Challenge
The advanced technologies required for the industries of the future depend on reliable access to copper and cobalt. These minerals are essential for batteries, wind farms, electric vehicles, solar power plants, as well as energy transmission and distribution.
But many of the world’s most mineral-rich countries such as the Democratic Republic of the Congo (DRC) lack the infrastructure to transport growing volumes of these materials to major coastal ports where they can be exported to markets around the world. DRC is the second-largest global producer of copper, and the largest producer of cobalt with a 70 percent global market share.
A railway built more than 100 years ago connecting mining sites in the DRC to the Lobito port in Angola was largely destroyed during the Angolan civil war. A reconstructed railway suffered from poor construction and upkeep. As a result, these critical minerals are currently transported by heavy-duty trucks to ports in South Africa and Tanzania over roads that can take months to travel.
Growing demand for critical minerals threatens to exacerbate the problem. Analysts predict cobalt demand will exceed the pace of production before the end of 2024.
Solution and Impact
DFC is providing a $553 million loan to the Lobito Atlantic Railway to finance the upgrade and rehabilitation of more than 800 miles (1,300 km) of rail connecting the city of Luau in the Democratic Republic of the Congo to the port city of Lobito in Angola, as well as the upgrade and rehabilitation of the mineral port in Lobito.
The investment is intended to improve the resilience of global supply chains for renewable energy materials by upgrading and rehabilitating the railway in Angola that increases the efficiency and reliability of transportation out of the DRC’s mines.
DFC’s investment will help reinforce railway tracks and bridges along the route and add containers, trains, and equipment such as mobile cranes and forklifts. These investments are expected to increase Lobito’s transportation capacity from 0.4 million metric tons per year today to 4.6 million metric tons. It will also benefit the local economy, where minerals make up 90 percent of the DRC’s total exports, accounting for 40 percent of its GDP and $30 billion in value as of last year.
Through the upgraded railway, port, and corresponding sea routes, exports for these critical minerals to global markets are expected on average to cost 30 percent less and take 29 fewer days. As a result, the upgrades are also expected to save over 3 million metric tons of carbon dioxide from transporting critical minerals, compared to any of the other existing routes.
In Angola, the project will upgrade critical infrastructure to international standards and will ensure that access to rail remains open to all paying customers. It is expected to generate significant local income there, with total local procurement of goods and services expected to reach more than $350 million within the first five years.
And it is expected to create more than 1,000 new full-time jobs for Angolans, growing the existing workforce from 434 to more than 1,500.
Other support projects will benefit from the investments in the Lobito Corridor.
For example, a $10 million loan from DFC to Seba Foods Zambia Ltd. is designed to support the expansion of its food production and storage capacity for maize-based, soya-based, and other nutritious and affordable consumer food products, strengthening the food value chain in Zambia, which is on the eastern end of the Lobito Corridor.
Seba Foods was the first U.S. government-financed food security and agribusiness-focused investment following the announcement of the vision for the Lobito Corridor.
This project was profiled in 2024.