“By reducing freight transit time from Zambia and DRC to the sea from over a month to just one week, the Lobito Corridor is transforming how goods move across central and southern Africa”, the European Commission wrote about the corridor earlier. “It is opening markets for farmers, small businesses and industries while creating new jobs and lowering carbon emissions.”

Critical raw materials

European Commissioner for International Partnerships, Jozef Síkela, visited Zambia from 10 to 12 November to deepen the EU-Zambia partnership and promote industrial and infrastructure development along the Lobito Corridor. Síkela also discussed “cooperation on critical raw materials”, which is what much of the geopolitical rail competition in Africa is about.

Ahead of the visit, the European Commission said that the agreement would cover an investment of 116 million euros. ZNBC Today has reported that a total investment of 200 million euros was agreed upon.

China’s state-owned China Civil Engineering Construction Corporation (CCECC) has won the concession to manage TAZARA for the coming 30 years. One billion of the total investment will go to renovation works for the 1,860-kilometre railway, the remaining 400 million dollars is reserved for the purchase of 32 locomotives and 762 new wagons. In total, the project is expected to take two years.

For Beijing, the benefits are manifold: it gets to assert control over a key artery for critical raw material supply chains, commercial benefits and leverage over the hosting countries. What’s more, it counteracts Western investments in the so-called Lobito Corridor in the Democratic Republic of the Congo (DRC) and Angola, which too leads to Kapiri Mposhi.

The US has pledged at least 803 million US dollars to support that 1,700-kilometre railway, which also connects copper (and cobalt) mines to sea ports. According to the Africa Policy Research Institute, Western financing in total could be as high as 6 billion US dollars. The Lobito Corridor is also a counteracting measure: Western countries seek to undermine China’s already entrenched position in African mining.

Railways to resources

There is a new competition for influence and resources, which means that the battle for African railways is on. The late 19th and early 20th centuries echo in modern geopolitics, especially since foreign powers are after Africa’s precious minerals. China has been leading the way in recent years, with rail projects such as the Simandou railway in Guinea. That 600-kilometre railway is supposed to enable maritime exports of iron ore. Other Chinese rail projects have taken place in Nigeria, Kenya and Ethiopia.

It seems that Europe and the US will be playing a game of catch-up while China is upping the stakes. In July, China finished a part of the Algerian Western Railway, having built 135 kilometres of the line to the Gara Djebilet iron ore mine. An agreement for 6,000 kilometres of rail was signed in 2024.

Western countries are responding with not only investments in the Lobito Corridor, but also in the Ressano Garcia Line in Mozambique. A 145 million euro combined investment by France and the EU should help build double tracks and boost capacity threefold, to 44,6 million tonnes per year. Unsurprisingly, this line too connects mines (in South Africa) to a port (Maputo).

A broader effort to counter BRI

These rail investments fall into a broader strategy to counteract China and its Belt and Road Initiative (BRI) programme. For example, the US and EU have responded to China’s African advancements by establishing the Partnership for Global Infrastructure and Investment, of which the Lobito Corridor is the flagship project. African membership of the programme includes Zambia, DRC and Angola.

The EU has its Global Gateway strategy, which seeks to create “strategic, sustainable, and secure transport corridors” and “support value chains, services and jobs”. The EU’s corridor wishlist is long and includes many inland-to-coast routes.

The flipside of the coin

Africa is hoping for lucrative business opportunities, but critics have argued that the investments will lead to resource exploitation akin to that of the colonial era. There may be opportunities, but not all is rainbows and sunshine for African nations as they become a geopolitical battleground.

To illustrate, Kenya has encountered problems with the burden of the infrastructure debt it owes to China. The country failed to repay debts, incurred a penalty fine of a couple of million dollars, and ended up converting the loans from dollars into yuan on 7 October to save on interest payments. It should help save the country 215 million euros a year.

That same railway faced criticism because there was “no real plan for operating the railway” after construction. Mistakes were allegedly made in the acquisition of rolling stock and setting tariffs. The Chinese construction company rushed arrangements for operations on the line, and Kenya missed opportunities “develop national know-how and capability”.

It appeared that the U.S. was using the momentum of a receding Chinese influence to get involved in major infrastructure projects that benefit the superpower by providing access to African natural resources like cobalt, lithium and graphite. On the other hand, China did not appear to abandon its influential role; instead, it implemented a more cautious investing approach that entailed giving away some unfeasible or problematic projects to focus on others, seemingly more important.

