North Western Railway, Zambia’s first private sector-driven liner, could soon be on the slippers following the company’s recent partnership with Grindrod to develop the project to link Zambia with Angola.
In a statement, North Western Railway, will partner with Grindrod’s Mauritian-based subsidiary to undertake various liner jobs over the 590 kilometer cape gauge to be built in two phases from Chingola in northern Zambia to the Angolan border at an estimated cost of more than US$1 billion.
This follows discussions formalized for Grindrod to work with Zambian company, NWR on the project under exclusive rights being granted to NWR by the Zambian government in July 2006.
The partnership between Grindrod Mauritius and North Western Railway were signed on February 3 and will ostensibly allow the parties conclude the bankable feasibility study currently under way.
According to the projections by developers, the 290km first phase of the railway project will extends from Chingola to the Kansanshi, Lumwana and Kalumbila mines in north western Zambia, some of the country’s Greenfield mines and will involve an estimated capital cost of $489 million.
The second phase, expected to gobble about $500m, will connect the line with the Benguela line on the Zambia-Angola border near Jimbe. The first phase, according to project developers, is intended to service existing ore and finished copper traffic.
Phase two is expected to open up a direct corridor to Lobito, which would allow landlocked Zambia to import oil directly from Angola and stimulate further mining activity in the western copper belt region.
KPMG’s infrastructure and major projects team, have developed the project with NWR over the past one year and facilitated the closure of the deal. Construction is expected to start this year subject to the conclusion of the phase one bankable feasibility study, according to data available to the Mining news Zambia
Grindrod’s rail division runs railways and builds, refurbishes and maintains locomotives and wagons, provides rail signalling systems and constructs and maintains track infrastructure.
Enoch Kavindele, the developer and a former Zambia’s vice-president of Zambia has been developing the project over the years and the synergies with Grindrod’s rail businesses have made Grindrod an ideal partner.
His counterpart and Grindrod’s chief executive, James Holley, said recently the division had in the past few years developed its rail capabilities and is growing its capacity to participate in the growth in Africa’s rail sector.
If successful, the partnership will be a perfect co-existence that the African continent seeks to undertake.
Dave Rennie, the chief executive of the Grindrod Freight Services division, said the investment in the new railway line would enable Grindrod to extract synergies from its existing investments in the north-south rail corridor and its 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 two,” he recently told Bloomberg news.
The copperbelt straddled the border of northern Zambia and southern Democratic Republic of Congo and is one of the richest and most underdeveloped geological regions in Africa.
This will inevitably mean that Barrick Gold Corporation, owners of Lumwana Copper Mines and First Quantum Minerals Limited, owners of Kansanshi Copper Mines-all in north western Zambia, will benefit.
Accordingly, the success of the project will entail cost saving measures for the two copper producers in Zambia, Africa’s leading producer of the red metal as they will be expected to cut transport costs.
“The first trains will be ready to carry copper concentrates in 18 months,” Enoch Kavindele, chairman of North West Rail Company Ltd., said recently.
The success of the project, will undoubtedly assist the two companies reduce substantially on the cost of transporting their copper concentrates from respective mines in North western Zambia to Copperbelet using the road network.
This railway project will now reduce the toll on the overworked road infrastructure in the country that need urgent facelift.
Incidentally, most copper exports from landlocked Zambia are ferried by road to ports in South Africa and Tanzania, which has prompted the Government to seek the introduction of toll-road system from 1 November, 2013 to preserve the infrastructure.
According to experts at the Zambia’s Road Development Agency, tasked to set up the toll-road fee paying project, it is expected that all revenue realized in billions of Kwacha will be re-invested into the road infrastructure network.
The Zambian Government seeks to invest in excess of US$120 million in refurbishing the Zambia railways Limited in refurbishment to shift freight to trains and expand trade which will ultimately, benefit mining companies by making deliveries cheaper and safer.