First vessel docks at Trafigura-backed mineral terminal in Angola

Photo source: Trafigura

A mineral terminal at the Port of Lobito in Angola, operated by a consortium that includes Singapore-headquartered Swiss commodity trader Trafigura, has received its first vessel. This port serves as a maritime link for the railway connecting to the Democratic Republic of Congo’s (DRC) copper and cobalt mining region. The cargo vessel was loaded with 40,500 tonnes of sulphur, destined to support copper production by mining companies in the DRC’s southern Katanga area.

The Lobito Atlantic Railway (LAR) consortium, which includes Trafigura, Portuguese construction firm Mota-Engil, and Belgian rail operator Vecturis, was awarded a 30-year concession in 2022 to operate, manage, and maintain both the railway and the mineral terminal. The railway stretches about 1,300km from the coast to Luau in eastern Angola, near the DRC border. From Luau, a rail line extends 400km into the DRC to Kolwezi, connecting with the country’s national rail network. A separate US and EU-supported pre-feasibility study is underway to expand the Lobito Corridor railway to the mines of northern Zambia.

The start of LAR's port operations follows rehabilitation efforts that began in January with the railway's opening. The railway refurbishment project involves an investment of more than US$800m over the concession’s lifetime. This includes renovating sections of the rail line and associated infrastructure, in addition to investments in wagons and locomotives. Currently, two freight trains travel weekly from the DRC to the Port of Lobito. Plans are in place to increase this to six international trains daily after further investments. The railway is expected to reach an annual export capacity of 1m tonnes by the end of the decade.

For the DRC’s mining industry, the railway offers the quickest and most direct route to port. Currently, copper and cobalt are transported via longer routes through Dar es Salaam in Tanzania, Beira in Mozambique, or Durban in South Africa, journeys that can take weeks. The distance from Kolwezi to Lobito is roughly half that to Durban. Increased export volumes have led to road congestion and border delays, which this new route aims to alleviate, providing significant cost and time savings for Copperbelt miners.

In related news, Trafigura is reportedly among the bidders for the DRC state-owned miner Gecamines' share of cobalt from the vast Tenke Fungurume mine, situated approximately 180km northwest of the city of Lubumbashi. Last year, Tenke Fungurume exported 361,000 tonnes of copper and 23,000 tonnes of cobalt, making it one of the largest mines in the country. The mine is majority-owned by China’s CMOC Group, with Gecamines holding a 20% stake. This is the first time Gecamines is independently marketing its cobalt as the DRC aims to exert more control over its green energy metals.

Cobalt, typically extracted as a byproduct of copper mining in the DRC, has seen its prices fall by more than two-thirds since early 2022 due to a supply glut. Some manufacturers have replaced cobalt with cheaper alternatives in their batteries, while others have moved away from the metal to avoid human rights issues and environmental problems linked to cobalt mining in the DRC. The country, responsible for approximately 75% of global cobalt output last year, is considering measures to support the metal’s price, including potential export quotas.

 

References

‘Angolan Government’s Ministry of Transport awards concession tender for the Lobito Corridor railway’, Trafigura, 20 July 2022

‘Concession agreement signed with the Angolan government for rail services and logistics support for the Lobito corridor’, Trafigura, 09 November 2022

‘Concession for railway services transferred to Lobito Atlantic Railway in Angola’, Trafigura, 04 July 2023

‘Oversupply, low prices for cobalt to persist in 2024 as demand slips’, S&P Global, 27 December 2023

‘Trafigura and Kamoa-Kakula sign agreements to become first customers of the Lobito Atlantic Railway’, Trafigura, 07 February 2024

‘Tenke Fungurume Mine’, Wikipedia, 07 March 2024

‘Address by the chairman of the board of directors at the Cobalt Congress’, Gécamines SA, 17 May 2024

‘Congo offers own cobalt from joint ventures for first time’, Bloomberg, 12 July 2024

‘Lobito Atlantic Railway receives its first vessel at the Port of Lobito mineral terminal’, Trafigura, 15 July 2024