Nevertheless, a recent Wall Street Journal report claims that the changing dynamics in Africa cannot be solely attributed to a changing Chinese approach. The report underlines that sloppy infrastructure work and subsequent neglect of infrastructure after its construction by the Chinese side have led African states to seek more ‘trustworthy’ partners, which can allegedly be found in U.S.-backed consortiums. The primary example used to prove this is the Lobito Corridor in Angola.

China recedes…

At the beginning of 2023, the Ugandan government announced the cancellation of a 2.2 billion dollar deal with the Chinese company China Harbour and Engineering Company Ltd (CHEC) to build a railway line from the Ugandan capital Kampala to Malaba, a city on the border with Kenya. The African state was already considering handing this project over to the Turkish firm Yapi Merkezi.

After all, the deal with the Turkish company was sealed, and work was expected to commence in September. Ugandan officials claimed that the project would be funded by the British export credit agency UK Export Finance and Standard Chartered Bank.

A South China Morning Post report claimed that China left the Ugandan project to focus on financing another project in Kenya, specifically the Naivasha-Malaba line, an extension of the Kampala-Malaba line in Uganda. Nevertheless, Chinese experts appeared ambiguous on whether China would finance the Kenyan project since a more cautious loaning approach that kept it away from Uganda could force it to reconsider before investing big money in a questionably feasible project.

…and not for the first time

After Uganda followed Angola and the Lobito Corridor project. The Lobito Atlantic Railway Corridor in Africa connects the Lobito port in Angola with the Democratic Republic of Congo (DRC). It is a critical railway line that provides huge transport possibilities for minerals sourced in DRC to be moved by rail to the Lobito port and then find their way around the world.

China was on top of this investment until 2022, when Angola rejected a Chinese bid to operate freight services on the Lobito line. Instead, they granted the project to Citic, a U.S.-led consortium involving European countries like Switzerland, Portugal and Belgium. The U.S. government will lend 250 million U.S. dollars via the U.S. International Development Finance Corporation (DFC) as part of this project. This will be DFC’s first rail investment in Africa, and the decision to implement it was solidified during the latest G20 summit in September 2023.

Neglect opens the way to more options

The Wall Street Journal report brings forward a different perspective regarding the changing dynamics in countries like Angola and Uganda. Based on quotes by Angolan officials, the fundamental reasons behind delegating major railway investments to countries other than China are Chinese neglect of projects and the fear of being trapped in an unviable vicious cycle of debt.

Chinese companies involved in past projects have not produced the expected results. New railway infrastructure is often defective, and maintenance works are considerably behind schedule, leading to the decay of railway tracks and the abandonment of signalling and safety systems.

Consequently, and given those circumstances, it is no surprise that another U.S.-based railway consortium, the All-American Rail Group, recently signed an MoU with the Angolan government to develop and finance a railway route parallel to the Lobito Corridor. All that occurs while China is also withdrawing from tenders to operate the Lobito port apart from the railway route leading to it.

Quick conclusions are seldom right

Does this mean that Chinese neglect should be taken for granted and that it will result in the U.S. taking the lead in African railway investments? The fact that the U.S. is gaining momentum in taking over African railway projects might indicate a temporal situation. Indeed, the Lobito Corridor project grant can be considered a victory both in terms of infrastructure development and diplomacy.

Nevertheless, like every investor, the U.S. must live up to the expectations it creates and deliver projects with regional and global added value. Carrying out investments blindly and coming up with flashy railway projects like the India-Middle East-Europe corridor without considering economic and political implications will not do the job.

After all, one should not forget two important factors: in the end, such projects mostly target natural resources, which, no matter what, China is not willing to give up. Additionally, African states have not closed the door to China. Instead, they keep it open while examining more possibilities. As the Angolan Minister of Transport Ricardo Viegas D’Abreu said to WSJ, his country is committed to maintaining a strategic relationship with China. In this sense, it could not be long before we discuss a possible Chinese rebound and takeover in the region.

Apart from connecting India to Europe via a new connectivity network, the US and the EU also pledged their support and investment capacity to Africa and, specifically, Angola, Zambia and the Democratic Republic of Kongo to develop the Lobito railway corridor. Even though the two projects are different and with an individually increased interest and potential, they also have something in common: their development is not something new, alas, something that has been in the making for more than a year and probably before the Partnership for Global Infrastructure and Investment initiative’s establishment in the June 2022 G7 meeting.

