Tanzania Commences $2.2 Billion Rail Project with Chinese Contractors
Tanzania has signed a $2.2 billion agreement with Chinese firms to build a railway linking Dar es Salaam to a nickel mine in Burundi. The project aims to enhance nickel export efficiency and promote cross-border trade. It will be financed by the African Development Bank and is expected to transport 3 million metric tonnes of ore annually, strengthening regional economic ties.
Tanzania has formally entered into a $2.2 billion contract with two prominent Chinese companies to construct a standard gauge railroad that will connect the port city of Dar es Salaam to a nickel mining site in Burundi. The construction is commissioned to the China Railway Engineering Group and the China Railway Engineering Design and Consulting Group, following a decision made by Tanzania Railways.
The Tanzanian Minister of Transport, Makame Mbarawa, described the deal as a significant outcome of a bilateral agreement between the Tanzanian and Burundian governments. This new 282 kilometer railway aims to enhance the efficiency of nickel exports and facilitate cross-border trade between the two countries. The railway will stretch from the Tanzanian town of Uvinza near the Burundi border, to Musongati, which lies close to a significant nickel deposit, along with gold, platinum, palladium, copper, and iron reserves.
Nickel prices have shown volatility, having increased significantly over the last decade, rising from under $10,000 per metric tonne in 2016 to nearly $20,000 today. This metal is essential for manufacturing stainless steel, electric vehicle batteries, and desalination equipment, among other applications. Upon completion, the railway is projected to transport up to three million metric tonnes of ore annually.
The financing for the railway project will be provided by the African Development Bank through a concessional loan. Mwigulu Nchemba, the Minister of Finance for Tanzania, emphasized the importance of this initiative, stating that it marks the bank’s inaugural investment in the financing of railway projects in Tanzania.
This project not only represents a major infrastructural advancement for Tanzania but also strengthens the economic ties between Tanzania and Burundi, promoting regional development through improved transportation of valuable resources.
Tanzania’s decision to undertake the construction of a rail link to Burundi is rooted in the need to improve export capabilities and support trade in a region rich in natural resources. Nickel, among other minerals, is a critical commodity, and the successful execution of this project could significantly impact the economies of both nations involved. This railway is part of a broader strategy to enhance regional connectivity and optimize logistics for the mining sector, given the fluctuating global demand for nickel. The collaboration with Chinese firms reflects a growing trend in African infrastructure projects, where investments from China are often aimed at boosting local economies while providing development necessary for the extraction and export of raw materials. With the support of the African Development Bank, this rail project illustrates the blending of international finance with local infrastructural needs.
In summary, the Tanzanian government has entered into a $2.2 billion agreement with two Chinese firms to develop a vital rail link that will enhance nickel exports and bolster trade with Burundi. This project symbolizes significant bilateral cooperation and is expected to yield substantial economic benefits for both nations. Financed by the African Development Bank, this initiative marks a pivotal moment in the advancement of Tanzania’s railway infrastructure and its ongoing collaboration with international partners.
Original Source: www.globalconstructionreview.com
