China’s $1.4 Billion Investment in Tanzania-Zambia Railway Enhances Trade

The China Civil Engineering Construction Corporation will invest $1.4 billion in the TAZARA railway to enhance copper export logistics from central Africa. $1 billion will rehabilitate rail tracks, while new locomotives and wagons are planned. This investment marks a significant moment in China’s economic engagement with Africa, following a declining trend in lending.

The China Civil Engineering Construction Corporation (CCECC) plans to invest $1.4 billion to upgrade the Tanzania-Zambia railway, also referred to as TAZARA. This development is expected to enhance the primary transportation route for copper exports from central Africa and alleviate logistics challenges faced in South Africa, as reported by Reuters.

Bruno Ching’andu, CEO of the TAZARA Authority, stated, “The decision to grant a concession follows an in-depth evaluation of TAZARA’s challenges over the years, which necessitated urgent intervention.” Last year, China signed a deal aimed at revitalizing the 50-year-old railway, amidst U.S. investments in a competing transport route known as Lobito.

Out of the $1.4 billion investment, approximately $1 billion will be allocated to rehabilitating TAZARA’s rail tracks. The remainder will finance the purchase of 32 new locomotives and 762 new wagons, enhancing overall capacity and efficiency, as noted by Ching’andu.

Additionally, the concession is structured to involve three years dedicated to construction and 27 years focused on operation and maintenance. It is important to note that negotiations between the parties involved are still ongoing. This investment marks a crucial step in China’s financial engagement with Africa, which experienced a substantial decline in lending last year, reaching its lowest point in two decades after peaking at $28.4 billion in 2016.

In summary, the $1.4 billion investment by CCECC to upgrade the TAZARA railway represents a vital initiative aimed at enhancing copper export routes from central Africa. This project is expected to address significant logistical challenges and increase operational capacity, signifying an important moment in China’s ongoing economic involvement in Africa. With ongoing negotiations for the concession, the railway’s future operation and maintenance remain critical areas of focus.

Original Source: www.miningmx.com