The CCECC is set to invest $1.4 billion to upgrade the Tanzania-Zambia Railway, enhancing its capacity for copper exports. This investment will fund rail track rehabilitation and the purchase of new locomotives and wagons. The initiative aims to address long-standing logistical issues and offers an alternative to bottlenecks in South Africa.
The China Civil Engineering Construction Corporation (CCECC) has announced an investment of $1.4 billion aimed at upgrading the Tanzania-Zambia Railway, a critical route for copper exports from Central Africa. This railway, commonly referred to as TAZARA, provides a strategic alternative to South African logistics bottlenecks that have affected copper and cobalt shipments.
Bruno Ching’andu, CEO of TAZARA Authority, noted that the decision for this concession was made after a thorough evaluation of the challenges faced by TAZARA, emphasizing the need for immediate intervention. Last year, China agreed to revitalize the 50-year-old railway as the United States was promoting an alternative transport corridor for minerals, known as the Lobito route, linking Angola to other mineral-rich countries.
Of the total investment, approximately $1 billion will be allocated for the rehabilitation of TAZARA’s rail tracks, while the remainder will finance 32 new locomotives and 762 new wagons. Ching’andu indicated that this endeavor will significantly enhance the railway’s capacity. The official statement was released during the Zambia International Mining and Energy Conference, which Ching’andu attended to engage with potential investors.
The concession spans 30 years, which includes three years dedicated to construction followed by 27 years for operation and maintenance. Ching’andu also mentioned that negotiations for the agreement are still ongoing.
The former U.S. President Joe Biden highlighted a $550 million loan for the Lobito corridor project, whereas the current President has yet to announce plans regarding it. Despite the rivalry in mineral transport corridors, the Africa Finance Corporation, backed by various investors including Trafigura, affirmed that the Lobito project will progress independently of U.S. involvement.
The CCECC’s substantial investment in TAZARA is emblematic of China’s strategic financing efforts in Africa, which reportedly reached a 20-year low in 2022 after peaking in 2016. The country previously invested over $5 billion in constructing a modern railway in Kenya and secured multiple contracts in Nigeria, although it has recently adopted a more cautious stance on large-scale lending due to past debt repayment struggles in several countries.
The investment by CCECC in the Tanzania-Zambia Railway signifies a crucial development in Central Africa’s transportation infrastructure, particularly for copper and cobalt exports. As this project unfolds, it may bolster trade relations and mitigate logistical challenges posed by alternative routes. This commitment reflects China’s ongoing strategic investment approach in Africa amidst evolving competitive corridors for mineral transportation.
Original Source: www.cnbcafrica.com
