US to commit more funds to Africa's Lobito Corridor -envoy

Mota-Engil, SGPS

08/02/2024 07:53

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      Rail link to bypass logistics logjam in South Africa
    

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      Lobito corridor key to U.S.-Africa critical metals trade
    

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      Ivanhoe signs up for DRC copper exports
    

  
    By Chris Mfula
       LUSAKA, Feb 8 (Reuters) - The United States will commit
additional funds towards the construction of the Lobito
Corridor, a rail link to export metals from Central Africa's
Copperbelt, U.S. energy envoy, Amos Hochstein, said late on
Wednesday. 
    The U.S. 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  MOTA.LS  and Vecturis SA of
Belgium was awarded a 30-year concession for railway services
and support logistics on the Lobito Corridor. The consortium
plans to spend $455 million in Angola and $100 million in the
DRC on equipment, operations and infrastructure maintenance. 
    Additional funding is required to extend the 1,700 km (1,060
miles) line into Zambia in the second phase. 
    "We have committed to finance $250 million for the Angola
phase one. I expect that we will commit additional resources in
the same range for the second phase," Hochstein said in an
interview ahead of 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 that we will start seeing some significant volumes
using the rail by June-July," he said, without giving figures.
    The Africa Finance Corporation was selected as the project
manager, Hochstein said. 
    AFC already had financing commitments from the U.S., the
European Union and African Development Bank (AfDB), which would
bring in extra private sector financing, he said. 
    Hochstein welcomed the announcement on Wednesday by mining
firm Ivanhoe Mines  IVN.TO  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," Hochstein said. 
    The U.S. 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. 
    Hochstein said the U.S. 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," Hochstein said, without the specifying where.

 (Reporting by Chris Mfula; Editing by Nelson Banya and Tom
Hogue)
 ((chris.mfula@thomsonreuters.com; +260966882814))