Bloomberg News

Exxaro, Tata Venture Considering Congo Hydroelectric Plant

June 05, 2012

Cennergi Pty Ltd., a joint venture between Tata Power Co. (TPWR) and Exxaro Resources Ltd. (EXX), may build a hydroelectric plant in the Republic of Congo to supply power to Exxaro’s Mayoko iron-ore project.

Exxaro, South Africa’s second-largest coal company, plans to boost profitability by expanding into iron ore at the Mayoko project, which has the potential to yield as much as 2.5 billion tons of ore, said Ernst Venter, Exxaro’s general manager for business growth. Infrastructure such as railways, harbor facilities and power is needed to develop the project, which is expected to start production in 2013, Venter said.

“The potential is there” for a hydropower plant in Congo, Venter said in an interview at an iron-ore conference in Cape Town. “We’re in the business of iron-ore mining, but we have to enable that.”

Republic of Congo, sub-Saharan Africa’s fourth-biggest oil producer, experienced a civil war from 1997 to 1999 that left at least 10,000 people dead, forced 800,000 people to flee their homes, and damaged infrastructure. Pretoria-based Exxaro is speeding up development of the Mayoko project after a failed bid for Territory Resources Ltd. in 2011.

Exxaro gained 2.2 percent to 193.25 rand at the close in Johannesburg, compared with the 0.1 percent advance of the FTSE/JSE Africa All Share Index. (JALSH)

Wind-Power Plant Bids

Cennergi, based in Pretoria, had bids for two wind-power plants, including one to generate 139 megawatts, approved by South Africa’s government this year and has submitted bids to generate hydroelectric power under the nation’s renewable-energy program, Venter said. The company may consider a listing once the projects are operational, he said.

Initial exploration at four sites at the Mayoko mine identified a resource of 400 million tons, Venter said. The project may yield an additional 2 billion tons as adjacent areas are explored, he said.

Exxaro will also develop port facilities at an area north of Congo’s Pointe-Noire harbor to export ore from Mayoko, Venter said. The company is in talks with the government about developing rail to handle iron-ore exports, he said.

To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus