Congo Starts $600 Million Rehabilitation of Railroad Network

Democratic Republic of Congo started a five-year, $600 million renovation of rail lines in the south- east of the country to boost trade, lower prices and develop its mining industry, Mines Minister Martin Kabwelulu said.

The project is being funded by the World Bank and the government, with $200 million coming from a minerals-for- infrastructure accord signed with China in 2009.

The rehabilitation of 700 kilometers (435 miles) of track in the mineral-rich region will help boost the agricultural and mining industries, encourage the development of isolated communities and help fight poverty, Kabwelulu said in Kinshasa, the capital. Kabwelulu is also serving as interim transport minister.

Congo has about 4 percent of the world’s copper and a third of its cobalt. The Central African nation, which is approximately the size of Western Europe, will produce as much as 1.9 million metric tons of copper in 2015, up from 300,000 tons in 2009, according to Mines Ministry projections. Most of the country’s mineral products are currently exported via road.

The rehabilitation project comes as commodity prices hit record highs, spurring governments and companies to pledge more than $35 billion of investment in African railways during the next five years.

In Congo, China will provide rolling stock and track for the country’s state-owned rail company, SNCC, which is managed by Belgium’s Vecturis SA.

‘Value for Money’

The joint financing “will improve the efficiency of both our investment and their investment and it will ensure Congo gets the best value for its money,” the World Bank’s Africa Transport Program Coordinator Pierre Pozzo di Borgo said today in Kinshasa.

SNCC posted a $50 million loss last year, according to Pozzo di Borgo. More than 4,000 employees will take retirement as part of the restructuring, he said. The company expects to break even again in 2013, said SNCC’s deputy director, Norbert Lubanda Luesu.

Congo has also approached 22 mining companies about partnering with SNCC to refurbish rail lines elsewhere in the country or build new ones to facilitate mineral exports, Kabwelulu said. The World Bank may provide risk insurance for any private investments, Pozzo di Borgo said.

Three-Week Route

Freeport McMoRan Copper & Gold Inc., whose $2 billion Tenke Fungurume project is the largest investment in Congo, has already expressed interest in rehabilitating rail lines to export its minerals. The Phoenix, Arizona-based miner currently transports most of its minerals more than 3,500 kilometers (2,175 miles) by road to Durban, South Africa, which can take as many as three weeks.

Angola’s port of Lobito could be one future destination for Congolese copper as soon as China’s state-owned Sinohydro Corp. finishes restoring the 1,344-kilometer Benguela line that once linked Congo’s Katanga province to the Atlantic coast.

To contact the reporter on this story: Michael J. Kavanagh in Kinshasa at mkavanagh9@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.

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