Mozambique's largest port, which is a key hub for global chrome exports, is set to upgrade its rail links and strengthen a planned $2 billion production capacity expansion.
According to the AfDB, the African Development Bank has provided a $40 million loan for the purchase of locomotives and wagons, and a further $30 million loan is being considered from the Development Bank of Southern Africa to improve the line between Maputo port and South Africa. It is said that there is. DBSA declined to comment.
AfDB country manager Cesar Mbah Mbogo said in an interview that the funding will help shift millions of tonnes of minerals such as chromium transported by truck to rail, reducing costs and reducing road traffic by up to 40%. Said to be helpful.
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Traffic at neighboring South Africa's ports and railways has plummeted due to corruption and theft, prompting calls for exporters to use Maputo instead. As a result, as volumes continue to rise, border congestion has become as long as 35 kilometers (22 miles), as chrome, iron ore and coal miners rely on trucks to transport their products to ports. I am.
Truck transport costs are about 40% higher per tonne than rail transport, according to mining lobby group the Minerals Council of South Africa, which estimates that more than half of South Africa's chromium is transported through Maputo. Melafe Resources, Glencore's joint venture in the country, estimates that around 70% of exports use road transport.
Luke Nickels, senior analyst at CRU in London, said South Africa accounts for more than 60% of the world's chromium ore supply and global production of ferrochrome (a more processed form used to make stainless steel). It accounts for about one-fifth of the total.
A consortium including DP World and Mozambique's Portos e Caminhos de Ferro de Mozambique (CFM) will this week sign an agreement with the government extending the port concession until 2058. Interestholders plan to spend more than $2 billion to expand port capacity. From 37 million tons to 54 million tons per year.
CFM is also almost doubling the capacity of the rail link from the South African border to Maputo. Mozambique's Transport and Communications Minister Mateus Magala said at least 60-70% of cargo should arrive by rail.
“The numbers should be the other way around,” he said in an interview in Maputo. “We expect to see a policy-driven model shift within the next three months.”
Maputo Port Development Company CEO Osorio Lucas said the main hurdle in loading minerals from trucks onto trains is that CFM's operations end at the South African border.
“South Africa will have to play with the ball,” he said in an interview.
© 2024 Bloomberg
