Zambia may shut sole refinery,rely on fuel imports

By Chris Mfula

LUSAKA (Reuters) - Zambia's finance minister said on Thursday the southern African country was considering shutting down its sole refinery, the 24,000 barrels-per-day Indeni plant, and relying on fuel imports for its key copper mining industry.

Finance Minister Situmbeko Musokotwane said Zambia, which wholly owns the Indeni refinery after purchasing a 50 percent stake owned by French oil giant Total, was hesitant to find a new strategic equity partner until a final decision was made on Indeni. .

He said the 36-year old Indeni refinery was expensive to operate. Musokotwane said another option would be to modernise the plant but that this would also depend on the cost.

"We want to decide on the best option of dealing with the fuel problem without pressure from a partner. It would not be right to get a partner on board when we are studying the option of closing the refinery," Musokotwane told journalists.

Zambia relies on the Indeni refinery to supply fuel to the copper mines, the country's economic lifeblood, and also to run other industry and for consumption by motorists.

Zambia has been experiencing acute fuel shortages in recent weeks, after the collapse of a key refinery component at the Indeni refinery. The shortages threaten to reverse the economic gains made by Africa's largest copper producer.

The government said last week the country had imported 100 million litres of diesel and 60 million litres of petrol since early November to make up for disrupted output at Indeni.

Indeni, when working at full capacity, gets through 90,000 tonnes of crude oil every 45 days, according to company data.

Zambia's energy minister Kenneth Konga said a fortnight ago that the government was exploring listing some Indeni shares on the Lusaka bourse and would seek a strategic partner in a bid to recapitalise and revamp its operations. .