• Inside Labour

    The 'casualisation' of the workforce is often a ploy to cut costs, says Terry Bell.

  • When drones go dancing

    Drone technology's future is about to come to life in Cape Town, says Arthur Goldstuck.

  • Testing times for Matona

    New Eskom CEO Tshediso Matona has his work out cut out for him, says Mzwandile Jacks.

Data provided by iNet BFA
Loading...
See More

Rail puts brakes on Africa's mineral boom

Jan 30 2013 22:10 AFP
Africa map

inadequate rail networks were limiting economic potential particularly in West Africa and Mozambique. (Picture: Shutterstock) (Shutterstock)

Related Articles

Doing business in Africa

Africa's moment arrives

African growth no mirage

Terrorism in Africa set to top G8 agenda

Africa's chance to shine

Is Africa's focus on GDP misplaced?

 
Johannesburg - African nations will need to spend more than $50bn in the next ten years on new rail networks to meet growing demand for mineral resources, Standard Bank said on Wednesday.

The continent's largest bank said a lack of sufficient freight rail infrastructure was limiting the economic potential of African nations and acting as a brake on the booming commodities sector.

"Africa will need to spend more than $50bn in the next decade on building 4 000km of additional rail infrastructure to unlock the bulk mineral resource potential that the continent holds," the bank said.

In recent years, African countries have begun exporting more minerals like iron ore, manganese and coal.

But companies operating in the continent have over the years raised concern over backlogs caused by transportation delays.

"As mining activities in key regions expand, mining output is starting to exceed existing rail capacity despite ongoing efforts to upgrade and maintain these rail links," said David Humphrey, who heads the banks Power & Infrastructure division.

He said that inadequate rail networks were limiting economic potential particularly in West Africa and Mozambique.

"Despite this enthusiasm, the ability to fully exploit these recourses is limited by infrastructure constraints," Humphrey said in a statement.

Earlier this month global mining giant Rio Tinto made a $3bn (€2.2bn) write-down on its Mozambican assets owing in large part to problems transporting coal from mines in Tete.

The disclosure forced the resignation of the company's chief executive.

Standard Bank says Mozambique's high quality coal reserves of more than 35 billion tons and its proximity to large markets like India and the Far East will require investment.

Plans are on the table to boost rail links, but previous projects have spluttered along.

Five southern African countries recently unveiled a plan to coordinate their rail services to bolster trade through the port in Durban, South Africa.

Railways companies in the Democratic Republic of Congo and landlocked Zambia, Zimbabwe and Botswana plan to streamline existing rail infrastructure to facilitate transport to South Africa's Indian Ocean port.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

africa  |  minerals
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
5 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Expanding your business requires capital and banks have stringent lending criteria in place.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...