Sierra Leone woos miners to clean energy with $11 billion plan
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Canada’s Ivanhoe Mines (TSX: IVN) (OTCQX: IVPAF) and commodities trader Trafigura inked on Wednesday deals to transport copper by rail from the Democratic Republic of Congo to neighbouring Angola’s port of Lobito.
The agreements make the companies the first long-term users of the Lobito Atlantic railway corridor, an initiative backed by the US government as part of its stated ambition to challenge China’s dominance of critical raw materials.
The Biden administration has commited $250 million to revitalize the century-old rail line linking key African mines to the Atlantic Ocean port of Lobito. It is also funding a study to connect the railway into Zambia, as part of another project expected to cost $1.6 billion.
The agreement with Ivanhoe gives it the right to transport between 120,000 and 240,000 tonnes of blister-anode or concentrate per year from Kamoa-Kakula along the Lobito Corridor.
It outlines a minimum term for the agreement of five years starting in 2025, following a ramp-up year in 2024.
Ivanhoe sent in January a trial shipment of copper concentrate from its Kamoa-Kakula copper complex in the DRC to the port of Lobito using the new railway.
The deals inked Wednesday extend the initial trial shipments, announced in August last year, with up to a further 10,000 tonnes to be transported along the Lobito Corridor this year.
“The transformative economic corridor will unlock more copper projects due to the lower logistical costs,” Ivanhoe Mines’ founder and executive co-chairman, Robert Friedland, said in a statement.
“Cheaper logistics increase the amount of economically recoverable copper across the Copperbelt, as cut-off grades can be lowered.”
The Lobito Atlantic Railway consortium, comprising Trafigura, Mota-Engil and Vecturis, was awarded in 2022 a 30-year concession for the operation, management and maintenance of both the rail line and the port.
“Trafigura has now signed a term sheet over a minimum term of six years, supporting the consortium’s aim to grow the volumes on the corridor so that it becomes the leading rail transport link in sub-Saharan Africa,” the group’s chairman and chief executive, Jeremy Weir, said.
Trafigura’s allocation of export capacity on the Lobito Atlantic Railway will be up to 450,000 tonnes per annum from 2025, it said in a separate statement.
According to the commodities trader, the Lobito Atlantic Railway concessionaires have plans to increase the export capacity of the line to one million tonnes per year by 2030.
