Tanzania has signed a $2.2 billion contract with two Chinese firms to build a railway connecting Dar es Salaam to Burundi, enhancing nickel exports and cross-border trade. The 282-kilometer line will support transportation of 3 million metric tons of ore annually, financed by the African Development Bank. The project underscores increasing collaboration in infrastructure between China and Africa.
Tanzania has entered into a $2.2 billion agreement with two Chinese companies to construct a standard gauge railway connecting the port of Dar es Salaam with a nickel mine in Burundi. The selected contractors are China Railway Engineering Group and China Railway Engineering Design and Consulting Group, as announced by Tanzania Railways. This initiative arises from a bilateral agreement between the governments of Tanzania and Burundi, aiming to enhance transportation and trade efficiency between the two nations.
The rail link, spanning 282 kilometers, will extend from the Tanzanian town of Uvinza, close to the Burundi border, to Musongati, which is situated near substantial nickel reserves. Additionally, this area is rich in other minerals including gold, platinum, palladium, copper, and iron. The increasing demand for nickel, essential for various industries including stainless steel and electric vehicle production, has contributed to its price surge, rising from under $10,000 per ton in 2016 to approximately $20,000 today.
Once completed, the railway is expected to facilitate the transportation of an estimated 3 million metric tons of ore annually. The African Development Bank is set to finance this significant project through a concessional loan. Mwigulu Nchemba, Tanzania’s finance minister, highlighted the importance of this moment, noting it as the bank’s inaugural investment in financing railway developments within the country.
The construction of a railway link between Tanzania and Burundi represents a strategic development for both nations, particularly in the context of trade and resource transportation. Nickel, which has seen a substantial price increase due to various industrial demands, is a crucial component of this project. The rail infrastructure aims not only to streamline the exportation of valuable minerals but also to strengthen economic ties between Tanzania and Burundi. The involvement of Chinese contractors underscores the increasing collaboration between African nations and Chinese firms in infrastructure development.
In conclusion, the signing of a $2.2 billion railway construction deal marks a pivotal step in enhancing trade efficiency between Tanzania and Burundi. With anticipated annual transport capabilities of 3 million metric tons of ore, this railway is poised to capitalize on the burgeoning nickel market. The financial backing by the African Development Bank further emphasizes the project’s significance in the region’s future economic growth.
Original Source: www.globalconstructionreview.com
