Bauxite mining

Bauxite mining

As the gold mining was decreasing in the early 20th century another mineral came to perspective to be explored. Aluminum Company of America (Alcoa) had put its interest in the exploitation of this mineral.

In 1916, the Surinaamsche Bauxiet Maatschappij (SBM) was established by Alcoa and has successfully prospected many bauxite reserves in Suriname. Alcoa was the single operator in this field and began with a bauxite mine on the north east side of Suriname, Moengo. Since 1938, Billiton Maatschappij Suriname (BMS), related to the Australian-owned BHP-Billiton, also entered into bauxite mining in Suriname next to Alcoa.

In the following years the exploitation of bauxite was the main purpose. The bauxite mining took place mainly in the coastal plain. Bauxite findings are registered in the highland areas as well, but they were not included in exploitation till 2015. The Paranam factory from Alcoa started operation around 1940. To meet the energy requirements, the possibilities of a hydro-electric power station at Afobaka were investigated. Opportunities were explored for blast furnace capacities close to the bauxite wells. In the late 1950s, there was a growing awareness that it would be more lucrative for Suriname to process the raw material locally into alumina and aluminum. On February 4, 1957, the Surinamese Government and Alcoa signed a declaration of intent: Alcoa would build an aluminum smelter in Suriname for new bauxite concessions in the country and a hydro dam for generating energy for the smelter. However, due to opposition from the Dutch Government, which refused to issue a guarantee for a loan from the World Bank that was necessary for the construction of the dam, this was canceled.

In 1958, the structure of the so called ‘Afobaka project’ was established between the Dutch Government and Alcoa in the ‘Brokopondo Agreement’. The Surinam Bauxite Company then became Suriname Aluminum Company (Suralco).

The Brokopondo agreement, mainly provided for the construction of a dam, a hydroelectric power plant, a bauxite melting plant, an aluminum mining installation and the extension of the rights to water, bauxite concessions and land for geological research. The agreement was signed for a period of 75 years. Alcoa became the owner of the dam and the aluminum smelter. Suriname received 10% of the capacity of the hydroelectric power plant at cost price. According to the agreement Suriname would become the owner of the hydroelectric power plant in 2033.

Alcoa took upon themselves the costs of the construction of the dam. It was completed in 1964, and in 1965 a hydroelectric power plant of 189 megawatts, an aluminum smelter with a capacity of 60,000 tons per year and an alumina refinery with a capacity of 650,000 tons per year were completed. Suralco also received bauxite exploration concessions until 2032.

Figure 3.10 Afobaka hydro-electric power plant (source History of Mining in Suriname)

After having a booming time and a dominant position in the bauxite supply, with peak moments for aluminum in World War II and after, the bauxite industry in Suriname was facing a continuous decline in demand since last decades of the 20th century and as it entered this century.

Some salient moments leading to the shutdown of bauxite mining in Suriname:

• The shutdown in 1999 of the aluminum smelter;
• The forecasted depletion of 2 major mines in the first decennium of the 21st century;
• The termination of activities by BHP /Billiton Maatschappij Suriname;
• The announcement of Alcoa in 2015 to discontinue its operation in Suriname.

The aforementioned events immediately affected the revenues of Suriname downwards and created a turning point in the mining sector.

As of December 31, 2016, the mining companies are:

Table 3.4 Overview Mining companies /Law/ Fields