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Last updateMer, 28 Jan 2015 10am

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Railway: SA firm to build new railway in Zambia

The Johannesburg Stock Exchange-listed logistics and shipping company Grindrod has signed an agreement with Zambia’s Northwest Rail (NWR) Company Limited to build and operate a new 590-km cape gauge railway from Zambia’s northern Copperbelt mining town of Chingola to the Angolan border.

The agreement, signed Tuesday, will enable the parties to conclude the bankable feasibility study which is currently underway, while construction is expected to commence during 2014.

A joint statement released by the two companies disclosed that the railway is to be built in two phases, with phase I extending from Chingola to the Kansanshi, Lumwana and Kalumbila mines in Zambia (290 km of track), and Phase II connecting with the Benguela line on the Zambian-Angola border near Jimbe.

Phase I is intended to service existing ore and finished copper traffic while Phase II is intended to open up a direct corridor to Lobito, which would allow landlocked Zambia to import oil directly from Angola, and to stimulate further mining activity in the Western Copperbelt region.

The estimated capital cost of Phase 1 is US$489 million while Phase 2 will cost US$500 million, the statement said. 

“I have been developing this project for a number of years and the synergies with Grindrod’s Rail businesses makes Grindrod an ideal partner in the joint venture and means we will be able to bring this project to being in the shortest possible time,” Enoch Kavindele, a former Vice-President of Zambia and founder/owner of NWR, said.

“This investment will enable Grindrod to extract synergies from our existing investments in the North-South rail corridor and our port operations in Maputo, Richards Bay and Durban. We also see great potential in creating an Atlantic gateway to Central Africa through Lobito and look forward to playing our part in making this a reality with the development of Phase II,” said Dave Rennie, Chief Executive Officer of Grindrod Freight Services –Ports & Rail.

The Copperbelt straddles the border of Northern Zambia and the Southern DR Congo and is reportedly among the richest under developed geological regions in Africa.

Current production of copper in this area accounts for around 8 percent of the world’s production.

Pana 05/02/2014