(Adds quote from Konga, details.)

The Zambian government has decided to buy French oil major Total SA's (TOT) 50% stake in the country's sole petroleum refinery due to its strategic importance to the economy, the minister of energy and water development has said.

In a statement seen by Dow Jones Newswires Tuesday, Kenneth Konga said talks with Total are in advanced stages and are likely to be concluded this week. The Zambian government already holds 50% in Indeni Petroleum Refinery.

"The government...had considered all the options and decided that it would be in the best interests of the country for government to acquire Total's shares in the refinery," Konga said.

Indeni is the leading supplier of fuel to Zambia's copper and cobalt mines.

According to Konga, the government is now negotiating the sale agreement with Total. Details of the transaction cannot be revealed at this stage because talks are still underway, he said. Total couldn't comment on the transaction.

Total acquired a 50% stake in the 20,000 barrels a day refinery in 2001 from Agip SpA. Total assumed the supply of crude oil feed stock to the refinery in 2002 following the liquidation of Zambia's National Oil Co., but stopped in 2007 after disagreements with the Zambian government.

The government has since been procuring feed stock for the refinery but delayed deliveries have caused erratic fuel supply in the country in the past couple of years, hurting copper mining operations.

Konga said taking full ownership of the refinery will enable the government to make swift decisions regarding the import of crude oil. In the past two weeks, Zambia has been grappling with a fuel shortage blamed on faults at Indeni.

Analysts say up to $60 million is required to overhaul the ageing refinery to avoid unplanned shutdowns.

Fuel consumption in Zambia is on the rise mainly due to increasing copper mining operations and a shortage of electricity, which is compelling companies to resort to fuel fired generators.

Copper mines consume more than 50% of imported fuel in Zambia.

-By Nicholas Bariyo, Contributing to Dow Jones Newswires; +256 75 2624615; bariyonic@yahoo.co.uk