International Competition in the Lobito Corridor

by Sebastien Goulard

In Central Africa, the Lobito Corridor is expected to better connect the states of Angola, Zambia, and the Democratic Republic of Congo (DRC), ensuring their shared prosperity. Today, the development of the Lobito Corridor has become a significant project of interest not only to Africa but also internationally.

The Lobito Corridor

The Lobito Corridor consists of a nearly 1,300 km railway line, starting from Ndola in Zambia and leading to the port of Lobito in Angola. Part of the route also passes through the Lualaba and Haut-Katanga provinces in the DRC, which, along with northern Zambia, make up the Copper Belt. This line is expected to be complemented by a network of secondary roads that will better connect Zambian and Congolese mines to the global market. Unlike other infrastructure projects in Africa, the Lobito Corridor is primarily constructed for mineral transportation. It involves renovating and extending lines initially built in the early 20th century during Portuguese and Belgian colonization, aimed at exporting copper ore to European ports.

Mining companies based in the DRC have already expressed their intention to use the Lobito Corridor to export their products. Today, copper or cobalt ores from southern DRC are exported via Tanzanian ports to the east or after a long journey across southern Africa to Durban. These transportation solutions cause congestion on still inadequate road networks and extend supply chain delays.

On the Angolan segment, significant progress has been made. The railway between Lobito and Luao at the Zambian border was completed and operational in 2019, constructed by the Chinese company “China Railway 20 Bureau Group Corporation” (CR20).

In July 2023, the Angolan government granted a 30-year concession on the Lobito Corridor line to the “Lobito Atlantic Railway” consortium led by the Swiss company Trafigura. The consortium could invest up to $435 million in Angola and $100 million in the DRC, operating up to 35 locomotives on the new line.

Luanda has also invested in renovating the port of Lobito in Benguela province, which has become attractive to foreign operators. In October 2023, the French group “Africa Global Logistics” (AGL) won the concession for the Lobito terminal after committing to invest €100 million to enhance its capabilities.

In the DRC, further progress is needed for the rail connection to the Lobito Corridor, due to insufficient investments by local authorities. However, once the connection is made, the corridor is expected to increase trade between these three African countries.

The Lobito Corridor Supported by the United States and the European Union

The construction of this corridor has become an international issue due to the strategic importance of minerals extracted from the DRC and Zambian soils. Major powers like the United States and the European Union have expressed their willingness to finance its development under the Partnership for Global Infrastructure and Investment. At the G20 in September 2023 in New Delhi, European and American leaders made a joint declaration announcing their cooperation in investments related to the construction of the line (notably between the DRC and Angola) to facilitate regional trade and provide economic and social development solutions along the corridor. Already in May 2023, at the G7 summit in Hiroshima, the United States announced a $250 million plan for the renovation of the Lobito Corridor.

For its part, the European Union signed a partnership agreement with the African Development Bank regarding Lobito Corridor infrastructure in October 2023. On April 25, 2024, Samantha Power, Administrator of the United States Agency for International Development (USAID), visited Lobito and made several announcements confirming Washington’s interest in this new corridor. The United States is expected to invest up to $3.5 million to support Angolan entrepreneurs and civil society, as well as $5 million for digital connectivity projects along the corridor. An additional $5 million would go to a road safety program, and $900,000 would fund solar energy projects.

The diversity of funded actions demonstrates that the United States and the European Union have adopted an inclusive vision for connectivity projects, extending beyond infrastructure alone.

A Response to Chinese Ambitions?

The Lobito Corridor is often described as an American and European response to China’s Belt and Road Initiative strategy in Africa. China has massively invested in African transport infrastructure, such as the Djibouti-Ethiopia railway program, raising concerns among Western powers, who have developed their own strategies like the European Union’s “Global Gateway”.

This rivalry among foreign powers is viewed positively by countries like Angola, where infrastructure needs are significant. China remains a major partner of this oil-rich state, which seeks to reduce its dependency on the hydrocarbon sector. Angola has been implementing new reforms in recent years to open up its economy further and promote innovation, focusing on startup development. Angola ranks first in Central Africa for the number of startups. This new strategy is part of the “Angola 2050” development plan adopted by the Angolan parliament in June 2023.

Beijing hopes to support Luanda in diversifying Angola’s economy from a South-South cooperation perspective. Since 2010, China and Angola have established a strategic partnership, and today Beijing is by far Luanda’s leading trade partner.

As noted by Ovigwe Eguegu (Accord), China has also contributed to modernizing Angola’s energy sector infrastructure through numerous loans. Between 2020 and 2022, nearly 27% of Chinese loans to the African continent were destined for Angola. These funds helped structure the hydrocarbon sector, but in return, Angola heavily indebted itself to Chinese banks. During his visit to Beijing in March 2024, President Joao Lourenço highlighted the difficult, “suffocating” situation caused by Angola’s $18 billion debt to China. This debt is partly repaid in oil, prompting the country to leave OPEC in December 2023 to produce beyond the quotas set. However, the Angolan president seeks to balance his country’s relationships with different partners to ensure its independence. Notably, several projects related to the Lobito Corridor have been revised to reduce Chinese influence. For example, before being awarded to AGL, the Lobito port concession was removed from the Chinese consortium CITIC and Shantong Port. Angola, like other African states, aims to find a balance between foreign partnerships to achieve its national development goals.

The Lobito Corridor could eventually be extended to the port of Dar es Salaam in Tanzania, creating a trans-African railway that would allow the export of Congolese and Zambian minerals to the United States and Europe via the port of Lobito, and to China via Dar es Salaam.