London-based Glencore Energy has been awarded a $1 billion contract to supply 1.4 million tonnes of petroleum feedstock to Zambia over a two-year period, the public procurement authority said on Tuesday.
Zambia is the continent’s top producer of copper and uses diesel in mining, the backbone of its economy.
“The Central Tender Committee gave the final authority to award the contract to Glencore Ltd UK on the 15th March 2010,” Zambia Public Procurement Authority (ZPPA) spokeswoman, Hazel Zulu said.
Zulu said the contract with Glencore would be financed through an existing PTA Bank lending facility with the government.
Other companies that had tendered for the contract are Kuwait’s Independent Petroleum Group (IPG), Lukoil International Trading and Supply Company (LITASCO) of Russia, Vitol SA, Trafigura SA, Addax Energy SA and Kenya’s Gulf Energy Ltd.
IPG’s deal for the supply of oil to Zambia expired in December.
Zambia has been importing petrol and diesel to operate its copper mines, the country’s economic lifeblood, following a government delay to conclude an oil supply agreement with a supplier and also constant breakdown of its sole Indeni Oil Refinery.