US to commit more funds to Africa's Lobito Corridor, says envoy

Source: Malay Mail

LUSAKA, Feb 8 -- The United States will commit additional funds towards the construction of the Lobito Corridor, a rail link to export metals from Central Africa's Copperbelt, US energy envoy, Amos Hochstein, said late today.

The US has been supporting the project linking mineral-rich Democratic Republic of Congo (DRC) and Zambia to Lobito port in Angola. The link seeks to bypass logistics bottlenecks in South Africa that have held up copper and cobalt exports.

In 2022, a consortium led by global commodities giant Trafigura, Portugal's Mota-Engil and Vecturis SA of Belgium was awarded a 30-year concession for railway services and support logistics on the Lobito Corridor. The consortium plans to spend US$455 million (RM2.1 billion) in Angola and US$100 million in the DRC on equipment, operations and infrastructure maintenance.

Additional funding is required to extend the 1,700km line into Zambia in the second phase.

"We have committed to finance US$250 million for the Angola phase one. I expect that we will commit additional resources in the same range for the second phase," Hochstein said in an interview ahead of an investment forum on the project in Zambia.

The first phase involved upgrading the rail line on the Angolan side, and the second phase will involve building a new multibillion-dollar rail through Zambia and beyond, he said.

"I expect that we will start seeing some significant volumes using the rail by June-July," he said, without giving figures.

The Africa Finance Corporation was selected as the project manager, Hochstein said.

AFC already had financing commitments from the US, the European Union and African Development Bank (AfDB), which would bring in extra private sector financing, he said.

Hochstein welcomed the announcement on Wednesday by mining firm Ivanhoe Mines that it had signed up to use the rail line for its copper exports from the DRC.

"That's critically important because it shows commitment by the private sector to this project. It will also make financing cheaper," Hochstein said.

The US would benefit from accelerated trade with the region, which has the necessary minerals that would be needed for energy transition away from fossil fuels, Hochstein said.

Hochstein said the US was contemplating implementing other similar projects in Africa and elsewhere in the world.

"Within Africa, I expect to have at least one more in the next year," Hochstein said, without the specifying where. -- Reuters