Headlines:
| Possible job cuts looming in the bauxite sector |
|
|
| Thursday, 04 December 2008 | |
 Massive lay-offs and redundancies could be on the horizon
in the local Bauxite and Alumina industry as the worsening crisis in the global
economy spreads closer to home.Minister of Mining and Telecommunications Derrick Smith disclosed Thursday morning that the shedding of jobs cannot be ruled out in the next 18 to 24 months. Mr. Smith hosted a press conference at his ministry to update the country on the latest developments in the industry. Just over 3,500 persons are directly employed to the three alumina companies as well as at the sole bauxite mining operation in the country. With the deepening crisis in the global financial system casting a pall of gloom, the plummeting demand for bauxite and alumina on the international front could result in hundreds of those workers put out of a job. Grim prospects  According to Mr. Smith, the prospects are grim."Based on what is currently happening and what some observers are suggesting could happen in the next 18 to 24 months, one cannot rule out the possibility of lay-offs ... I'm not here predicting lay-offs but it cannot be ruled out because there's tremendous uncertainty right now." The Minister said the closure of the local operation is not being contemplated in the ongoing talks that are being held to assess the state of the industry. While refusing to divulge the finer details of efforts to mount a protective buffer for the bauxite/alumina industry, Mr. Smith said a strategy has been crafted. Worst yet to come According to him, this will ensure that the local industry is not future battered by the worst of the global financial crisis which is yet to come. "A decision was taken to closer monitor, on a week by week, day by day basis, what is happening internationally and how it's impacting on the local industry. A decision was taken that we would appoint small teams from the respective companies and small teams from the Government agencies to communicate and keep abreast of what is happening," he said. Cutting levy And the Government says a request from mining companies to relax the bauxite levy is part of the discussions that the administration, unions and bauxite companies are now engaged in to counter the effects of the decline in the sector. According to Mr. Smith, his ministry is anticipating that inflows of foreign exchange earnings from the bauxite levy could be eroded next year, if the demand for bauxite and alumina continues to decline. "Based on how the inflows structure is managed, if the trend continues, the fall off will not be felt this year but come 2009." Last year, the Government raked in approximately US$110 million in levies, tax and royalties from the bauxite companies. |