PARAMARIBO--The National Assembly on Friday voted 29-13 to approve the terms for the departure of Pittsburgh headquartered multinational Alcoa. Among the terms is that the hydroelectric Afobaka dam controlled by Alcoa and its subsidiary Suralco will be given over to the government of Suriname at the end of this year.
Opinions had varied in parliament with some Members of Parliament (MPs) saying that the pact made too many concessions to Alcoa, while others said it finally freed the country from the multinational’s control.
The vote came after months of hot debate, a week of open meetings, and finally a 25-hour marathon of public debates and backroom negotiations.
Alcoa had been in Suriname since 1916, through its subsidiary Suralco. Its Paranam bauxite refinery once accounted for 72 per cent of the country’s estimated export earnings of US $496.6 million. In the 1960s, Suralco built the $150-million Afobaka Dam for the production of hydroelectric energy. This created the Blommenstein Reservoir, a 1,560km² lake in District Brokopondo, one of the largest artificial lakes in the world.
In 1958, Alcoa had joined with the Dutch colonial government in the Brokopondo Agreement allowing the construction of the Afobaka Dam and giving it to Suralco through 2033, as long as it kept making aluminium there. However, in 2014 the company started gradually winding up refining operations; officials attributed this to “restricted bauxite supply, accompanied by negative world market scenarios.” It was a sentimental moment when mining operations were shut down, the refinery’s furnaces were turned off, the chimneys stopped bellowing smoke and the company closed its doors in November 30, 2015.
Meanwhile, Suralco continued to sell the dam's power to the government but officials argued that the end of aluminium production should, under the Brokopondo Agreement, trigger the transfer of the dam to the government.
The dam produces a large percentage of the nation’s electricity and the country had previously paid the company for the power. Some in parliament demanded that Alcoa guarantee the good function of the dam far into the future, but they got no such promises.
Alcoa and the country will work together to clean up the abandoned mines, ponds of liquid waste and refinery and smelter brownfields. Some criticized that aspect of the pact as providing too much flexibility on the nature and timing of the clean-up. Alcoa, in 2017, estimated future costs of closing its Suralco refining and mining operations in Suriname at $224 million, of which 40 per cent would be covered by Alumina Limited of Australia, which owns a stake in Alcoa’s Suriname operations.
The vote leaves open the door that Alcoa could be involved in the mining of bauxite – the ore of aluminium – beneath the country’s western jungles, though the country can choose another partner.
The political opposition – narrowly outnumbered in parliament – waged an emotional defence against the agreement. Some MPs argued that the country did not know the condition of the dam, had not secured guaranteed funds for environmental clean-up, and that the government cared more about the interests of Alcoa than about the interests of Suriname.
On Friday, members complained that they have been kept on duty for more than 24 hours, had not been able to get decent sleep, bath or eat properly, and even that their children were wondering about their whereabouts. Creating some late suspense, the parliament’s chairwoman Jennifer Simons, a member of the ruling party, sat out most of the debate and the vote.
However, the country's Minister for Natural Resources Sergio Akiemboto waged an equally passionate defence of the pact. He argued that 44 years after Suriname’s independence, it could attain energy independence by taking control of the dam. It could also save millions of dollars and take steps toward developing the dormant bauxite mining sector, with or without Alcoa as a future partner.
Akiemboto said this week that the costs of running the dam are substantially less than the price the company now pays for electricity from the dam. The country, he said, can put the savings into the development of the country and can use the experience it gained from working with Alcoa to take the wheel of its own future, which he said could involve aluminium, gold, gas and oil extraction.
Alcoa, in a statement released late Friday morning, said the vote provides "a detailed plan for the future of our former operations including the handover later this year of the Afobaka hydroelectric facility to the Government of the Republic of Suriname. We thank the Bouterse government and parliament for their deliberate and careful consideration of the agreements, which provide clarity on what comes next," the statement continued. "We will remain in the country for many years to ensure that we meet these commitments."