In 1971, the government of Guyana nationalized the Demerara Bauxite Co. (Demba), a subsidiary of Alcan Aluminium Ltd., which had been in operation since 1916. This paper aims at clarifying the interaction between Alcan and Guyana until nationalization from the viewpoint of the balance and shift of bargaining power between them.
The major findings of this paper are as follows :
(1) Unlike the cases of other extractive industries such as copper in Chile and oil in Venezuela, the Guyanese government intervention into Alcan occurred much later. Guyana was a colony of England until 1966, and England depended heavily on Alcan for its supply of bauxite ore and aluminum products especially during the two World Wars. These reasons weakened the bargaining power of Guyana and explain why intervention occurred much later.
(2) Alcan was able to maintain its strong bargaining power which was derived from its mainstream bauxite-aluminum operations through the existence of alternative supply sources of bauxite and high entry barriers to the industry.
On the other hand, calcined bauxite, which can only be produced in Guyana as it is not found in any other country, gave it bargaining power over Alcan.
In conclusion, the interaction of these two forces formed a double bargaining power structure. The nationalization of Alcan by Guyana can be said to be brought about by the latter force.