By NICHOLAS BARIYO
The Zambian government said it has approved the sale of at least 49% of its sole oil refinery, as the copper producing nation seeks an investment partner to recapitalize the aging plant.
Zambia Development Agency, the state investment body, is in talks with a number of parties interested in investing in the Indeni Petroleum Refinery, which supplies fuel products to the country's vast copper and cobalt mines, the energy and mines minister, Christopher Yaluma, said in a statement. Mr. Yaluma didn't say who the interested companies are.
Zambia imports nearly all its crude from the Middle East, but the landlocked nation wants to lower its energy costs by sourcing crude from neighboring Angola. Government officials say the refinery requires urgent upgrade works to enable it to refine crude from Angola.
"Cabinet has approved the letting go of 49% shares in Indeni to a private investor to boost funding," Mr. Yaluma said, adding the government is also looking for at least $410 million to build a new refinery to ensure stable fuel supply
. The bulk of the country's fuel products are supplied to copper mines in the Copperbelt and North Western provinces.
The 24,000 barrels a day refinery, located in Copperbelt province, has broken down several times in the past couple of years, plunging the southern African nation into a fuel crisis.
In 2009, the Zambian government bought Total'S 50% stake in the refinery to become its sole owner.
Indeni processes crude pumped through the 1,060-mile Tazama pipeline from the Tanzanian port city of Dar Es Salaam.
Dow Jones Newswires