US to commit more funds to African rail link for metal exports (updated)

Mota-Engil, SGPS

08/02/2024 14:24

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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
    

  
 (Adds latest Hochstein comments in paragraphs 1, 8-9)
    By Chris Mfula
       LUSAKA, Feb 8 (Reuters) - The United States will provide
more funds for the construction of the Lobito Corridor, a rail
link to export metals from Central Africa's Copperbelt,
including a link for Zambia, U.S. energy envoy Amos Hochstein
said. 
    Washington 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 - metals vital to the energy transition away from fossil
fuels. 
    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 late
Wednesday 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 U.S. and its partners have also mobilised close to $1
billion to expand the Lobito Corridor by developing a new 800 km
(500 mile) rail line to further connect Zambia to the network,
he said during the opening of the investment forum on Thursday.
    "With the Africa Finance Corporation (AFC) as the
private-sector lead developing the project, we aim to break
ground in 2026 and have an operational rail between eastern
Angola across northwestern Zambia by 2028," he said.
    The AFC 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. 
    He also said the U.S. was contemplating other similar
projects in Africa and elsewhere. 
    "Within Africa, I expect to have at least one more in the
next year," Hochstein said, without specifying where.

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