Business

A struggling country's past and future is shaped by Alcoa’s aluminum industry

Osyanda Misidjan, 17, washes dishes on the banks of the Coermotibo River in her village of Adjuma Kondre, Suriname. Once surrounded by rainforest, the green palm trees and valley soccer field of the village are now surrounded by stony, bauxite-red plains left over from Alcoa’s mining operations that ceased in 2015.
Osyanda Misidjan, 17, washes dishes on the banks of the Coermotibo River in her village of Adjuma Kondre, Suriname. Once surrounded by rainforest, the green palm trees and valley soccer field of the village are now surrounded by stony, bauxite-red plains left over from Alcoa’s mining operations that ceased in 2015.

It electrified this South American country even as it drowned a jungle, so the 1.2-mile-long dam Alcoa built here to harness the Suriname River is more than stone and turbines. It’s a symbol, in this tropical land of 560,000, of progress, trauma and a global company’s ability to dominate a little country’s landscape and society.

Now Alcoa Corp. is leaving Suriname, and the Afobaka Dam’s future rivets everyone from the capital’s dealmakers to the forest’s subsistence farmers.

In a struggling country roughly the size of Georgia, just north of the equator, Alcoa’s decision to permanently end mining and refining has delivered a resonating blow.

Alcoa, the aluminum company founded in Pittsburgh in 1888 and now based in New York, eventually spanned six continents. North Carolina has been involved in a long-running court dispute with Alcoa over the aluminum company’s former hydroelectric dams on the Yadkin River, about 50 miles northeast of Charlotte.

The company set up shop in Suriname in 1916 when it found bauxite beneath the jungle floor. Cutthroat conditions in the global aluminum market compelled a shutdown in November 2015.

Halfway through that century, Alcoa finished the dam, flooding a forest people’s heartland but also jolting a plantation-based economy into the industrial age. Alcoa created mammoth mining and refining sites and raucous river towns, building a middle class while toughing out a nation’s independence, civil war and an unstable government.

“You need to understand that after 100 years of (Alcoa) being in Suriname, this thing is so emotional for Surinamers,” said Ruben Halfhuid, managing director of Suralco, the Alcoa subsidiary in the country. “But there are also people who are thinking of these things ... in an adult way.”

Controversial negotiations between the company and the government – focused largely on the dam but also on environmental and humanitarian issues – are coming to a head, even as protests against the president’s economic policies clog the streets.

Alcoa’s departure from a country with little global profile could test the company’s commitment to a sustainable approach to metals.

“We are not strong against a company like Alcoa,” said Jennifer Simons, chair of Suriname’s National Assembly. “This is a very large thing for a small country.”

In March, a Pittsburgh Post-Gazette team, supported by the Pulitzer Center on Crisis Reporting, visited Alcoa’s dam, crumbling towns that the company had built, abandoned strip mines, jungle resettlement villages and halls of government that echo with accusations of secret deals. Visit http://newsinteractive.post-gazette.com/suriname/ to explore the close of Alcoa’s Suriname century through those places and their people, from the business magnate negotiating the dam’s future in the capital to the elderly matrons who still recall their flight from jungle villages as the reservoir filled.

Alcoa in North Carolina

To get a sense of how Alcoa might fight an effort to seize the dam, Suriname’s government is watching a dispute over Alcoa’s former Yadkin hydroelectric dams in Badin, N.C., 2,600 miles to the north.

North Carolina sued the aluminum producer in 2013, more than a decade after Alcoa closed a smelter there. The state’s argument was the same as Suriname’s: You closed up shop, so the dam is ours.

“The benefits of the Yadkin River belong to North Carolina’s people,” then-Gov. Pat McCrory said at the time the lawsuit was filed. “We should be able to use it for North Carolina water needs and to create North Carolina jobs.”

A federal judge disagreed, ruling in 2015 that Alcoa had proved it owned portions of the Yadkin River where its four hydroelectric dams are located. The state appealed the decision, but the federal appeals court affirmed the lower court’s ruling this month.

In the meantime, Alcoa sold the Yadkin dams to an affiliate of Cube Hydro Partners, whose portfolio includes two dams on the Allegheny River in Freeport, one on Mahoning Creek in Armstrong County, and another on the Cheat River in Monongahela, W.Va.

Arconic, the new company created in November when Alcoa separated its parts and components business from its mining, refining and smelting businesses, received $238 million from the sale of the Yadkin dams and expects another $5 million in additional payments.

The immediate future of North Carolina’s economy did not hinge on the dam case. Alcoa’s decision to leave Suriname, though, came as the country entered a period the locals call “the crisis” — a decline in gross domestic product of 10 percent last year, combined with 55 percent inflation. Strikes, power outages and floods have added to the tumult. This month in Paramaribo, thousands of people have repeatedly protested against the government and its failure to stop inflation.

Pittsburgh Post-Gazette

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