Zambia Indeni Refinery Closes in September For Maintenance

Jun 28, 2010 (Dow Jones Commodities News via Comtex) -- Zambia's sole oil refinery, Indeni, is slated to close in September for annual maintenance, the country's minister of energy and water development said Monday.

The four-week closure will enable the replacement of old machinery at the state-owned refinery to make it more reliable, according to Kenneth Konga.

The 23,750 barrels-a-day refinery is the main supplier of fuel to Zambia's copper and cobalt mines on the Copperbelt and North Western provinces.

"We have adequately planned for the closure to ensure that there is no fuel shortage," Konga said, adding the government is making it mandatory for oil marketing companies to maintain fuel reserves to safeguard against shortages.

During the closure, government and oil marketing companies will step up imports of refined fuel products, Konga said. Zambia endured weeks of erratic fuel supplies in the third quarter 2009 following the abrupt closure of Indeni.

Konga also said the government is considering seeking a strategic investor for a 50% stake in Indeni. Last year, French oil major Total SA (TOT) sold its 50% stake in the refinery to the government which already owned the other half.

Officials say Indeni requires at least $60 million investments to upgrade its machinery to become more reliable and meet rising fuel demand, mainly from the copper mining industry.

After years of inadequate investments and lack of proper maintenance, Indeni is prone to breakdowns, causing erratic fuel supply in Zambia.