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Zambia to Build $410 Million Oil Refinery to Lower Costs

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July 16 (Bloomberg) -- Zambia plans to build a $410 million oil refinery as the inefficiency of the only existing facility curbs growth in the economy of Africa’s biggest copper producer, Mines and Energy Minister Christopher Yaluma said.

The state-owned Indeni refinery in Ndola, built in 1973 and operating at about half its designed capacity of 1.1 million metric tons a year, is “done away with, it’s finished,” he said in an interview yesterday in Lusaka, the capital.

Fuel prices in Zambia are among the highest in sub-Saharan Africa, according to the Energy Regulation Board. Investing in refineries will help lower the cost of fuel, the regulator said in a report last year. Zambian consumer prices accelerated to a six-month high in June after the government removed fuel subsidies. A liter of gasoline sells for 9.91 kwacha ($1.81).

The government would be “negligent” if it delayed building a new refinery, Yaluma said.

“We will look at all possible financing models” for the refinery, including public-private partnerships, he said.

To contact the reporter on this story: Matthew Hill in Lusaka at mhill58@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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