Middle East rail project acquires global reach

A few months ago, RailFreight.com reported the US intentions to discuss a major railway infrastructure project in the Middle East with regional partners. In fact, Jake Sullivan, the White House National Security advisor, met with his counterparts from Saudi Arabia and the United Arab Emirates (UAE) last May for this exact purpose. However, the meeting was also attended by representatives of the Indian government.

During the meeting, the partners discussed the possibility of a joint railway project that would cross Saudi Arabia and the UAE and link with ports in the Gulf of Oman. The route would also extend to Indian ports via sea shipping services. Back in May, such a possibility was far from being confirmed; however, information from US governmental circles spoke of a concrete plan in its early stages.

A few months later, the plan was not only confirmed, but it also elevated its significance from a project that could function as regional leverage to counter Chinese and Russian influence in the Middle East and India to a global-scale economic and transport project that could counter China’s BRI and create new corridors and gateways to connect Asia and Europe.

In this sense, such a development is not new. It was foreseen after launching the G7 Global Infrastructure and Investment initiative last year and through US foreign politics approaches in the meantime. Does this acknowledgement reduce its significance? Not at all. In contrast, it shows that talks and plans on an official and unofficial level were not just unrealistic approaches but have produced fruitful results that could reshape the whole Eurasian supply chain.

Same approach for Africa

The same applies to the investments targeting Africa. The US had declared its intent to get involved in African infrastructure affairs during the latest G7 meeting in June 2023 by investing in the Lobito Corridor, which connects the Lobito port in Angola with the Democratic Republic of Congo (DRC) and provides access to mines and natural resources.

During the G20, the US again confirmed its intent while including the EU in its plans. This means that the EU will also be at the forefront of African investments, thus also balancing China’s presence and influence and gaining access to valuable natural resources and transport networks.

What does this change?

Regarding global supply chains, the India-Middle East-Europe corridor is of unparalleled importance simply because it questions and shakes the BRI and its long monopoly in transport and infrastructure investment projects. If and when such a corridor becomes a reality it is unknown. Some Chinese experts have been framing it as a bubble that will burst without significance, even though the partners involved seem committed to commence investments as soon as possible.

No matter the timeframe, the project will change the balance of Eurasian supply chains by providing new and valuable alternatives and by also bringing Europe closer to markets and economies that seemed to be drifting away. Simply put, the Silk Road will never be the same again, but it will be way richer and enhanced.

On top of that, such a project could also provide geopolitical alternatives to countries struggling to remain in the BRI. For instance, Italy is leading the India-Middle East-Europe corridor development and this could be the country’s gateway to global supply chains and projects after leaving China’s BRI. In this sense, the geopolitical shifts caused by the corridor will also be significant and what Europe needs to do is adjust its geopolitical and geologistical strategy to them.

That is because China is now thinking twice before investing in railway infrastructure amidst concerns of implementing “debt trap diplomacy” and because it needs to be sure that the return on the investments will be profitable, which is not always the case. Consequently, it might seem that Chinese influence in Africa and relevant railway investments might be receding. However, the situation has more layers.

Cancelled Ugandan project

At the beginning of the year, the Ugandan government announced the cancellation of a 2,2 billion dollar deal with the Chinese company China Harbour and Engineering Company Ltd (CHEC) to build a railway line from the Ugandan capital Kampala to Malaba, a city on the border with Kenya. The African state was already looking for the possibility of handing this project to the Turkish firm Yapi Merkezi to take over the project.

According to a South China Morning Post report, the deal with the Turkish company is already sealed, works are expected to commence in September and quoted Ugandan officials claim that the project will be funded by the British export credit agency UK Export Finance and Standard Chartered Bank.

Could that be a loss for China? The same report underlines that the Turkish involvement in the 273-kilometres-long standard gauge Ugandan project could turn the Chinese focus towards Kenya, specifically the Naivasha-Malaba line financing. This line will be an extension of the Kampala-Mabala line constructed on the Ugandan side. Experts are ambiguous about whether China will finance this project. On the one hand, it could be geopolitically beneficial; on the other hand, China’s more cautious loaning approach could block such an investment.

US jumps in

During the latest G7 meeting, the US disclosed plans to finance the rail expansion of the Lobito Atlantic Railway Corridor in Africa, connecting the Lobito port in Angola with the Democratic Republic of Congo (DRC). The project’s financing will cost around 250 million US dollars and will be implemented by the US International Development Finance Corporation (DFC). This will be DFC’s first rail investment in Africa.

