Singapore-based Trafigura in consortium to manage Angolan railway

Angola has awarded a 30-year railway concession to a three-party international consortium that includes Singapore-based commodity major Trafigura. It will be responsible for the operation and maintenance of a 1,344km rail-link that connects the Angolan port of Lobito with mines in the Democratic Republic of Congo (DRC). The route, which is commonly referred to as the ‘Lobito Corridor’ is considered a shorter route for the export of metals mined in the to the ocean for the DRC. According to a statement released by Trafigura, the Lobito Corridor could become the ‘third most important trade route in the Southern African Development Community region by 2050’. Currently, much of the copper and cobalt mined in the DRC reaches the international market from the ports of Dar es Salaam in Tanzania, Beira in Mozambique or Durban in South Africa.

The consortium’s bid reportedly beat an offer from China’s CITIC and the China Railway 20 Bureau Group. It includes Portuguese-headquartered construction and infrastructure management company Mota-Engil; and Belgian rail operator Vecturis. Trafigura and Mota-Engil each own 49.5% of the venture, with the remaining 1% shareholding held by Vecturis. There is potential for the concession to be extended by a further 20 years. 

The DRC is Africa’s top copper producer, delivering around 1.9 million metric tonnes of the metal in 2021. In addition, the DRC is estimated to be home to about 50% of the world’s known cobalt reserves, which is used in lithium-ion batteries to power everything from mobile phones to electric cars. Copper plays an important role in capturing, storing and transporting energy from sustainable sources such as wind, solar and geothermal. The southern DRC mining provinces of Tanganyika, Haut-Lomami, Lualaba and Haut-Katanga are rich in copper and cobalt.

As part of the agreement, the partners will invest capital in rolling stock as well as improvements to the current rail infrastructure. Angola’s Ministry of Transport has announced that about US$256m and US$73m  will be invested in infrastructure and rolling stock respectively, while just more than $4m will go towards other activities.

 

References

‘Multinational - Lobito Corridor Trade Facilitation Project’, African Development Bank Group, 24 September 2019

‘Green metals: Copper is the new oil’, Goldman Sachs, 13 April 2021

‘Profiling the six largest cobalt reserves in the world by country’, NS Energy, 07 June 2021

‘Copper production in Africa in 2021, by country’, Statista, June 2022.

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

‘Lobito Corridor managed by consortium’, Ministry of Transport Angola, 20 July 2022

‘Angola to build railway to DR Congo to speed mineral exports’, Global Construction Review, 22 July 202