Wednesday, February 15, 2012

BHP not to build Congo plant, setback for hydro plan

BHP not to build Congo plant, setback for hydro plan

Feb 15, 2012
* BHP says will not pursue Congo smelter

* Decision deals blow to Inga 3 hydro project

* Congo says confident of finding other backing

By Jonny Hogg and Bate Felix

KINSHASA, Feb 15 (Reuters) - BHP Billiton's decision to abandon plans
for an aluminium smelter in the Democratic Republic of Congo could
create problems for the planned Inga 3 hydro power project, the energy
minister said on Wednesday.

"The problem is real but there are alternative solutions," Energy
Minister Gilbert Tshiongo told Reuters, but added the government was
confident of finding other backing for the project.

"There are other clients, there is the domestic demand, there is
demand also from the exterior. Inga was not mainly for the exterior
but for interior consumption," Tshiongo said.

BHP spokesman Ruban Yogarajah told Reuters from London that the
company had studied the construction of the smelter, which would have
been powered by the planned hydro project.

"However the company has chosen to not continue the project, which was
still at a very early stage, following a review of its economics,"
Yogarajah said in an e-mail.

He noted BHP would not have been the only customer of the power project.

The Inga project is estimated to cost $8-$10 billion and produce some
3,500 to 7,000 megawatts on the Congo river. The plan has been stalled
for several years with the African Development Bank warning over the

Only about 9 percent of the vast minerals-rich central African
nation's 70 million inhabitants have access to electricity. That is
one of the lowest rates in Africa and the government has vowed to
double the figure by 2015.

A mining boom in the southern province of Katanga has put serious
strain on the country's power resources, with the country's energy
deficit set to rise.

The Inga 3 project is one of the largest proposed power projects in
Africa and seen as crucial to providing sufficient power by 2020 and
spurring Congo's economic growth.

Congo's multitude of rivers offer enormous hydropower potential but a
lack of infrastructure and difficult business climate have made it
difficult to find investors.

The government last year said Inga 3 was planned to come on line in
2018 as part of a drive to reverse the country's energy deficit and
increase production fivefold to 5,132 megawatts by 2020 from 996 last

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