Apart from infrastructure development, this project will have two more main objectives: that is the balancing of China’s influence–that is why the PGII initiative was launched after all, and access to Africa’s natural resources, specifically minerals like cobalt, lithium and graphite, which are becoming increasingly crucial for the global economy in the context of the green transition. Where operational, the Lobito corridor already serves the transport of mining volumes.

Facts and conclusions

The main facts concerning rail infrastructure investments in Africa are four: first, China is implementing a more thoughtful cost-benefit approach when it comes to investments, while it has already been established for years as an influential power in the continent with access to infrastructure and natural resources.

Second, the US is currently trying to enter the game, reap the benefits of Africa’s mineral wealth, and gradually establish itself as a counterbalancing economic and possibly political power in the continent. Third, the Ugandan example shows that African states might be more flexible when it comes to financing rail infrastructure projects and not only rely on China. This situation might indicate that there’s indeed an opening for the US in the African market.

Fourth, Africa’s natural resources, which are crucial for the future of the planet and the green energy transition, seem to be the real prize in this case since accessing them will be essential for large economies and industrial producers like the US and China to secure the supply of their industries in the years to come and continue racing each other also in terms of production and trade output.

Consequently, a Chinese withdrawal from the region does not seem to be the case. In contrast, the US’ increasing attempts to get involved in Africa and the willingness of African states to seek alternative investors make such a case appear probable. However, China is still there, its capital flows are also there, and the involvement of more actors will probably lead to more competition with rather interesting outcomes.

Also read:

• When rail turns into leverage: U.S. ramps up international investments
• Major rail project in Middle East, US leverage against China-Russia
• BRI and Central Asia: this is what the region has to offer
• G7 and EU plan a new BRI in the making?

Unprecedented opportunity

Private entities being allowed to participate in rail freight transport in the Lobito Corridor is an unprecedented opportunity in both Angolan transport systems and those operating in the wider region. The Angolan government seeks to attract operators specialised in logistics and cargo equipped to manage, maintain and introduce technical improvements to the infrastructure’s operations, as stated repeatedly by the Republic of Angola’s Minister of Transport, Ricardo Viegas D’Abreu.

This concession has the fundamental regional objective of revitalising exports of copper and cobalt produced in the DRC and Zambia via the Port of Lobito. According to MineSpans-IHS Markit’s global mining market analysis models, 80 per cent of the minerals extracted from these two countries will be transported via the Lobito Corridor by 2030.

The connection

Its geographical positioning being its main asset, the Lobito Corridor is the shortest route between the Katanga mining region in the DRC, the Copperbelt in Zambia, and a deep-water seaport. Raw materials from the region are currently exported via the ports of Durban (South Africa) and/or Dar-Es-Salaam (Tanzania); routes up to four times longer than the route between the mining regions and the Port of Lobito.

A connection will be established between a pre-existing rail link with the DRC and a branch connecting the Municipality of Luacano (Moxico) and the Jimbe Border Post (Angola/Zambia border) at the earliest opportunity, therefore providing direct rail access to the Zambian Copperbelt, which is in the Southern Sub-Region of the African Continent.

Business impact

This transportation of copper and cobalt are expected to have a high business impact level. The DRC, one of the countries that will benefit from the Lobito Corridor, has the largest cobalt reserves in the world (3.6 million metric tonnes). In fact, the country extracted 66 per cent of the global cobalt supply in 2020. Domestically, this volume represented an increase in production of around 10 per cent, as recently reported by the Congolese central bank.

Copper production, an industry in which the DRC is a continental leader, also increased by 12 per cent last year.
Copper production in Zambia also followed the trend, registering an increase of 13.6 per cent in 2020. The Zambian Ministry of Mines’ forecast predicts that over 900,000 tonnes will be extracted in 2021, a number well on its way to reaching the country’s long-term goal of producing over 1 million tonnes per year. Zambia, which is also rich in cobalt, is the second-largest copper producer in Africa after the DRC.

Attention from around the world

Since the presidential order was issued in September 2020, the Tender for the Lobito Corridor “Service Concession Contract for the Operation, Management and Maintenance of the Railway Infrastructure for the general transport of Ore, Liquid and Gas Cargo” has already attracted attention from companies around the world, especially those from China, the United States, Germany and other countries across Europe and the rest of the world.