Tanzania poised to play key role in US-driven Lobito Corridor project

Launched in September 2023, the Lobito Corridor currently links the mineral-rich regions of northern Zambia and southern DRC to Angola’s Lobito port on the Atlantic Ocean.

The corridor was initially spearheaded by the US and its European allies to facilitate the export of critical minerals like copper and cobalt.

Now, Washington is eyeing East Africa, specifically Tanzania, to extend this corridor, which could potentially reshape the economic dynamics of the region.

In an exclusive interview with The Citizen over the weekend, Acting Special Coordinator for the Partnership for Global Infrastructure and Investment (PGI) at the US State Department, Ms Helaina Matza, revealed the early stages of discussions aimed at incorporating Tanzania into what she described as the "Trans-Africa Corridor."

“Our mission on this trip is to continue expanding the Trans-Africa Corridor. That includes relaunching our partnership with the DRC and engaging with the Tanzanian government and private sector on next steps towards extending the economic corridor to the Indian Ocean,” said Ms Matza.

“We are working with the government and the private sector to understand local needs and how best to extend the corridor, not just physically but also by developing layered projects that capitalise on reduced transit times.”

The potential benefits for Tanzania are immense, she noted. The US’s investment in extending the Lobito Corridor to Tanzania could significantly bolster the country's infrastructure, particularly in the mineral sector.

Ms Matza emphasised the importance of this project for Tanzania's economic diversification.

“Part of why we think this project is so special and why it’s such an important investment in Tanzania’s economic diversification is that it’s more than just helping support an important nickel project,” she explained.

“It’s about creating opportunities for processing in the country, developing a special economic zone, and training local Tanzanians to participate in every part of the value chain of that industry.”

This development comes at a time when the competition between the US and China for access to Africa’s critical minerals is intensifying.

China, which has long been a dominant player in the African mining sector, has established extensive supply chains and infrastructure projects across the continent, including the Tazara railway that connects Zambia’s copperbelt to Dar es Salaam.

The US’s move to extend the Lobito Corridor to Tanzania can be seen as a strategic counter to China’s influence.

The US’s engagement in this project offers Tanzania and the region a significant opportunity to diversify their economic partnerships.

Experts believe that, while China has been a major investor in African infrastructure, the US’s approach, which relies on a consortium of investors rather than a single government guarantee, presents a different model of development.

They say that the Lobito Corridor could revolutionise the transport and export of minerals in Africa.

According to Ms Matza, reducing the transit time from 45 days to just 36 hours could open up new markets and drastically reduce costs.

“When you bring trade routes down from 45 days to 36 hours, it opens up a whole new world for the market,” she said.

The project’s significance extends beyond just economic benefits.

The infrastructure improvements, including the planned 1,300 kilometres of new railway from Zambia to Tanzania, are expected to have a transformative impact on the region’s connectivity.

“This will not only facilitate the export of minerals but also improve access to global markets for other goods, fostering broader economic development,” said an economic consultant based in Dar es Salaam, Mr Abdi Mohamed.

The African Development Bank has already pledged $500 million towards the project, with Italy committing $320 million.

Ms Matza noted fundraising efforts are ongoing, with commercial lenders being sought to finance the greenfield rail across Angola, the DRC, and Zambia.

The corridor’s total cost is estimated to be between $1 billion and $2.3 billion, according to the Harvard International Review.

For Tanzania, Mr Mohamed said, the inclusion in this US-led corridor is a golden opportunity.

Not only does it promise to unlock the potential of the Kabanga nickel deposit, but it also positions Tanzania as a critical player in the global supply chain of essential minerals.

“The investment in infrastructure will likely spur other economic activities, creating jobs and driving growth in regions that have long been underserved,” he told The Citizen in a separate interview concerning the project.

As the world moves towards a greener economy, the demand for minerals like nickel, cobalt, and lithium is expected to soar.

The International Energy Agency estimates that demand for these minerals will increase by up to 40 times by 2040.

Tanzania, with its abundant mineral resources, stands to benefit immensely from being part of the Lobito Corridor.

As the competition between the US and China intensifies, Tanzania could emerge as a key beneficiary, reaping the rewards of enhanced connectivity and increased investment.