The Zambian government and French oil major Total SA (TOT) are set to invest up to $65 million in the country’s sole petroleum refinery, Indeni, in the next five years as the country seeks to stabilize fuel supply to its vast copper mines, according to a report from the Ministry of Energy and Water Development obtained by Dow Jones Newswires.
Total and the Zambian government each hold 50% in the Indeni refinery, which closed Jan. 2 for restoration work. It started partial output last week and is expected to be fully operational by the end of this week, industry insiders said.
The report also said Zambia is also seeking to blend refined petroleum products with biofuels such ethanol from molasses and biodiesel from jathropha trees in a bid to guarantee security of supply and reduce dependence on imports.
The report said the government has realized the scale of the growing demand of fuel, led by the mining and manufacturing sectors, and has put in place a strategic reserve fund to stabilize fuel supply. Oil marketing companies are also expected to keep 15-day fuel reserves to avoid a crisis.
Investment in the Zambian mining industry continue to rise significantly, spurred by a recovery in copper prices on the international market and increased copper demand from China.
Zambia’s 2007 copper output is seen at 600,000 metric tons, rising to over 700,000 tons in 2008.
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