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Tanzania plans new $5.6 billion rail to iron ore, coal-rich area

Tanzania is seeking $5.6 billion for a new railway in the south linking the Indian Ocean to Lake Nyasa and traversing regions rich in iron-ore, coal and graphite.

The East African nation is looking for public-private partnerships for the 1,000-kilometer (621-mile) line, according to a presentation by Tanzania Railways Corp. managing director Masanja Kadogosa. The agency made a pitch to investors and financiers at the Africa Investment Forum in Marrakech, Morocco, earlier this month and secured at least $2.2 billion of interest in the project, he said.

There’s been a rush on railway projects in the region as countries compete to transport minerals. The US is helping Zambia build a rail road that will connect the so-called copperbelt with an existing line running to the Angolan port of Lobito, while China is negotiating a concession to operate a line connecting Zambia’s copper-mining heartland with the Tanzanian port of Dar es Salaam.

The Mtwara-Mbamba Bay railway with spurs to Mozambique, Zambia and Malawi was first proposed two decades ago, Kadogosa said. It will cater for proposed coal and iron ore mines in Mchuchuma and Liganga, and also serve Dangote Cement Plc and Tancoal Energy Ltd.

“The project is not beneficial for Tanzania alone, it is a regional railway that connects four countries,” he said. “Large financial institutions are more interested in regional projects that integrate Africa and facilitate trade.”

Tanzania is expanding its railway network with a view to hasten the pace of industrialization and to boost trade by capturing cargo for neighboring nations.

It’s constructing a separate 1,219-kilometer link between the port in the commercial capital of Dar es Salaam and Mwanza city by Lake Victoria. The line will have branches west to Burundi, Rwanda and the Democratic Republic of Congo.

Turkish contractor Yapi Merkezi Insaat VE Sanayi AS, which was awarded contracts for four phases of that railway, is restructuring $1 billion of loans after a row over payments hit its cash flows. One portion of the line is being developed by China Civil Engineering Construction Corp. and China Railway Construction Ltd.

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