The Benguela railway will soon be opened up to the private sector, with the operation and maintenance of the railway infrastructure and of rail freight transport set to be granted via the Lobito Corridor.
This railway will allow for goods to be transported from Angola’s neighbours, such as the Democratic Republic of Congo (DRC) and Zambia, relatively easily, allowing them to export copper and cobalt ore to major global markets via the Port of Lobito. Investors from various countries are eagerly awaiting the announcement from the Republic of Angola’s Ministry of Transport to come forward with proposals to boost the axis, which connects one of the most important mining areas on the planet with the shortest, safest and most economically viable connection to a seaport when compared to other transport corridors through southern Africa.
Private entities being allowed to participate in rail freight transport in the Lobito Corridor is an unprecedented opportunity in both Angolan transport systems and those operating in the wider region. The Angolan government seeks to attract operators specialised in logistics and cargo equipped to manage, maintain and introduce technical improvements to the infrastructure’s operations, as stated repeatedly by the Republic of Angola’s Minister of Transport, Ricardo Viegas D’Abreu.
This concession has the fundamental regional objective of revitalising exports of copper and cobalt produced in the DRC and Zambia via the Port of Lobito. According to MineSpans-IHS Markit’s global mining market analysis models, 80% of the minerals extracted from these two countries will be transported via the Lobito Corridor by 2030. Its geographical positioning being its main asset, the Lobito Corridor is the shortest route between the Katanga mining region in the DRC, the Copperbelt in Zambia, and a deep-water seaport. Raw materials from the region are currently exported via the ports of Durban (South Africa) and/or Dar-Es-Salaam (Tanzania); routes up to four times longer than the route between the mining regions and the Port of Lobito.
A connection will be established between a pre-existing rail link with the DRC and a branch connecting the Municipality of Luacano (Moxico) and the Jimbe Border Post (Angola/Zambia border) at the earliest opportunity, therefore providing direct rail access to the Zambian Copperbelt, which is in the Southern Sub-Region of the African Continent.
This transportation of copper and cobalt will have a high business impact level. The DRC, one of the countries that will benefit from the Lobito Corridor, has the largest cobalt reserves in the world (3.6 million metric tonnes). In fact, the country extracted 66% of the global cobalt supply in 2020. Domestically, this volume represented an increase in production of around 10%, as recently reported by the Congolese central bank. Copper production, an industry in which the DRC is a continental leader, also increased by 12% last year.
Copper production in Zambia also followed the trend, registering an increase of 13.6% in 2020. The Zambian Ministry of Mines’ forecast predicts that over 900,000 tonnes will be extracted in 2021, a number well on its way to reaching the country’s long-term goal of producing over 1 million tonnes per year. Zambia, which is also rich in cobalt, is the second-largest copper producer in Africa after the DRC.
The World Bank summarised that the two countries that neighbour on Angola and have access to the Lobito Corridor contain 34% of the world’s cobalt reserves and over 10% of global copper reserves. This potential places Angola at the centre of a technological revolution hungry for raw materials. The rapid growth of renewable energies and green technologies centres on the two minerals, which are fundamental for the international electric vehicle battery, mobile phone and computer manufacturing industries, to name but a few. Experts estimate that demand for cobalt will grow by 5% per year over the next decade, though the same figure was presented for maximum annual growth for copper demand until 2025.
In early 2021, consultants such as RMG Consulting predicted that it was only a matter of time before Western and Chinese mining giants flocked to the DRC and Zambia reserves. Last May, western giant Glencore confirmed the forecasts and announced that they would be resuming operations in Mutanda, the world’s biggest cobalt mine that also produces copper. As more and more investments are made into Angola’s two neighbouring countries, the Lobito Corridor will further secure its position as a major export route for Congolese and Zambian ores, through which machinery and other goods can also be imported to support the region’s extractive industry in addition to general need goods; all thanks to the extent to which the Lobito Corridor facilitates these two landlocked countries’ ability to trade internationally.
Since the presidential order was issued in September 2020, the Tender for the Lobito Corridor “Service Concession Contract for the Operation, Management and Maintenance of the Railway Infrastructure for the general transport of Ore, Liquid and Gas Cargo” has already attracted attention from companies around the world, especially those from China, the United States, Germany and other countries across Europe and the rest of the world.