As Glencore’s deadline to invest R6 billion in a Cape Town refinery that was damaged in an explosion several years ago approaches, the company is in negotiations with the South African government about its future.
The commodities-trading company agreed, when it bought the plant, to make the investment in the facility within five years, a period that ends near the end of this month.
Glencore has said it remains committed to the investment.
The Department of Trade, Industry and Competition "can confirm that it is in negotiations with Glencore and the two are on course to reach an agreement”, it said by email, without specifying a timeline.
"The department is confident that once an agreement is reached and signed, the committed funds will be spent accordingly."
South Africa’s refining system has been plagued by underinvestment, with the nation losing about half of its oil-processing capacity in recent years.
Plants have closed as cleaner fuel specifications loom, though fires and floods have also been a factor.
Glencore and local partner Astron Energy "remain committed to spending R6 billion to upgrade the refinery and thereby support an ongoing refining industry in South Africa”, the trader said in response to questions.
It’s not clear how much Glencore has invested so far.
Investments had been made in the facility, and production levels were in line with commitments, the company said, adding that it maintained communication with the government over additional progress.
The company acquired the 100 000-barrel-a-day refinery from Chevron Corp five years ago, usurping a bid from China Petroleum & Chemical Corp. It owns the asset through a majority holding in Astron.
Source: News24
