BHP Aluminum Smelter is Key to Hydropower Project on Congo River

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Written by Richard Finlayson, Senior International Editor for Industrial Info--BHP Billiton Limited (NYSE:BHP) (Melbourne, Australia) could be the anchor client for power from the proposed Inga 3 hydropower project in the Democratic Republic of Congo (DRC).

BHP was considering using 2,000 megawatts (MW) from the plant for its 800,000-ton-per-year aluminum smelter project, according to comments made by the company for the past four years. DRC's energy minister has now said that 3,500 to 4,200 MW from Inga 3 would be prioritized for BHP, which is in talks with the government about the construction of both the hydropower project and the smelter in the Bas Congo province. Both projects are said to be in the early conceptual stages. The government is targeting 2020 as the date for the hydro scheme to become operational. The DRC will face a power shortfall of more than 800 MW by 2015 as demand rises, driven by the country's mining sector.

Inga 3 is a phase in the Grand Inga power project that calls for an investment of $22 billion to generate about 40,000 MW of power, which is almost twice the capacity of China's Three Gorges hydropower scheme. A survey of the rivers in the Congo system estimated that 100,000 MW could be produced at 341 sites. Currently, about 2.5% of that total is available, and the DRC has 2,643 MW of installed hydro capacity, of which 1,382 MW is in use.

The DRC needs an additional $6.4 billion through 2016 for the rehabilitation and construction of its power network and $22 billion project in capital between 2015 and 2025 for Inga 3 and the Grand Inga dam on the Congo River, which has the second largest flow by volume after that of the Amazon. Inga 3 is estimated to need an investment of $8 to $10 billion and will generate up to 5,000 MW. The final power capacity of Inga 3 has yet to be confirmed. Discussions on the scheme have taken place for the past decade, and project capacities ranging between 2,250 MW and 5,000 MW have been proposed at various times.

The government is hoping to fast-track Inga 3 and begin construction on the project by 2014. A pre-feasibility study on the project is scheduled for delivery by September this year. By then it should be clearer what BHP's final role will be in the scheme. The government sees that having the company as the anchor client would assist in fundraising. BHP could become a shareholder in the company that establishes and manages the plant.

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