The Lobito corridor railway project faces uncertainty as US funding is frozen, delaying its expansion. This situation creates opportunities for global competitors, including China, to increase their influence. This was reported by the railway transport news portal Railway Supply.

Lobito corridor railway project and Its Strategic Importance

The Lobito corridor railway project was developed to transport minerals from Africa’s copperbelt to Western markets. It received financial backing from the US International Development Finance Corp. (DFC) and USAID. However, essential funding for technical studies and feasibility assessments remains blocked.

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Government officials and project developers fear disruptions due to these financial cuts. While this initiative aligns with US strategic interests, inconsistent policies threaten its execution. The rehabilitation of Congo’s railway, linked to the Lobito corridor, is especially vulnerable.

In December, the US and EU agreed to assess Congo’s railway restoration, estimated to cost $1 billion. USAID allocated $250,000 for financial modeling and requested an additional $5 million for an updated feasibility study. While the European Investment Bank remains engaged, US funds are indefinitely frozen.

Funding Challenges for the Lobito corridor railway project

Lobito Atlantic Railway continues improving track conditions despite financial uncertainties. Progress remains steady, though future US involvement is unclear. The group overseeing the project remains confident about its implementation and operations.

The Trump administration’s stance on critical minerals remains unpredictable, raising concerns about long-term US engagement. Thomas Scurfield, an expert in Africa’s resource economy, highlights China’s dominant role in the region. The Gulf states have also increased investments in mining.

“If the US withdraws from supporting Africa’s resource ambitions, nations may prefer China’s more reliable financial backing,” Scurfield explained. China’s financial influence and well-established supply chains give it a competitive advantage.

US Shifts Strategy for Development Finance in Critical Minerals

Trump’s advisers have explored shifting USAID’s financial oversight to DFC, reducing humanitarian aid while increasing private-sector investments in mining. The administration nominated Ben Black, son of Apollo Global Management’s Leon Black, to lead DFC.

DFC remains committed to development initiatives aligned with Trump’s national security goals. However, officials declined to disclose pending project details due to confidentiality concerns. This shift in funding strategy could reshape US-African economic relations.

Competing for Africa’s Mineral Supply Chains

Established during Trump’s first term, DFC aimed to counter China’s influence in Africa. China’s infrastructure loans granted it unmatched leverage across the Global South. The US Export-Import Bank and DFC have since invested in energy and mineral extraction projects.

Last year, DFC approved a $553 million loan for the Lobito corridor, linking Congo and Zambia’s mines to Angola’s port. The project, led by commodities trader Trafigura Group, remains a strategic priority for US-African relations.

Former President Joe Biden supported the initiative, visiting Lobito port during his presidency. The first DFC disbursement is expected by March, ensuring continued progress.

US Must Maintain Engagement in Africa’s Mineral Sector

Zambia’s Transport Minister Frank Tayali emphasized the importance of US-African partnerships. Historically, Zambia collaborated more with Eastern economies but now sees potential in US investments.

“For years, Zambia leaned toward the East,” Tayali said at a conference. “The US must remain engaged to avoid creating opportunities for competitors.”

With growing interest from China and Gulf states, the US must carefully navigate shifting alliances. The Lobito project represents a key test of US influence in Africa’s critical minerals sector.