U.S. Funds Lobito Rail Corridor Despite Budget Cuts

The United States remains committed to financing the Lobito rail corridor, ensuring the transportation of vital minerals from Africa’s copperbelt to Western markets. This is reported by the railway transport news portal Railway Supply.

Despite President Donald Trump’s aggressive spending cuts, a U.S. diplomat reaffirmed this commitment during a visit to Angola.

U.S. Pledges Support for Lobito Rail Corridor

The U.S. International Development Finance Corporation (DFC), established in 2019 during Trump’s first term, has pledged a $550 million loan for the Lobito corridor.

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This railway project plays a crucial role in reducing China’s dominance over copper and cobalt supplies in the region. Concerns arose due to broader budget reductions, but U.S. Ambassador to Angola James Story addressed these fears on Wednesday.

Story, accompanied by European diplomats, Angolan officials, and executives from Lobito Atlantic Railways, visited infrastructure sites to assess progress. When asked about the project’s financial security, Story responded, “Not at the moment. All projects involving the DFC and Exim Bank remain in place, and we continue working on them.”

Strategic Importance of the Lobito Rail Corridor

He also dismissed speculation about a shift in U.S. priorities. “Various organizations claim we are withdrawing from this project, but that is incorrect,” he emphasized. His remarks reinforced Washington’s long-term commitment to supporting Angola, the Democratic Republic of Congo, and Zambia through the Lobito corridor.

In 2022, Angola granted a 30-year concession for the railway to the Lobito Atlantic Railway consortium, a joint venture led by commodities trader Trafigura, construction giant Mota-Engil, and rail operator Vecturis SA. The first phase includes refurbishing 1,300 kilometers (800 miles) of existing railway across Angola while extending it into the Democratic Republic of Congo’s mining hub. This development aims to facilitate copper and cobalt exports via the Atlantic coast.

A second phase, currently undergoing a feasibility study, would expand the corridor to Zambia, Africa’s second-largest copper producer after the DRC. This extension would further integrate regional mining operations with global supply chains.

Lobito Atlantic Railways CEO Francisco Franca, present during the tour, confirmed that DFC financing agreements were nearing completion. “Within two or three months, we expect to finalize contract signings, followed by standard international financing procedures,” Franca stated.

EU Ambassador to Angola Rosário Bento, who also attended the visit, reiterated Western governments’ support for the project. “The United States has vested interests in the region and is already receiving raw material shipments through the Lobito corridor,” she said. “I don’t see the U.S. disengaging from something that directly benefits them.”

Despite broader spending cuts, Washington’s backing of Lobito remains unchanged. The railway’s strategic importance in securing mineral resources and countering Chinese influence underscores its geopolitical significance.

Source: www.reuters.com

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