Congo Rail Seeks to Link Copper Mines to Angola’s Lobito

Railway companies from Democratic Republic of Congo and Angola will meet to discuss linkages that would allow Congo’s mine operators to ship copper to the port of Lobito in the neighboring African country.

Societe Nationale des Chemins de Fer du Congo and Caminhos de Ferro de Benguela EP will decide on a technical and operational plan so that Congo can link to the newly rehabilitated Benguela line in Angola, said Patricia Nzondjou Nzeale, director of finance and investment at the state-owned company known as SNCC.

“To move towards the opening of the Lobito corridor, a meeting is expected in the coming weeks between SNCC and CFB in order to define in the short term the minimal conditions of starting up,” Nzondjou said at a conference yesterday in Lubumbashi, the capital of Congo’s mineral-rich Katanga province. “We’re planning a meeting between the SNCC and miners as well.”

Congo was the world’s eighth-largest producer of copper and mined the most cobalt last year. The majority of the nation’s copper is transported about 3,500 kilometers (2,175 miles) by road from Katanga to South Africa’s port city of Durban, or east to Dar es Salaam, Tanzania’s commercial capital, which is also on the Indian Ocean coast. The 1,344-kilometer Benguela line, which ends at Angola’s Atlantic coast, carried Congolese minerals until it fell into disrepair during the southwest African country’s 1975-2002 civil war.

Copper Miners

Glencore Xstrata Plc, Freeport-McMoRan Copper & Gold Inc. and Eurasian Natural Resources Corp. were Congo’s largest miners in 2012, responsible for 58 percent of copper exports, according to Mines Ministry statistics.

Copper for delivery in three months on the London Metal Exchange retreated as much as 1 percent to $7,187.50 a metric ton and traded at $7,205 at 2 p.m. in London.

The World Bank is providing about $280 million in grants to rehabilitate the railway on the Congolese side, with work continuing for the next four to five years, and SNCC has already put out tenders to purchase equipment and materials, Nzondjou said.

SNCC needs at least $204 million more to complete its plans, she said. Congo’s government withdrew $200 million in promised financing from its $6.2 billion infrastructure deal with China to focus on other priorities, she said.

“What we’re doing today is to identify within that $204 million what can be financed by private partners,” Nzondjou said. The company is looking to create a separate entity to attract private financing that won’t share SNCC’s $225 million debt burden, she said.

Cooperation Issues

Angola’s line-rehabilitation efforts are part of a continent-wide push to improve infrastructure. Kenya plans to spend $25 billion on a second port, a crude pipeline and roads, while Nigeria is spending more than $3 billion to build about 300 kilometers of rail lines in the next three years. In West Africa, an iron-ore boom is motivating miners including Rio Tinto Group to spend $25 billion on railways and ports, according to JPMorgan Chase & Co.

Zambia, Africa’s biggest copper producer, plans to invest as much as $1.5 billion over the five years through 2018 upgrading its 1,200-kilometer system that President Michael Sata in November said had “deteriorated beyond description.”

Transnet SOC Ltd., South Africa’s ports and rail utility, is spending 307 billion rand ($31 billion) on infrastructure improvements in the continent’s largest economy.

“On the Angolan side everything is in place,” Jean-Marie Dikanga, the infrastructure minister for Katanga province, told the conference. “On the Congolese side there are still some small problems.”

Line Rehabilitation

Besides rehabilitating the line between Lubumbashi and the Angolan border, the two countries still need to work out cooperation issues, Dikanga said.

Namibia will begin a $300 million expansion of its port in Walvis Bay next year in order to attract more of southern Africa’s shipping business, Johny Smith, chief executive officer of the Walvis Bay Corridor Group, said at the conference.

The company has completed a feasibility study for a rail connection to Zambia, and will encourage that nation to build an extension to Congo, he said.

“This is for economies like Katanga,” Smith said. “There must be alternatives for imports and exports.”

Before it's here, it's on the Bloomberg Terminal.