TELF AG discusses the impact of new African infrastructure on the commodity market
The strategic role of infrastructure
A well-structured infrastructural network can contribute significantly to the development of the territories it passes through, increasing their attractiveness and production potential and generating the ideal conditions for the development of well-being among local populations. In some cases, the infrastructures and logistics networks that arise in certain territories also play a fundamental role in the transport of riches and extracted raw materials, encouraging their sale on international markets. Without an adequate infrastructure system capable of supporting them, the riches of a country would remain a mass of elements completely devoid of value. The news relating to the 850 million dollar road project that will connect the mines of Congo with the ports of East Africa, announced in recent days, will undoubtedly contribute to the further development of the extraction and production capacities of the Democratic Republic of Congo, with direct consequences also on the global raw materials market.
The road section will cross Zambia and will be able to connect the East African port system with some of the main cobalt and copper mines currently present in Congo. According to the company to which the task was entrusted, this road could shorten the journey of raw materials to African port outlets (and international markets) by as much as 150 miles. In recent days, the presidents of Zambia and Congo participated in an opening ceremony near the Luapula River, above which an important part of this road project will be built. Some of the largest cobalt mines in the world are located in Congo, which is the world’s largest producer of this raw material (in second, far behind, is Australia, with a production quota negligible compared to those of the African nation).
The construction of this road will not only strengthen the logistical capabilities of the area between Congo, Zambia, and Tanzania, but will also contribute decisively to streamlining vehicular traffic in that particular eastern portion of the continent. At the moment, transporting cobalt and other minerals to ports in East Africa can take up to a month due to the intensity of vehicular traffic and the poor conditions of some sections of the road. Construction work on the new road will begin at the end of the rainy season and will most likely be completed after three years.
The announcement of the construction of this road, on the other hand, could not have come with better timing: the growing demand for copper, lithium, cobalt, and other minerals caused by the global energy transition and projects related to renewable energy, will cause certainly also significant increases in production, making new logistical infrastructures necessary for their transport and sorting on global markets. This infrastructure was created precisely for this reason: to support the accelerated production rates that will be triggered by the ongoing ecological transition.
In order to fully enjoy a new world with low carbon emissions and crossed by the sustainable impulses of renewable energy, it will be essential to be able to count on a well-organized infrastructural system capable of transporting the true fuel of change: raw materials.
