February 26, 2010 / 11:20 AM / 7 years ago

BHP seeks Congo power project to replace Westcor

* BHP wants 2,500 MW plant to feed proposed aluminium smelter

* Plans $5 bln smelter and $3.5 bln plant to go live in 2018 * Inga X vies for same spot at Westcor's abandoned Inga 3

By Katrina Manson

KINSHASA, Feb 26 (Reuters) - BHP Billiton (BLT.L), the world's biggest mining company, wants to build a $3.5 billion 2,500 MW hydro power plant in Democratic Republic of Congo to support its proposed aluminum smelter, according to a company presentation obtained by Reuters.

The proposed Inga X project, to be presented to Congo's presidency on Friday, would replace a rival 5,000 MW project for the same location put forward by Westcor and rejected by the government last weekend -- a venture that would have exported the bulk of its power to southern African neighbours.

"It's very sad, they (DRC) made the wrong choice," Pat Naidoo, chief executive of Westcor, said. Westcor, or the Western Power Corridor, is a joint venture between five southern African governments and utilities.

BHP's Inga X plan envisages a power plant on the Congo River to supply a proposed $5 billion aluminium smelter 150 km away that would process 2 million tonnes of Guinean alumina per year into 800,000 tonnes of finished aluminum, according to the presentation.

"Even despite the global economic ciris, BHP Billiton always considered its aluminium smelter project in DRC a priority," according to the presentation. "BHP Billiton is ready to realise the project Inga X in partnership with the DRC in a public-private partnership."

A BHP official was not immediately available for comment.

WESTCOR SEEKS NEW SITE

Westcor's Naidoo said it was looking for alternative sites for its much larger $8-10 billion project, which would have supplied 3,000 MW of much-needed power to South Africa's Eskom and 1,000 MW to Angola, Botswana and Namibia by 2015.

"It gives Eskom more problems -- 2-3,000 MW has now dropped off their radar," he said.

"It could probably be relocated to another site on the Congo River closer to Kinshasa if the family gets together again," he said, discussions on the project would resume in April. "Hopefully sanity will prevail."

BHP's plan, which it says is "enough for the urgent needs" of BHP and DRC, proposes a two-year feasibility study from mid-2011 until mid-2013, starting construction in June 2014 and powering up from 2018 at the same time as the planned smelter.

The company said in the presentation it would employ 1,200 permanent staff and 1,600 sub-contractors, along with 9,000 people during construction.

Congo's existing Inga 1 and Inga 2 hydropower generation projects, meanwhile, are facing refurbishment delays that could slow expanded electricity output.

The World Bank is applying to its board for a three-year extension to 2016 and an extra $300-400 million to rehabilitate poorly functioning plants.

The dams are running at about 700 MW out of a capacity of 1,700 MW.

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