orissa, aluminum plant. Kaiser will

conduct the study and “supply technology for the project,”

according to International Market Insights (March 30, 1998).

In 1995, the IFC approved $25 million in financing toward a coke and power

plant in Andhra Pradesh. The Rain Calcining coke plant in Visakhapatnam,

partially owned by U.S. transnationals Houston Industries Energy and

Applied Industrial Materials Corp., produces 250,000 tons of calcined

petroleum coke for the aluminum industry in India and elsewhere in Asia.

(IFC Annual Report FY1995; The Hindu (India), Feb. 25, 1997, Deutsche

Press-Agentur, Aug. 28, 1995; Ogrin Universal News Services Ltd., Aug. 28,

1995)

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