DRC: Lobito train corridor will revolutionise mining transport

Erected in the early 20th century and ravaged during Angola’s civil war, the line underwent partial rehabilitation in the mid-2010s. Although its location is strategic for the cross-border mining trade, it has been underutilised.

DRC President Félix Tshisekedi, Angolan President João Lourenço and Zambian President Hakainde Hichilema attended the Lobito corridor ceremony on 4 July, marking the official transfer of operational concession for the railway line and mineral terminal on the Atlantic coast to Lobito Atlantic Railway (LAR).

LAR, a consortium comprising trader Trafigura (49.5%), construction company Mota-Engil (49.5%), and railway operator Vecturis (1%) aims to handle 1m tonnes of imports and exports annually after five years of operation. The venture is slated to start in 2024.

The US has pledged to finance $250m through the US International Development Finance Corporation, forming part of the total funding. Ivanhoe Mines, the operator of the vast Kamoa-Kakula copper deposit in the DRC, is closely monitoring the railway, which lies around 5km from its mine.

Transport time cut by 75%

In a region beset by commodity-price volatility, the Lobito corridor emerges as a coveted passage, offering the shortest route to transport minerals, such as copper, cobalt, manganese, zinc and lithium, from southeastern DRC to the coast. Traditional routes to South Africa, Tanzania, Namibia or Mozambique are longer.

Renewed investment and demand for minerals from the DRC and Zambia

The corridor is suited for importing mining inputs, agricultural products and consumer goods. Reducing the average travel time from 30 days to eight days, the railway bypasses congested roads, border posts and ports encountered along other corridors.

Rail transport provides a significantly lower carbon footprint than road transport, a critical consideration for energy transition. Proposals to extend the line, presently connecting Lobito to Kolwezi, envision reaching DRC’s Lubumbashi and on to Zambia, expanding access to additional mining sites.

“The project’s prospects are bolstered by various factors,” says Koen Rombouts, CEO of the Southern Africa cluster at Africa Global Logistics (AGL). “There’s renewed investment and demand for minerals from the DRC and Zambia, coupled with a revitalised momentum in Africa’s rail sector.”

Development opportunity

The Lobito corridor’s allure lies in the opportunities it presents for development, rather than causing trepidation among mineral transport stakeholders in the region.

“Whenever a new corridor opens, we witness increased trade flows … There is enough volume for all,” says Rombouts.

One road hauler tells The Africa Report that he is in discussions with LAR to buy into accessing the corridor. “There are a lot of new mining projects in the region, so more capacity is needed,” he says.

Various players – including mining companies, traders, chemical importers and transporters – will have access to the line, subject to commercial agreements and compliance checks. While shareholder and trader Trafigura will likely be among the route’s users, discussions are underway with other interested parties.

Maritime traffic to and from Lobito, the management of facilities and services in the areas served by the line, and other aspects of the project are also of interest.

“We have a terminal in Chingola, Zambia, strategically placed at the crossroads of the planned rail link in that country and the road to Dar es Salaam, as well as land in Kolwezi,” says Rombouts.

Uncertainties

Despite these prospects, the corridor’s full implementation faces hurdles. The rail section in the DRC will necessitate extensive works and a final investment decision on the extension to Zambia remains pending.

Moreover, the mineral port of Lobito, currently inactive, must demonstrate its ability to handle volumes swiftly and efficiently.

Some industry players have expressed reservations. One mining operator has voiced concerns about the cost of lorry transport to reach the railway. A lorry driver says he fears administrative delays and a trader remains unconvinced about purchasing capacity from a consortium comprising a competitor like Trafigura.

The projected upswing in mining production, driven by the corridor’s operations, is expected to offset concerns regarding revenue loss for toll, parking and border post authorities and companies.