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In light of the growing demand for copper, cobalt, lithium, all of which are necessary to power the growing tech age, and a greener earth, countries with large reserves of these minerals are prime for larger revenue generation. Fortunately, there are numerous countries in Africa which fall under this category. Four of these countries have decided to collaborate on a project (The Lobito Corridor project) that would facilitate the trade of these minerals.
The project dubbed the Lobito Corridor project is a rail infrastructure intended to ease the movement of precious minerals between Zambia, Angola, the Democratic Republic of Congo (DRC) and Tanzania.
Initially a collaboration between the United States Government, the European Union, the African Development Bank Angola, and Zambia, the 800 km greenfield rail line was intended to run from the Benguela rail line in Luacano, Angola, to the existing Zambia Railways Line in Chingola.
However, the rail will now run from the Angolan port of Lobito on Africa’s Atlantic coast to the city of Kolwezi in the Democratic Republic of the Congo and Tanzania’s Dar port.
The section of the Lobito Corridor to include Tanzania aims to allow the rail to extend to the coast of the Indian Ocean, facilitating global and intra-African trade.
This section of the project is estimated to provide a $3 billion economic benefit,1,250 jobs across construction and operations, as well as reducing emissions by approximately 300,000 tons annually.
Concerning Zambia and the Democratic Republic of the Congo this project would provide an alternative strategic route to international export markets.
This part of the corridor will provide the quickest route for exports and imports, connecting significant mining districts, agricultural clusters, and enterprises in Zambia and the DRC to the Port of Lobito.
It will also substantially ease cargo flow from the Copperbelt and Northwestern Provinces through Angola to Western markets.
US vs China for Investment in Africa
The Lobito Corridor, although still incomparable with Chinese projects in Africa, specifically the Belt and Road Initiative, may prove to be very timely.
A report by Geo Political Monitor argues that the Lobito Corridor, which was first announced in October of 2023 at the EU Global Gateway Forum, is a direct response to China’s Belt and Road Initiative (BRI).
It is also interesting to note that barely a year after the project was launched, China signed a deal with Tanzania and Zambia to rehabilitate a decades-old railway aimed at improving rail-sea transportation in resource-rich East Africa.
The rehabilitation of the Tazara railway will help landlocked Zambia, Africa’s second-largest copper producer, in exporting its metal through Tanzania.
The deal was signed by the president of the three countries during the Forum on China-Africa Cooperation.
Chinese FDI in Africa averaged over $4 billion from 2019 to 2021, whereas US FDI has declined throughout the years.
However, an economic downturn following the pandemic, along with declining financing capacity, has caused BRI-related investment in Africa to collapse, from $16.5 billion in 2021 to $7.5 billion in 2023, a 55% drop.
Furthermore, Chinese loans to African governments or state-linked borrowers plummeted throughout the pandemic, dropping to under $1 billion in 2022, according to Boston University’s Global Development Policy Center.
Chinese lenders approved $4.61 billion in loans to Africa last year, marking the first annual rise since 2016. Between 2000 and 2023, China lent a total of $182.28 billion to Africa.
However, The president of China, Xi Jinping announced in September 2024 that China will increase its support to Africa, pledging nearly $51 billion in funding, during the Forum on China-Africa Cooperation Summit in Beijing.
The Chinese president also called for the establishment of “a China-Africa network featuring land-sea links and coordinated development.” He encouraged Chinese contractors to return to the billion-person continent following the removal of COVID-19 limitations, which had previously halted several of their projects.
Recent development on the Lobito Corridor project
The most recent development on the project came in the form of technical assistance from the United States for an environmental assessment study.
The $2 million technical assistance grant was provided by the US Trade and Development Agency, during a ceremony on the sidelines of the UN General Assembly in New York City, in which the US Secretary of State Antony Blinken was present.
The concession agreement was inked between the African Finance Corporation (AFC), the lead developer, Zambia and Angola.
“The Lobito Corridor – connecting Angola, Zambia, and the Democratic Republic of Congo – is one of our biggest projects. The ultimate goal is infrastructure connecting the Atlantic to the Indian Ocean,” Mr Blinken said at the time.
“Today, Tanzania is also joining conversations about the Lobito Corridor for the first time – something we very much welcome,” the secretary of state added, noting that so far, America has committed $4 billion to the project.
