Securing Minerals for the Energy Transition 2025

CASE STUDY 4 Lobito Corridor Railway transportation infrastructure upgrade Landlocked countries such as Zambia have vast reserves of critical minerals, but face difficulties in transporting them due to lack of infrastructure. The Lobito Atlantic Railway is a strategic transportation route connecting the Atlantic coast of Angola to the DRC. In 2022, the Angolan government granted a concession to a European consortium of companies to upgrade and rehabilitate the existing railway and associated infrastructure in Angola. The consortium is also working on rehabilitating the state-owned railway line in the DRC that connects the Lobito Atlantic Railway to the DRC copper belt mining area. A second, separate phase of the project envisages construction of a new 800-kilometre railway line to connect the Lobito Atlantic Railway to Zambia (the Zambia- Lobito Rail Project). This greenfield project is currently being assessed by a public-private consortium comprising, inter alia, the governments of Angola, DRC, Zambia, Italy, the EU, the US, the Africa Finance Corporation and African Development Bank. These investments could play an important role in regional economic integration and development. The Lobito Atlantic Railway is controlled by a European group consisting of Trafigura, Mota-Engil and Vecturis. The DBSA has played a pivotal role in co-arranging funds for this project, by approving a $200 million funding alongside the US International Development Finance Corporation (DFC). Impact of Lobito Atlantic Railway50 The Lobito Atlantic Railway is a contemporary example of a major infrastructure initiative in SAR led by the EU and the US. DBSA played a pivotal role in arranging funds for this project, approving $200 million in funding alongside the DFC. Challenge51 Ageing and inefficient railway networks: The existing railway network in SAR required investment and upgrading. Furthermore, conflicts in the region, such as the Angolan Civil War, caused damage to the railways. High costs of transportation: Lack of investment in upgrading railway networks has led to an inefficient and fragmented transportation system, which creates higher costs of transportation. Lack of regional integration: There has been limited development of cross-border infrastructure. Regulatory frameworks around cross- border trade are also underdeveloped. Landlocked mines: Most critical mineral deposits in SAR are in landlocked countries such as Zambia. Exporting to global markets by using the Durban and Dar es Salaam ports requires taking longer routes, which can lead to delays and logistical difficulties. Solution Efficient transport corridor: Linking the Atlantic coast at the Port of Lobito in Angola to the mineral deposits of DRC provides open access to a fast, cost-effective route for transporting critical minerals to global markets, which could boost value chains and ensure mineral availability. Tapping into a wider resource pool: The savings in transportation, logistics and working capital costs for mining companies from the Lobito Atlantic Railway are expected to be significant, helping support the economic viability of Africa’s copper belt mines. Regional integration: This project is expected to help support value addition locally as well as industrial development and downstream beneficiation, which could in turn ensure regional economic integration between multiple SAR countries. Role of global partnerships: The Lobito Atlantic Railway and the Zambia-Lobito Rail Project represent two significant international public- private partnerships engaging with Africa in infrastructure in recent years. They seek to engage in a collaborative manner with equitable partnerships and promote ethical sourcing, transparency and sustainability in critical mineral value chains. Impact Transportation efficiency: By providing logistics and transportation on an open-access basis, at cost-effective rates compared to alternatives, the Lobito Atlantic Railway can help seamlessly transport critical minerals to global markets. Economic development: The Lobito Atlantic Railway helps facilitate local value addition and downstream processing, thereby supporting local industries and generating employment. Energy transition: By making critical minerals such as cobalt and copper available at faster and more cost-effective rates compared with global markets, the Lobito Corridor can help drive down the costs of renewable energy technologies, thereby helping accelerate the energy transition. Securing Minerals for the Energy Transition: Finance for Southern Africa 21