(Bloomberg) --
China signed an agreement Wednesday to revamp a railway that will help landlocked Zambia, Africa’s second-largest copper producer, export the metal through Tanzania.
The heads of state of the three nations oversaw the ceremony at the Forum on China Africa-Cooperation, kicking off the biggest upgrade of the so-called Tazara railway since Mao Zedong agreed to help build it in the 1970s.
While they didn’t provide details of the memorandum of understanding, China in February said the plan would cost more than $1 billion.
The line links Zambia’s mines with Tanzania’s main port on Africa’s east coast. It could play a crucial role in exporting copper to China, the biggest consumer of the metal used in items ranging from air conditioners to electric vehicles.
Taking over the concession of a strategic export route for critical minerals from Zambia and neighboring Democratic Republic of Congo is in part a response from China to the US backing another rail project that heads the opposite direction, to Africa’s west coast. It’s the latest maneuver in a tussle for influence, which is sparking a rail revival in the region.
The Chinese government has moved quickly since Zambia requested help in refurbishing the line. State-owned China Civil Engineering Construction Corp sent its experts in December to inspect the railway. Three months later, China’s ambassador to Zambia officially handed over the proposal to revitalize the line and operate it commercially. Negotiations followed, culminating in Wednesday’s deal.
Tazara has played a symbolic role in China’s relations with Africa, having been the first major infrastructure project it built on the continent. At the time, Mao’s government had little funding of its own, yet chose to help Zambia with the new 1,860-kilometer (1,156-mile) railway.
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The landlocked nation was stranded at the time, after then-Rhodesia’s government declared independence from Britain and shut its border, blocking Zambia’s main export route via South Africa. President Kenneth Kaunda approached various funders for the rail project including the World Bank, yet only China would help.
That crucial assistance put China in a good position to now take over commercial operations on the line, which have fallen into disrepair. It operates at a fraction of the design capacity of 5 million metric tons yearly. Most of the cargo headed into and out of Zambia and Congo goes by road, with journeys taking as long a month down to South Africa’s Durban port.
“You can’t beat Tazara,” for minerals going to the Far East, Bruno Ching’andu, chief executive officer at the Tanzania-Zambia Railway Authority, said in an interview last month.
“These are the people that built the line, that constructed the line,” he said “They’ve sent several teams to look at the bridges, to look at all the infrastructures along the line. They seem certain as to what is required.”
Untried Model
The deal also reflects a more cautious approach from China toward foreign infrastructure projects after some big loans made under its ambitious Belt and Road Initiative went bad.
Zambia borrowed more than $6 billion from its lenders, and defaulted in 2020. That triggered a painful debt restructuring process that’s not yet fully complete. China Civil has proposed a public-private partnership approach to the Tazara revitalization, which focuses more on developing and running the concession on a commercial basis.
That’s an untried model in Zambia, according to Trevor Simumba, a development economist who wrote a paper on China’s lending to his country.
“This is a big test for China,” he said. “I have a feeling it’s going to succeed.”
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--With assistance from Twinnie Siu and Yanping Li.
(Updates with cost estimate in the third paragraph.)
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