THE DENATIONALIZATION OF CARIBBEAN BAUXITE: ALCOA IN GUYANA

The investigation and analysis of these relationships between aluminium companies and bauxite countries are the task of an on-going study. In this paper the historical basis of these relationships is explored, through an analysis of the formation and early growth of the Aluminium Company of America (Alcoa) and of the process by which that company appropriated to its use the bauxite of Guyana and Surinam. Alcoa is today the world’s largest aluminium company. And its owners were also responsible for the formation of Alcan, the second largest aluminium company, in 1928. Today Alcoa is a major force m the economies of Surinam, the Dominican Republic and Jamaica, and Alcan in Guyana and Jamaica. The basis of these two corporate empires and their subsidiary-colonies in the Caribbean was laid in a period of forty years embracing the last fifteen years of the last century and the first twenty-five years of the present one. It was effected by pursuing a strategy whose important elements were, first of all, the acquisition and exercise of monopoly market power, second, the consolidation of vertical integration from bauxite to aluminium manufacture. Two building blocks of the strategy are here discussed in detail. The first concerns the Alcoa company’s acquisition of the greater part of the known hydro-power potentials in the North American continent by 1926. This is of interest in that it shows how its monopoly position was enhanced by its access to large low-cost power supplies, and by the unavailability of such power supplies to competitors. It also goes a long way in showing why Alcoa had neither a need for nor an interest in the development of power supplies and of associated smelting operations in the Guianas.

The second aspect of Alcoa’s early development to receive detailed examination is its aggressive and determined acquisition of the greater part of the known bauxite deposits of the Guianas by the early 1920’s.

The circumstances of this acquisition demonstrated four things. First, II showed that Guianese bauxite was desired by Alcoa not for the profits to be made on bauxite production as such, but rather to assure and expand the raw material base for the company’s aluminium operations in North America. Second, it shows that the bauxite was also acquired in order to keep it out of the hands of potential competitors and thereby to maintain and enhance Alcoa’s monopoly position in the aluminium industry. Third, they reveal, almost accidentally, the absolute contempt in which the local population – especially the Black population – is held by metropolitan men of business.[1]  Finally, the acquisitions also constitute an important case in the history of the neo-colonization of Caribbean economy in the 20th century. Indeed, the extraordinary detail in which these acquisitions have been documented, partly as a by-product of the U.S. Government’s subsequent prosecution of Alcoa under anti-trust legislation, provides a rare opportunity to analyse the circumstances of this neo-colonization in one industry.