The case against an aluminium smelter

Published: 25 May 2009
http://guardian.co.tt/commentary/letters/2009/05/25/case-against-aluminium-smelter

Prime Minister Patrick Manning recently sang the praises of the aluminium smelter plant to be constructed in T&T, highlighting the many business opportunities that will come from it for the local economy, as well as other regional economies.

There was an interesting article in Newsweek magazine last month that focused on the richest men in Russia and how the global recession had severely diminished their wealth, as most of them had invested in the oil and metals industries, aluminium in particular, which were now in a severely depressed state.

Aluminium prices had fallen from US$3,200 a ton in mid 2008 to US$1,200 a ton, leading to massive unemployment in the industry and much unused industrial capacity. These previously super-wealthy individuals were now going to the Russian Treasury cap in hand for bailouts to keep these industries from melting down completely.

In addition to this unsettling situation, a brief Internet search further revealed that almost every energy-based economy in the Middle East, as well as Russia, Canada, USA, Australia, Brazil, Argentina, Japan and a few others, have a well established aluminium producing capability which is under-utilised at present and in financial difficulties. Even if/when the world economy recovers, the uncertainty of the viability of this undertaking should cause the decision makers to pause and wonder if this will be money well spent, in view of the presence of so much competition.

Further, the proposed size of the facility in T&T (120,000 tons annually) is relatively small, and the tax revenue to be earned by the Government in the best of times will be miniscule (less than one per cent of current tax revenue) compared to the cost of the enterprise. To add to the above, the local newspapers have reported that residents living near the proposed site for the aluminium plant in La Brea are required to be tested for cancer every two years as a direct consequence of setting up the facility. One has to wonder why embark on this enterprise at all if there is even a remote chance of damage to the environment and the health of citizens.

The financial resources for the smelter could be much better used in the development of local agriculture which will provide food for local consumption, and the raw material for further downstream industries which are self-sustaining and critical for small economies which historically have been too exposed to the volatility of international trade.

C Rodriguez
Petit Valley