Revitalizing Africa: Ivanhoe, Trafigura Pioneer New Rail System Revitalizing Africa: Ivanhoe, Trafigura Pioneer New Rail System

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Biden Administration Backs African Rail Revival

Investing in the future always means safeguarding the past. In a bold move to rejuvenate a century-old rail line that connects vital African mines to the Lobito port, the Biden administration is committing $250 million to breathe new life into this historical artery, bolstering the continent’s economic potential.

Expanding Rail Connections: A Strategic Move

Anticipating a momentous expansion of the railway network, the administration is also funding a project to link the railway into Zambia. This endeavor, which estimates suggest will cost $1.6 billion, demonstrates a forward-looking approach to infrastructure development and regional connectivity.

Agreements Propelling Economic Growth

In a groundbreaking agreement, Ivanhoe secures the rights to transport a significant volume of blister-anode or concentrate annually from Kamoa-Kakula along the Lobito Corridor. With a minimum term of five years starting in 2025, followed by a ramp-up year in 2024, this landmark deal sets the stage for a transformational era of economic prosperity.

Ivanhoe, Trafigura to be first users of African rail through Angola
Current export routes used by Kamoa-Kakula in red and the Lobito Railway Corridor route in orange. (Image courtesy of Ivanhoe Mines.)

Trailblazing Partnerships

Marking a historic milestone, Ivanhoe’s January trial shipment of copper concentrate from the Kamoa-Kakula copper complex to the Lobito port via the new railway heralds a new era of seamless transportation. This success paves the way for further collaboration, building beyond the initial trial shipments announced last August.

The Economic Ripple Effect

Emphasizing the profound impact of the new economic corridor, Robert Friedland, the founder and executive co-chairman of Ivanhoe Mines, underscores the significant reduction in logistical costs for copper projects. He notes that this transformation will unlock more economically recoverable copper across the Copperbelt, marking a new chapter in the region’s economic landscape.

Redefining the African Transport Landscape

The Lobito Atlantic Railway consortium, led by Trafigura, Mota-Engil, and Vecturis, assumes a pivotal role in overseeing the operation, management, and maintenance of the rail line and the port. This undertaking, awarded a 30-year concession in 2022, charts a bold path for redefining the transport dynamics in sub-Saharan Africa.

Shaping the Future of Trade and Commerce

Underscoring the consortium’s commitment to transforming the rail transport link in sub-Saharan Africa, Jeremy Weir, the executive chairman and chief executive of Trafigura, highlights the signing of a term sheet marking a strategic alliance over a minimum term of six years. This strategic move is geared towards fortifying the corridor’s position as a key driver of trade and commerce in the region.

Unleashing Growth Potential

Trafigura’s allocation of export capacity on the Lobito Atlantic Railway stands at a remarkable 450,000 tonnes per annum from 2025, underscoring the remarkable potential for growth unleashed by this initiative. Looking further ahead, the consortium plans to amplify the export capacity to a staggering one million tonnes per year by 2030, setting the stage for unparalleled economic expansion.

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