Southern Africa’s Railways Surge with Global Investment Amid Copper Boom
Southern Africa’s railways are garnering international attention and attracting billions of dollars in investment, driven by the race to secure copper supplies essential for the energy transition.
From Angola on the west coast to Tanzania on the east, governments and investors are poised to revive long-neglected rail lines and construct new ones.
This surge in demand is largely fueled by the central African copperbelt shared by Zambia and the Democratic Republic of Congo.
“We’re at a historic turning point,” said Babe Botana, Executive Director of the Southern African Railways Association. “The global interest in revitalizing the railway industry is unprecedented.”
Truck congestion has plagued routes out of Congo, which last year surpassed Peru as the world’s second-largest source of copper for electric vehicles and data centers.
Zambia, eager to match its northern neighbor, is also ramping up its efforts. Global powers, including the US, EU, and China, recognize the strategic importance of rail in facilitating exports.
The heightened interest was evident at the Southern African Railways Association’s annual conference in Johannesburg, which saw a 50% increase in attendance from last year, with many new international delegates.
Recently, a rail route from Congo to an Angolan port backed by $553 million in US development finance loaded its first copper shipment destined for Baltimore. Amos Hochstein, senior adviser to President Joe Biden, hailed the event as a significant milestone.
Zambia plans to finalize a $1 billion deal with China next month to refurbish a rail line connecting its copper mines to Tanzania’s port of Dar es Salaam.
In South Africa, state-owned Transnet SOC Ltd. secured a $1 billion loan from the African Development Bank last month to advance its rail recovery plans.
Years of neglect and insufficient funding have left many southern African rail lines underperforming despite rising demand for trade routes critical for electric vehicle production.
This has resulted in a $10 billion backlog for maintenance and track refurbishment regionally, according to Johny Smith, head of rail at South Africa-based Grindrod Ltd., who notes that only about 7% of cargo is transported by rail in the region.
Securing investment for rail revitalization has been challenging, with many projects stagnating for decades. Xoliswa Njokweni-Mlotywa, acting CEO of Thelo Infrastructure Development, emphasizes the need for development financiers to prepare projects to attract investment and consolidate various funding sources to reduce risk and ensure viability.
“The private sector will not invest without a clear return,” Njokweni-Mlotywa stated.
SOURCE:https://freighttrendsglobal.com
