BHP Billiton eyes Congo's Inga dam complex to power new $3 bn aluminum smelter

14 November 2007

According to Bloomberg, the plant would require the use of up to two-thirds of the dam's output. The World Bank previously indicated that it may be willing to support the expansion of the dam.

Bloomberg recently reported that BHP Billiton, the world’s largest mining company, has signed an agreement with the Democratic Republic of Congo (DRC) to pursue the construction of a $3 billion aluminum smelter. As part of the agreement, the Australia-based company will finance a pre-feasibility study on the expansion of the Inga hydroelectric dam complex in southwestern DRC.

According to Bloomberg, BHP would require 2000 MW of electricity to operate the plant, and has set its hopes on exploiting the hydroelectric potential of the Congo River at the site of the proposed Inga 3 dam. Experts estimate that Inga 3 could yield between 3000 and 3500 MW of electricity. The World Bank is currently financing the rehabilitation of the Inga 1 and 2 sites, which are operating at less than half their combined capacity of 1700 MW. The Bank previously indicated that it may be willing to support the construction of Inga 3.

BHP’s intention to consume up to two-thirds of Inga 3’s output has been met with consternation in southern Africa. As reported in Business Day, a consortium of regional power companies called Westcor had already signed an agreement with the DRC to study the viability of the project, which was expected to form the centerpiece of the regional partnership that envisions the interconnection of electricity grids in the DRC, Namibia, Angola, Botswana, and South Africa. The World Bank, the African Development Bank, and the European Investment Bank have all expressed interest in pursuing the project with Westcor.

The prospect of developing a massive, revenue-generating, centralized infrastructure project in a country suffering from ongoing political instability and weak government capacity for project oversight, infrastructure maintenance and revenue management has generated some concerns locally and internationally. Moreover, the project is seen by many as a first step toward the construction of the ambitious Grand Inga complex, which is reported to have the potential to produce between 35,000 and 40,000 MW of electricity, over twice the generation capacity of the Three Gorges Dam in China. Estimated at $50 billion, this massive project is being touted not only as the solution to Africa’s electricity deficit, but also as a viable source of energy for export to the Middle East and Europe.

The proposed projects at Inga raise significant concerns regarding the risks of reliance on hydropower at a time when Africa is becoming increasingly susceptible to climate change-induced drought. Furthermore, in a country where only 6 percent of the country’s population has access to electricity, critics charge that the expansion of Inga is geared to serve large mining interests, and will not contribute meaningfully toward increasing electricity access for the poor, particularly in rural, off-grid areas.

Resources

• Inga Dam project webpage, International Rivers
• BHP Billiton to fund Inga III feasibility study in DRC, Water Power Magazine, October 24, 2007 (IWPDC website)
• BHP Billiton signs Congo smelter deal by Charlotte Mathews, Business Day, October 23, 2007 (AllAfrica website)
• BHP may build $3 billion Congo aluminum smelter by Antony Sguazzin, Bloomberg, October 22, 2007 (Bloomberg website)