Jacques du Preez’s Post

Rivalry between the world’s two most powerful nations is driving a rush to build strategic export-focused #railway #infrastructure in #Africa on a scale not seen since the height of the Cold War. Washington’s $500m commitment to the minerals export-focused #LobitoCorridor has been countered by a $1bn Chinese proposal to rehabilitate the creaking Tazara line. The two megaprojects will have terminals close together in the #Copperbelt, but geopolitical considerations are likely to prevent any interconnection, writes Marc Howard. #US #China #criticalminerals #transitionminerals #energy #investment #geopolitics #finance

Africa is letting its critical and strategic minerals escape without being able to add value to them. China, through the Belt and Road Initiative, has built the critical infrastructure ( ports and railways) necessary for the transportation of many of them. Its projects on the east coast reach Tanzania, Kenya, Uganda, Rwanda, Burundi, Ethiopia, Djibouti, South Sudan...China seems to be the natural alternative to the IMF or the WB for many countries. But given the growing relevance of critical minerals, Washington rolls up its sleeves and announces the agreement to develop one of the largest railway projects on the west African coast. Can the Chinese projects of the Belt and Road Initiative, the American Build Back Better or the European Global Gateway coexist in Africa? Will African countries be abale to ensure that part of the value added to minerals and the jobs to transform them are retained in their soil? https://lnkd.in/d3X925Tq

THE LOBITO CORRIDOR: WASHINGTON’S ANSWER TO BELT AND ROAD IN AFRICA Launched a decade ago, China’s Road and Belt Initiative is a colossal infrastructure and economic development project spanning across Asia, Europe, and Africa. To date, 52 African governments signed Memorandums of Understanding (MoU) with China regarding the BRI and the initiative has translated into billions of dollars invested in the construction of roads, ports, railways, and other critical infrastructure. These projects are not only enhancing connectivity within the continent but also providing China with unprecedented access to Africa’s vast mineral wealth, particularly in countries like Zambia and the Democratic Republic of Congo (more than 80% of copper mines in the DRC for instance are already Chinese-owned), which boast abundant reserves of copper and other essential minerals... Readmore on the link below https://lnkd.in/dz3d4Hx8

The $2.3 billion Lobito corridor project is the most ambitious attempt yet from the US into developing African infrastructure. It includes the EU too. The prize? The vast copper and cobalt deposits in Zambia and Democratic Republic of Congo that are crucial for the world's transition away from burning fossil fuels. We travelled to a Bill Gates-backed, AI-fuelled copper project in Zambia, and across the railway that links Congo to Angola's Lobito port, interviewing more than two dozen people for this story. There is a massive amount of interest in the central African copper belt. Trafigura says Congo's metals and minerals exports will grow by 1.2 million tons by the end of next year to nearly 5 million tons. That's a 32% surge compared to 2023's volumes, underscoring the need for a new route to market. Zambia has grand plans, too. China just proposed a more-than $1 billion plan to revitalise the competing Tazara railway that runs from the copper belt in the opposite direction. Will there be enough demand for both projects? https://lnkd.in/dFQSSkcQ EDIT: I forgot to include the most important part! This was a real combined effort with Willam Clowes, Taonga Mitimingi, Candido Mendes, Michael J. Kavanagh, and Henrique Almeida. Visuals by the incredible Zinyange Auntony.

I give some brief thoughts in this article on what happens to the upgraded Lobito Railway if copper output doesn't rise as expected. Will there be enough demand? This is the problem that hampered the previous Lobito railway built in the 1900s: it was surplus to requirements and couldn't compete with other export routes.

As geopolitical tensions electrify the global scramble for critical minerals—the raw materials that underpin advanced defense systems and clean energy technologies—the United States and China have been racing to expand their influence over the mineral market in Africa.  Worried about strategic vulnerabilities, Washington is now ramping up efforts to carve out a stake in the critical minerals sector. In one of the most ambitious U.S. infrastructure bids in Africa yet, the Biden administration has pledged to lend hundreds of millions of dollars toward reviving the Lobito Corridor, a 1,200 mile-long railway that would transport critical minerals from the Democratic Republic of the Congo and Zambia to the Angolan coast. The DRC is home to the world’s biggest cobalt reserves, while Zambia is rich in copper. https://lnkd.in/eCtfh2ES

Revival of the Critical Minerals Mega-Railway in Africa   Introduction The United States, in collaboration with the European Union, is undertaking a significant initiative to revive a mega-railway project through Africa. This project, known as the Lobito Corridor, is a strategic move to secure a stable supply of critical minerals essential for the green energy revolution².   Background The Lobito Corridor is a 1,200-mile-long railway that aims to connect the mineral-rich regions of the Democratic Republic of the Congo and Zambia to the Angolan coast⁵. The railway's expansion is expected to increase freight traffic sixfold by 2035, providing a more efficient route for Congolese copper and cobalt, crucial for modern technologies².   Investment and Collaboration The US International Development Finance Corporation has pledged $250 million in financing, marking its first rail investment in Africa². This is part of the Partnership on Global Infrastructure and Investment (PGI), a $600 billion initiative launched at the G7 meeting as a counter to China's Belt and Road Initiative².   Market Implications The revival of the Lobito Corridor is poised to have profound implications on the market: - Increased Accessibility: The railway will significantly reduce transit times for transporting minerals, enhancing market accessibility. - Strengthened Supply Chains: It will strengthen the supply chain for critical minerals, reducing dependency on a single source and mitigating risks associated with geopolitical tensions. - Boost in Investment: The project signals a boost in Western investment in African infrastructure, potentially leading to more economic opportunities and job creation. - Competition with China: By offering better terms and interest rates, the West is positioning itself as a more attractive partner for African nations, directly competing with Chinese investments.   Conclusion The US and EU's joint efforts to revive the Lobito Corridor reflect a strategic shift towards securing critical mineral resources and enhancing their influence in Africa. The project's success could reshape the global supply chain for critical minerals and bolster the West's position in the green energy sector².   References (1) US and EU join forces on rail corridor in play for African minerals. https://lnkd.in/gAgPPF3b. (2) app.meltwater.com. https://lnkd.in/gz8p39yD. (3) Washington Wants to Revive a Critical Minerals Mega-Railway Through Africa. https://lnkd.in/ghj2w_Wk.

LOBITO CORRIDOR: US&EU may be increasing the race for minerals in Africa, eyeing a project to jointly build a railroad to get copper and critical minerals efficiently transported to the coast for loading onto ships. Better late than never, as China and Russia has been there awhile already, aiming for the same

As geopolitical tensions electrify the global scramble for critical minerals—the raw materials that underpin advanced defense systems and clean energy technologies—the race to expand influence over the mineral market in Africa intensifies.

In an attempt to counter China's influence in Africa, the US is injecting millions into the Lobito Corridor project. Indeed, sourcing the metals to fuel the energy transition remains a headache for Western countries. The commodity trade consortium Trafigura asserts that the Lobito Atlantic Railway will “provide a quicker western route to market for metal and minerals produced in the Democratic Republic of Congo.” The project entails the construction of approximately 550 km of rail line in Zambia, from the Jimbe border to Chingola in the Zambian copper belt, along with 260 km of feeder roads within the corridor. Moving those valuable resources from the Central African copper belt to Western markets is key for the US and Europe, particularly as the energy transition unfolds. https://lnkd.in/gE8gvyC5 #lobitocorridor #washington #answer #beltandroad #africa #politics #geopolitics #minerals #sourcing #energytransition