The Kamoa-Kakula Copper Complex, in the Democratic Republic of Congo (DRC), and commodities trader Trafigura have both signed a term sheet outlining the key terms for a reserve capacity agreement for transporting mineral products from the mine along the Lobito Atlantic railway corridor, a new import-export trade route between the Central African Copperbelt and Angola’s Atlantic coast.

Canadian mining company Ivanhoe Mines founder and executive co-chairperson Robert Friedland and president Marna Cloete announced the signing on February 7 at the 2024 Investing in African Mining Indaba, in Cape Town.

Kamoa-Kakula is a joint venture between Ivanhoe Mines (39.6%), Zijin Mining (39.6%), Crystal River Global (0.8%) and the DRC government (20%).

The reserve capacity agreement, to be based on the nonbinding term sheet, will allocate Kamoa-Kakula the right to transport between 120 000 t/y and 240 000 t/y of blister-anode or concentrate along the Lobito Corridor.

The term sheet outlines a minimum term for the agreement of five years starting in 2025, following a ramp-up year in 2024.

The costs of exporting mineral products along the Lobito Corridor are expected to be cheaper than the current market price for trucking on existing export routes and the rates are expected to reduce further as volumes transported on the rail line increase.

The term sheet also extends the initial trial shipments, as originally announced on August 18 last year, with up to a further 10 000 t to be transported along the Lobito Corridor this year.

The initial trial shipments started in December.

“We admire the hard work of the Lobito Corridor consortium and [commodities trading company] Trafigura, working with their partners in the DRC and Angola, to build a new supply chain that is fast becoming one of the most important trade routes for vital copper metal in the world,” Friedland said.

He added that the transformative economic corridor would unlock more copper projects owing to the lower logistical costs.

“Cheaper logistics increase the amount of economically recoverable copper across the Copperbelt, as cut-off grades can be lowered. This makes a significant impact on discoveries made in the DRC, such as the recent high-grade and open-ended Kitoko copper discovery in the Western Foreland, where we are stepping up exploration activities this year to find more ultra-green copper metal,” Friedland said.

Kitoko is located 30 km from the existing rail line.

The Lobito Atlantic railway is expected to ramp up to an export capacity of one-million tonnes a year before 2030. Trafigura’s allocation of export capacity on the Lobito Atlantic railway will be up to 450 000 t/y from 2025.

“We very much welcome Ivanhoe Mines’ Kamoa-Kakula in becoming the first customer to sign a term sheet to export minerals along the Lobito rail corridor. As a consortium member, Trafigura has also 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,” Trafigura group executive chairperson and CEO Jeremy Weir said.

The Lobito Atlantic railway corridor links the DRC Copperbelt to the Port of Lobito in Angola. The rail line extends 1 289 km east, from the Port of Lobito to the Angola–DRC border town of Luau.

The line then extends a further 450 km east into the DRC, on the Société Nationale des Chemins de fer du Congo rail network, to the city of Kolwezi. The line passes within 5 km of the Kamoa-Kakula licence boundary and through Ivanhoe’s Western Foreland holdings.

Kamoa-Kakula currently trucks its copper concentrates by road across sub- Saharan Africa to the ports of Durban, in South Africa, and Dar es Salaam, in Tanzania, as well as Beira, in Mozambique, and Walvis Bay, in Namibia. In 2023, about 90% of Kamoa-Kakula’s concentrates were shipped to international customers from the ports of Durban and Dar es Salaam, where an average round trip takes 40 to 50 days.

The distance from Kamoa-Kakula to the Port of Lobito is about half that compared with the Port of Durban. Moreover, transportation by rail is significantly quicker and less energy-intensive.

An initial trial shipment, consisting of two trains carrying about 1 110 t of Kamoa-Kakula’s copper concentrate, was loaded onto rail wagons at the Impala Terminals warehouse in Kolwezi and departed west along the Lobito Corridor on December 23. The shipment arrived at the Port of Lobito eight days later on December 31. Since then, shipments transporting the remaining tonnes from the trial shipment have continued regularly.

The Lobito Atlantic railway consortium has a 30-year concession for railway services and support logistics on the Lobito Corridor. It is comprised of Trafigura of Singapore, Mota-Engil of Portugal, and Vecturis of Belgium. The consortium has committed to investing $455-million in Angola and up to a further $100-million in the DRC to improve the Lobito Corridor’s rail infrastructure, capacity and safety, including rolling stock consisting of more than 1 500 wagons and 35 locomotives.

The Lobito Corridor will also reduce congestion on the DRC’s other logistics corridors and significantly reduce the cost of exporting from and importing into the DRC Copperbelt.

On September 9 last year, the US and the European Union jointly announced their support for the Lobito Corridor through the Partnership for Global Infrastructure and Investment (PGII). The PGII, founded in 2022, is a collaborative effort by Group of 7 nations to fund infrastructure projects in developing nations.

The project represents an investment of more than $500-million over the lifetime of the concession, with a potential financing of at least $250-million from the US International Development Finance Corporation.

The DRC, Angola and Zambia will benefit from accelerated social and economic development as a direct consequence of this support.

The Lobito Atlantic railway corridor is expected to significantly improve the logistical costs and reduce the Scope 3 emissions carbon footprint of Kamoa-Kakula copper exports, especially once the rail spur has been built connecting the line directly to Kamoa-Kakula.

The development of Ivanhoe’s current and future copper discoveries within the Western Foreland basin will also greatly benefit from the Lobito Corridor.