Angola’s Lobito Atlantic Railway signs on first commercial commitment in six-year deal

Angola’s Lobito Atlantic Railway signs on first commercial commitment in six-year deal

The Lobito Atlantic Railway, a new import-export trade route between the African Copperbelt and Angola’s Atlantic coast, signed a long-term agreement with Trafigura and Kamoa-Kakula this week to transport minerals via the Lobito Atlantic Railway for a minimum term of six years.

The terms of the reserved capacity agreements were signed during the Investing in African Mining Indaba in Cape Town, South Africa and mark the first long-term commercial commitments to the Lobito Atlantic Railway,

The Lobito Atlantic Railway is expected to ramp up to an annual export capacity of one million tonnes per annum before the end of the decade. Trafigura’s allocation of export capacity on the Lobito Atlantic Railway will be up to 450,000 tonnes per annum from 2025. In addition, the Kamoa-Kakula copper complex, a joint venture between Ivanhoe Mines and Zijin Mining, has been allocated a minimum capacity of 120,000 tonnes and up to 240,000 tonnes per annum of copper products — blister-anode or concentrate — from 2025, with an initial commitment of 10,000 tonnes to be transported in 2024 as the railway ramps up.

In 2022, the Lobito Atlantic Railway consortium, comprising Trafigura, Mota-Engil and Vecturis, was awarded a 30-year concession for the operation, management and maintenance of the Lobito Atlantic Railway (LAR) and for the Lobito Minerals port. The upgraded line will provide a more efficient and lower-carbon route to market for copper, cobalt and other metals crucial to the energy transition and will operate on the basis of open commercial access.

Jeremy Weir, executive chairman and CEO of Trafigura says the commitments support the consortium’s aim to grow the volumes on the corridor so that it becomes the leading rail transport link in sub-Saharan Africa. Earlier this week, Francisco Franca, chief executive of Lobito Atlantic Railway told delegates at the conference that the vision is to create 2,000 jobs and the concession’s goal is to reach five million tonnes a year in the next 10 years.

“The transformative economic corridor will unlock more copper projects due to the lower logistical costs. Cheaper logistics increase the amount of economically recoverable copper across the Copperbelt, as cut-off grades can be lowered. This makes a significant impact on discoveries made in the DRC, such as the recent high-grade and open-ended Kitoko copper discovery in the Western Foreland, where we are stepping up exploration activities this year to find more ultra-green copper metal. Kitoko is located only 30 kilometres from the existing rail line,” says  Ivanhoe Mines’ founder and executive co-chairman, Robert Friedland.

The project to refurbish the Lobito Atlantic Corridor benefits from the support of the governments of Angola, DRC, Zambia and the US government’s Partnership for Global Infrastructure Investment (PGII). The project represents an investment of more than $500-million over the lifetime of the concession, with a potential financing of at least $250-million from the US International Development Finance Corporation. The investment will enable the renovation of sections of the railway line and associated infrastructure, in addition to securing more than 1,500 wagons and 35 locomotives. DM