DRC hydropower gets a R3.95 bn electrical surge
Glencore, Congo partner refurbish main plant
GLENCORE and its partner in Congo are ploughing $360 million (R3.95 bn) into refurbishing the African nation’s main hydroelectric plant as mining companies seek ways to overcome power shortages that are holding back projects.
Mining investment has poured into the Democratic Republic of Congo since 2006, after the 1998-2003 war ended and an election drew a line under decades of dictatorship. Last year, Congo beat out Zambia to become Africa’s main copper producer with output of 914 631 tons.
But companies seeking to tap some of the world’s biggest undeveloped mineral reserves say power shortages are preventing development.
Prime Minister Augustin Matata Ponyo told companies in January to halt any expansion plans that required extra power in the south-eastern mining heartland of Katanga province.
“If you want to (produce) 1.5m tons of copper, this is only possible if you solve the energy problem,” said Pieter Deboutte, who sits on the board of Mutanda Mining, a copper project owned by Glencore and the Fleurette Group, which is controlled by Israeli billionaire Dan Gertler.
With demand for generation capacity of 912 to 1 202 megawatts, Katanga is facing a deficit of up to 734MW, according to an August report from national utility company SNEL.
Mutanda’s Kamoto mine in Katanga suffered more than 862 hours of power interruptions between May and September, according to company fig- ures. Until now Mutanda has resorted to importing energy from Zambia at up to twice the price of domestic power and using diesel generators that cost $3m a month.
Glencore and Fleurette have now decided to take matters into their own hands by repairing two turbines at SNEL’s 1 424MW Inga 2 hydropower plant and upgrading about 2 000km of transmission lines to take the power to Katanga.
The plan is to produce 450MW, with 380MW reserved for Kamoto. Mutanda will recoup the cost through reductions in utility bills, Deboutte said. “The model here is you bring what you need,” said Oscar Melhado, the International Monetary Fund’s representative in Congo.
Randgold Resources, which poured the first gold at its Kibali mine in Congo’s remote north-east last year, opted for this do-it-yourself strategy from the start. “We just got on and built our own hydropower stations,” said Mark Bristow, chief executive of Randgold, which runs the mine in a joint venture with AngloGold Ashanti and state miner Sokimo.
Congo’s hydroelectric-potential ranks third behind China’s and Russia’s, according to the World Bank, but mismanagement has left 90 percent of its roughly 65 million people without electricity.
For the long term, the government is counting on a new Inga 3 hydroelectric project with 4 800MW of capacity. Construction of the dam is set to begin next year and be completed in 2020, according to SNEL.
Some 1 300MW will be reserved for the mining sector and another 2 500 MW will be sold to South Africa. The remaining 1 000MW will go to domestic consumption. – Reuters