In a land-locked country, Zambia’s mines face long distances when moving their product to ports – and the poor state of the country’s rail infrastructure has made these distances increasingly expensive. So mines will be pleased to hear that government plans to turn Zambia into a ‘regional trade hub’ that is easily accessible and that can drive intra-regional trade and cross-border infrastructure projects.
When companies consider the feasibility of mining a mineral deposit, the cost of transporting the mined material or beneficiated product is a key consideration. In most cases were a bulk mineral is involved, a reliable and affordable rail service is necessary – other forms of transport are generally not cost-efficient.
But for various reasons, Zambia’s copper mines have become reliant on road freight to transport their copper cathode using the 2,500 km road to the Durban port in South Africa. This is neither sustainable for the mines nor the country. It is costly for customers, and places undue stress on the road network; it also compromises public safety on roads, and accidents have considerable impact on the public purse.
Research in South Africa showed that accidents alone (related to road freight transport) cost that economy an estimated R11.24 billion in 2010 – or approximately 5c/ton -km. By comparison, Transnet reported R436 million in cost of losses for 2010 or an external rail accident cost of about 0.4c/ton -km. It is likely that Zambia, too, is realising the unsustainable scale of the externalized costs that the trucking industry places on taxpayers.
Zambia’s rail plans are also exciting for their intention to leverage private sector participation in rehabilitating and developing certain key parts of the country’s rail network. It acknowledges that Zambia’s railways “generally operate well below their original design capacity, yet they cannot increase their volumes because of poor track condition, lack of locomotive and wagon availability and low operating capital”. In April it raised US$1 billion in sovereign debt, and doubtless some of this will go to rail projects.
The decline in the state of Zambia’s rail system had much to do with declining copper production. Zambian Railways used to carry 6 million tons (Mt) in 1975; this dropped to 1.5 Mt by 1998, and by 2009 it was just 690,000 t.
We should remember that, until the 1990s, rail was our main mode of freight transport. Unfortunately, our experiment with operating rail on concession (government granted concession rights to Railway Systems of Zambia in 2003) was unsuccessful and led to further decline for almost another decade.
Now, five new rail lines will be built over the next five years or so by Zambia Railways, in an effort to provide reliable and cost-effective bulk transportation for the mining, agriculture, and energy sectors:
- Chingola to Jimbe (the border with Angola) – the line goes through Solwezi to enhance freight and passenger transport using the port of Lobito Bay in Angola;
- Kafue to Zawi (in Zimbabwe) – the line will link the Zambia Railway line to the port at Beira in Mozambique;
- Nseluka to Mpulungu port – this line links Mpulungu to the TAZARA line at Nseluka to facilitate imports and exports from the Great Lakes region to the sea ports on the Indian Ocean;
- The extension of the Mchinji/Chipata line to TAZARA – this line would link the Chipata–Mchinji line through Petauke District to the port of Nacala in Mozambique;
- Livingstone to Sesheke – this involves the partial rehabilitation of the Mulobezi line, a spur between Livingstone and Katima Mulilo via Kazungula, and a connection to the Nambian railway system as part of the Walvis Bay – Livingstone – Lusaka – Ndola – Lubumbashi Corridor.
Apart from improving the global competitiveness of existing mining operations, these rail lines could lower the cost hurdles of potential new entrants. Zambia’s role as a regional hub also promises to link their eastern neighbours with their western ones; the rail line from the copper-mining town of Chingola to Angola, for instance, will give the country’s mining areas a shorter export route through the ports on Angola’s coastline.
Remember that Zambia is the continent’s fifth-fastest growing economy, with GDP growth of 6,6% in 2013 – and anticipated to grow 7,8% in 2014. Imagine what is possible with better rail infrastructure