New Billion Dollar Bio-Fuel Plant In South Africa

The Ethanol Africa plant, located in the town of Bothaville in the country's central Free State province, will be the continent's first billion-dollar factory to make bio-ethanol from maize, as Africa races to find alternative energy sources in the face of soaring oil prices. The plant is expected to be in full production next year, making up to half-a-million liters of bio-ethanol a day.

"Declining oil reserves in world has left open a market gap for biofuels," Ethanol Africa's chief executive Johan Hoffman said at a ceremony on July 25, marking the construction of the 74-acre plant in the town, situated about 140 miles southwest of Johannesburg.

An alcohol, bio-ethanol is made from maize, wheat, beetroot or sugar cane and is used as a blend component in fuel in the U.S. and Europe. It increases octane production while giving cleaner emissions. Sweden for instance has the world's largest ethanol bus fleet, while the EU in 2005 urged a consumption target of 2% for biofuels and other replacements for petrol and diesel.

Hoffman said the Bothaville plant was the prototype of seven more that would be erected in future years and which by 2015 was expected to supply 12.5% of the country's fuel needs -- adding to the 40% already produced synthetically from coal and gas.

Hoffman said that contrary to popular belief, he was convinced bio-ethanol could be produced at less than $90 per barrel. "I have international statistics at hand that clearly show profitability at prices lower than $50 per barrel," he said.

Copyright Agence France-Presse, 2006

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