Ivanhoe Mines Agrees to First Long-Term Commitment to Transport Minerals via the Lobito Corridor

[left to right] Jeremy Weir (CEO of Trafigura), Robert Friedland (Founder and CEO Ivanhoe Mines), Francisco Franca (CEO Lobito Atlantic Railway)

According to a February 7, 2024, press release from Trafigura, Ivanhoe's (JV partner is Zijin Mining) Kamoa-Kakula mine in the DRC has agreed to use the Lobito Corridor's railway to transport mined copper for a minimum of six years. This marks the first long-term commercial commitment to the Lobito Atlantic Railway since Trafigura's and JV partners won the concession from the government of Angola.

Jeremy Weir, CEO of Trafigura had this to say:

"We are pleased to be one of the first commercial customers to agree terms for a long-term commitment to use the Lobito Atlantic Railway and we look forward to welcoming other customers to join Ivanhoe Mines and Trafigura in the coming months... These commitments announced today support the consortium’s aim to grow the volumes on the corridor so that it becomes the leading rail transport link in sub-Saharan Africa.”

In 2022, the Lobito Atlantic Railway consortium, comprising Trafigura, Mota-Engil and Vecturis, was awarded a 30-year concession for the operation, management and maintenance of the Lobito Atlantic Railway (LAR) and for the Lobito Minerals port. The upgraded line will provide a more efficient and lower-carbon route to market for copper, cobalt and other metals crucial to the energy transition and will operate on the basis of open commercial access.

The project to refurbish the Lobito Atlantic Corridor benefits from the support of the governments of Angola, DRC, Zambia and the U.S. government’s Partnership for Global Infrastructure Investment (PGII). The project represents an investment of more than USD500 million over the lifetime of the concession, with a potential financing of at least USD250 million from the U.S. International Development Finance Corporation. The investment will enable the renovation of sections of the railway line and associated infrastructure, in addition to securing more than 1,500 wagons and 35 locomotives.

This is an important early step in achieving the ambitious goal the partners have of exporting one million tonnes per annum of minerals before the end of the decade. Trafigura's allocation of the Lobito Atlantic Railway will increase to 450,000 tonnes per annum in 2025, and the Kamoa-Kakula copper complex has been allocated a minimum capacity of 120,000 tonnes and up to 240,000 tonnes if required.

Statements from Ivanhoe's CEO, Robert Friedland, shine a light on the importance of the Lobito Corridor and why more mines will be looking closely at involving it in its supply chain moving forward:

“The transformative economic corridor will unlock more copper projects due 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. Kitoko is located only 30 kilometres from the existing rail line.”