LONDON — Angola’s ministry of transport has awarded a tender to a Trafigura consortium to operate and expand rail infrastructure to speed up commodity imports from Democratic Republic of Congo.
Congo, Africa’s biggest copper producer, exports copper, cobalt and other metals in trucks via Tanzania or South Africa, which takes several weeks because of congestion and customs delays.
As part of a 30-year concession agreement, the consortium has agreed to invest $256 million in infrastructure, $73 million in rolling stock and $4.3 million on other activities, Angola’s transport ministry said, to improve the Lobito corridor.
Begun by Angola’s former colonial ruler Portugal in 1899, the corridor links Angola’s seaport of Lobito with Luau in eastern Angola, near the border with Congo.
The Angolan transport ministry said in its statement the improved rail corridor could contribute between $1.6 and $3.4 billion to Angola’s GDP, and generate revenues for the government of around $2.03 billion in total over 30 years.
It said it would also increase competition in the logistics space by offering a viable alternative to road transportation, and could lead to lower freight transport tariffs.
Trafigura said the renewed corridor would use existing rail infrastructure, remove trucks from the roads and offer “considerable cost and time savings for miners in the Copperbelt to export to international markets.”
The improved rail link is expected to carry, annually, 1.7 million tonnes of cargo by its fifth year of operation, 3 million tonnes by the 10th year and 5 million tonnes by the 20th year, Trafigura said. It expects the 30-year concession agreement to be signed in the coming weeks.
The concession can be extended by 20 years if the consortium decides to build a rail link between Luacano in Angola and the Zambian border town of Jimbe.
Geneva-based commodities trader Trafigura and global construction firm Mota-Engil Engenharia e Construcao Africa each hold a 49.5% stake in the consortium, with rail operator Vecturis holding the remaining 1%.
(Reporting by Julia Payne and Helen Reid; Editing by Angus MacSwan and Barbara Lewis)