The Lobito Corridor project, the multibillion-dollar, 1 300km railway development connecting Angola’s Atlantic port of Lobito to the mineral-rich DRC and Zambia, has highlighted the urgent need for South Africa to ramp up its status as a value-added industrial hub.
South Africa’s dominance of exports from Africa’s Copperbelt has eroded dramatically over the years and the Lobito project places further pressure on the country to reassess its role as trade routes shift in southern and central Africa.
According to well-known South African cross-border logistics consultant Kage Barnett, the republic now handles less than 20% of copper exports from these regions. With the Lobito Corridor scheduled for completion by 2030, costs will be about 30-40% cheaper than exporting through South African ports.
Seventy percent of the DRC’s exports currently go to China, and 70% of that goes through the Port of Dar Es Salaam in Tanzania. Some 40% of minerals from Zambia and surrounds is exported through Walvis Bay in Namibia.
However, even these ports will be impacted by the Lobito Corridor as it reduces the traditional route to the sea by two-thirds for some producers, drastically cutting transit times.
The Lobito development has now moved beyond feasibility studies, environmental and social impact assessments, and the establishment of concession agreements, into the procurement phase. Though the corridor’s potential has been applauded by many African stakeholders, there are areas of concern.
One of the most significant, as pointed out by the Africa Policy Research Institute, is that the corridor may “facilitate ‘modern plundering’ by removing the friction of exporting unprocessed ore”.
The UN Convention on Trade and Development (Unctad) has indicated when a ton of copper ore leaves Zambia, it is worth a few thousand dollars. However, when it is turned into electrical wire it is worth double that. It can be worth 10 times that when shaped into a transformer.
It is no secret that US investment in the Lobito Corridor is a direct response to China’s dominance in Africa driven mainly through the Belt and Road Initiative, the enormous infrastructure and economic development project that spans across Asia, Europe, and Africa.
Lobito intends to create westward trade flows via the Atlantic, which will help source critical minerals and commodities needed in the production of data centres, power grids, electric vehicles, and microchips in the West.
Professor Charles Wait, an economics professor at Nelson Mandela University in Gqeberha, pointed out that the “Trump administration is desperately looking for a secure supply of strategic minerals”.
“I’ll be surprised if they are less enthusiastic about this project than Biden was.”
As much as South Africa’s mineral exports from the DRC and Zambia have dropped off, Barnett can see a potential problem for local equipment manufacturers as well as logistics companies in terms of delivering chemicals or heavy earth-moving equipment to these regions.
“Many transporters have contracts for delivering chemicals, vehicles, and materials to the mines. These might shift as well due to cheaper pricing and shorter transit times,” he said.
The Department of Trade, Industry and Competition (dtic) has previously indicated that South Africa is the DRC’s most significant foreign goods and services supplier. In 2023, it contributed over 20% to the nation’s total imports.
The main products exported to the DRC are steel structures, machinery parts, cocks and valves for pipes, and parts for boring or sinking machinery.
Zwelinzima Vavi, general-secretary of the South African Federation of Trade Unions (Saftu), said the Lobito Corridor should be a wake-up call to the country’s political leadership, organised labour, Transnet, and domestic industry.
South Africa was already grappling with challenges like collapsing rail infrastructure, high logistics costs, and electricity instability, among other challenges, he said.
Vavi warned that if South Africa failed to industrialise while the continent exported raw critical minerals to the US, EU, and China, Africa risked repeating the colonial pattern where infrastructure corridors existed mainly to extract raw materials for foreign industrial powers.
“The real question is whether Southern Africa will use this infrastructure to industrialise Africa, create decent jobs, and develop regional manufacturing chains, or will it simply accelerate the export of raw minerals while African countries remain dependent and unequal?”
Solly Phetoe, general-secretary of the Congress of South African Trade Unions (Cosatu), called on the South African government to increase the capacity of the country’s ports to process and export finished goods and services to international markets, including “our own continent as part of the Africa Continental Free Trade Agreement”.
Wait agreed that it was imperative to effectively get the country’s rail and harbour networks up to world standards with “fast and smooth transport links to our neighbours to sell our manufactured and primary products like agricultural produce”.
“We must stop talking about making it easier to do business in South Africa and more aggressively remove obstacles.”
South Africa is deeply committed to Agenda 2063, the continent’s strategic framework that aims to deliver on its goal for inclusive and sustainable development. As such, Deputy Trade and Industry Minister Alexandra Abrahams said South Africa did not believe that the development of other countries undermined its own.
“Having functional corridors, including the Lobito Corridor, work to the advantage of Africa,” Abrahams said.
“South Africa’s strategic collaboration with rich critical minerals SADC countries such as the DRC, Zambia and Angola is important in ensuring that the region’s development and economic growth are accelerated.”
She emphasised that investments were flowing into South Africa as much as they were into other countries on the continent.
The government’s Rail and Ports Private Sector Participation Programme, with a total investment of about $20 billion, was attracting global private sector capital investment mainly driven by the government’s rail reforms and “investment-friendly regulatory developments”.
The dtic has been clear in wanting to transition South Africa from a raw material exporter to a value-added industrial hub.
“This we plan to do by prioritising local processing of manganese, platinum group metals (PGMs), vanadium, and chrome to support electric vehicles, hydrogen fuel cells, and energy storage.”
What is clear is that the development of Lobito Corridor has necessitated that South Africa steps up if it hopes to remain relevant in the shifting regional landscape.
