March 7, 2014 / 12:42 PM / 4 years ago

Freeport says Congo mine can weather power-rationing

KINSHASA, March 7 (Reuters) - Mining company Freeport McMoRan said on Friday power rationing in the Democratic Republic of Congo would not affect its operations in the short term but that future expansion plans would depend in part on a reliable energy supply.

A letter obtained by Reuters showed that Prime Minister Augustin Matata Ponyo had ordered mining companies to suspend expansion projects due to an energy deficit in Congo’s copper-rich Katanga province.

In the letter dated Jan. 10, Ponyo also outlined a system of power rationing meant to mitigate Congo’s inability to meet mining companies’ electricity demands.

However, a spokesman for Freeport McMoRan said the company’s massive Tenke Fungurume Mining (TFM) project in Katanga would not be immediately affected by the proposals.

“There is currently sufficient power available for TFM to run its operations,” Eric Kinneburg said in an email to Reuters.

“We have experienced intermittent outages over the last several months and have been working with authorities to resolve the issues,” he added.

Kinneburg said TFM had committed to investing some $220 million in efforts to secure reliable power. The company has undertaken the refurbishment of four turbines at a local hydropower station, he said.

Congo’s mineral wealth - including large deposits of diamonds, gold, copper, cassiterite and coltan - attracts investors from across the globe.

Mining contributes 30 percent of Congo’s gross domestic product (GDP) and 80 percent of export revenues, Ponyo said in the January letter.

However, mining operations have been hamstrung by insufficient power supply. Of the estimated 900 MW miners in Katanga require, Congo can provide only 461.7 MW, according to Ponyo.

The International Monetary Fund said copper production in Congo jumped 52 percent to a record 942,000 tonnes last year. That would make it the largest African copper producer, according to commodities analyst CRU Group.

Similar growth in output is unlikely in 2014 as current operations reach capacity and expansion plans are put on hold due to the energy deficit.

“Future expansions are subject to a number of factors, including economic and market conditions, the business and investment climate in (Congo), and the condition of certain infrastructure in Katanga such as power availability and transportation,” Kinneburg said.

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