The Scramble for Benguela Railway Begins as Angola Spends $2b on Rail Modernisation

A railway line in Angola, but at the service of an entire region, which, by starting at the Port of Lobito, may reach Dar-es-Salaam, Tanzania, and eventually Mozambique-Angolan Transport Minister

● Why Lobito Corridor is Important to Zambia, DRC & Angola

The scramble for Benguela Railway has commenced as Angolan state has invested over US$2 billion (€1.6 billion) in the rehabilitation and modernisation of the Benguela Railway, the minister of transport announced on Wednesday.

Ricardo de Abreu was speaking at the ceremony to launch the international public tender for the management and concession, for 30 years, of the Benguela Railway, known as the Lobito Corridor.

According to the minister, the investment aimed to rehabilitate and modernise the infrastructures and to circulate means of the Lobito corridor, to make it available to economic agents and the population, as well as to citizens of the neighbouring Democratic Republic of Congo and Zambia, as well as allowing for increasingly greater regional and intercontinental integration of the economies of those countries.

“We are certain of the decisive factor for increasing the global competitiveness of the region’s export products and for reducing the cost of living of the populations of our countries, which the efficient and safe operation of the Lobito corridor can bring,” he said.

The minister noted that today’s tender “is based on international best practices and requirements and the strictest respect for current legislation and regulations, to ensure, due to its global relevance, the attractiveness and legal safety for private participants and simultaneously the legitimate defence of national public interest and direct and indirect economic compensation for the Angolan state.

The Benguela railway, Abreu noted, has great potential that goes beyond the limits of Angola and is a regional landmark, which generates many expectations on the continent due to the high number of consumers in the region where it will circulate, in the interior of the country, and DRCongo and, in the future, Zambia.

“This is the moment to prove to ourselves and to our brothers that the investment made in the rehabilitation and modernisation of the Benguela Railway was not in vain and will soon bear its deserved fruit. A railway line in Angola, but at the service of an entire region, which, by starting at the Port of Lobito, may reach Dar-es-Salaam, Tanzania, and eventually Mozambique,” he said.

The railroad linking Lobito to Luau is the longest in Angola, with a length of 1,344 kilometres and connects the port of Lobito, on the Atlantic coast, to the border town of Luau, in Moxico province.

Currently, the Lobito Corridor’s main source of income is based on the transport of mineral products from exploration in the Copperbelt region (encompassing DR Congo and Zambia) downstream (Luau/Lobito) for export to the international market.

The transport of fuels in the Lobito/Luau direction, to supply the import needs for national consumption in Zambia and DRCongo, as well as the general cargo transport service of essentially regional scope between the main commercial exchange points along the extension of the corridor, also constitute sources of income for the Benguela Railway.

Why Lobito Corridor is Important to Zambia, DRC & Angola

In September 2020, the Angolan Transport Ministry published call for tenders for the Lobito corridor titled : “Service concession contract for the operation, management and maintenance of the railway infrastructure for the general transport of ore , liquid and gas cargo” The publication attracted the attention of companies around the world, especially those in China, the United States, Germany and other countries in Europe and the rest of the world.

The big news is that Benguela railway will soon be open to the private sector. This railway will transport goods from Angola’s neighbors, such as the Democratic Republic of Congo (DRC) and Zambia, relatively easily, allowing them to export copper and cobalt ore to major global markets. via the port of Lobito.

Investors from various countries are eagerly awaiting the announcement of the Ministry of Transport of the Republic of Angola to present proposals to strengthen the axis, which connects one of the most important mining areas on the planet with the most important connection. short, safest and most economically viable to a seaport compared to other transport corridors across southern Africa.

 The Lobito Corridor is an unprecedented opportunity both in Angolan transport systems and those operating in the wider region. The Angolan government seeks to attract specialized logistics and freight operators equipped to manage, maintain and make technical improvements to infrastructure operations, as the Minister of Transport of the Republic of Angola has repeatedly stated , Ricardo Viegas D’Abreu.

The fundamental regional objective of this concession is to revitalize the exports of copper and cobalt produced in the DRC and Zambia via the port of Lobito.

According to the analysis models of the global mining market of MineSpans-IHS Markit, 80% of the minerals extracted from these two countries will be transported via the Lobito corridor by 2030. Its geographical position being its main asset, the Lobito corridor is the road the shortest between Katanga. mining region in DRC, the Copperbelt in Zambia and a deep water port.

The region’s raw materials are currently exported via the ports of Durban (South Africa) and / or Dar-Es-Salaam (Tanzania); roads up to four times longer than the road between the mining regions and the port of Lobito.

A connection will be established between a pre-existing rail link with the DRC and a branch connecting the municipality of Luacano (Moxico) and the Jimbe border post (Angola / Zambia border) as soon as possible, thus providing direct rail access to Zambia. Copperbelt, which is found in the southern sub-region of the African continent.

This transport of copper and cobalt will have a strong commercial impact. The DRC, one of the countries that will benefit from the Lobito Corridor, has the largest reserves of cobalt in the world (3.6 million metric tonnes). In fact, the country extracted 66% of the world’s supply of cobalt in 2020. Domestically, this volume represented an increase in production of around 10%, as the Congolese central bank recently reported. Copper production, an industry in which the DRC is a continental leader, also increased 12% last year.

Copper production in Zambia has also followed the trend, registering an increase of 13.6% in 2020. The Zambian Ministry of Mines forecasts predict that more than 900,000 tonnes will be mined in 2021, a figure on track to reach l long-term goal of the country. to produce more than a million tonnes per year. Zambia, also rich in cobalt, is the second largest producer of copper in Africa after the DRC.

The World Bank has summarized that the two neighboring countries of Angola and having access to the Lobito corridor contain 34% of the world reserves of cobalt and more than 10% of the world reserves of copper. This potential places Angola at the center of a technological revolution hungry for raw materials. The rapid growth of renewable energy and green technologies is focused on the two minerals, which are fundamental to the international manufacturing industries of electric vehicle batteries, mobile phones and computers, to name a few. Experts estimate that the demand for cobalt will grow by 5% per year over the next decade, although the same figure was presented for the maximum annual growth in copper demand through 2025.

In early 2021, consultants such as RMG Consulting predicted it was only a matter of time before Western and Chinese mining giants flock to reserves in the DRC and Zambia. In May, Western giant Glencore confirmed forecasts and announced the resumption of operations at Mutanda, the world’s largest cobalt mine that also produces copper. As more and more investments are made in Angola’s two neighboring countries, the Lobito Corridor will strengthen its position as a major export route for Congolese and Zambian minerals, through which machinery and others goods can also be imported to support the region’s extractive industry in addition to general-purpose goods.

● With additional reports from CongoVirtuel.

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