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More cash for rail line in central Africa to bypass SA's logistics logjam

Lobito corridor is key to US-Africa critical metals trade

A Transnet Freight rail line, next to tonnes of coal from the nearby Khanye Colliery, at the Bronkhorstspruit station. File photo
A Transnet Freight rail line, next to tonnes of coal from the nearby Khanye Colliery, at the Bronkhorstspruit station. File photo
Image: SIPHIWE SIBEKO/Reuters

The US will commit additional funds for the construction of the Lobito Corridor, a rail link to export metals from Central Africa's Copperbelt, US energy envoy Amos Hochstein said on Wednesday.

The US has been supporting the project linking mineral-rich Democratic Republic of Congo (DRC) and Zambia to Lobito port in Angola. The link seeks to bypass logistics bottlenecks in South Africa that have held up copper and cobalt exports.

In 2022, a consortium led by global commodities giant Trafigura, Portugal's Mota-Engil and Vecturis of Belgium was awarded a 30-year concession for railway services and support logistics on the Lobito Corridor. The consortium plans to spend $455m (R8.62bn) in Angola and $100m (R1.89bn) in the DRC on equipment, operations and infrastructure maintenance.

Additional funding is required to extend the 1,700km line into Zambia in the second phase.

“We have committed to finance $250m (R4.73bn) for the Angola phase one. I expect we will commit additional resources in the same range for the second phase,” Hochstein said in an interview before an investment forum on the project in Zambia.

The first phase involved upgrading the rail line on the Angolan side and the second phase will involve building a new multibillion dollar rail through Zambia and beyond, he said.

“I expect we will start seeing significant volumes using the rail by June-July,” he said, without giving figures.

The Africa Finance Corporation (AFC) was selected as the project manager, Hochstein said.

AFC already had financing commitments from the US, the EU and African Development Bank, which would bring in extra private sector financing, he said.

Hochstein welcomed the announcement on Wednesday by mining firm Ivanhoe Mines that it had signed up to use the rail line for its copper exports from the DRC.

“That's critically important because it shows commitment by the private sector to this project. It will also make financing cheaper.”

The US would benefit from accelerated trade with the region, which has the necessary minerals that would be needed for energy transition away from fossil fuels.

Hochstein said the US was contemplating implementing other similar projects in Africa and elsewhere in the world.

“Within Africa, I expect to have at least one more in the next year,” he said, without specifying where.

Reuters


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