Friday, February 29, 2008

'Lumwana, Kansanshi mines reluctant to sign railway off-take agreement

'Lumwana, Kansanshi mines reluctant to sign railway off-take agreement
By Namakau Nalumango
Friday February 29, 2008 [03:00]

NORTH Western Rail line (NWR) has said reluctance by Kansanshi and Lumwana mines to commit themselves to using the railway line may delay financing of the project. NWR chairman Enoch Kavindele said in an interview that the reluctance by the two mining companies in the province to sign the off-take agreement committing themselves to the use of the railway line might delay the release of funds by financiers.

Kavindele said the off-take agreement was a pre-condition for the financiers to release the funds for the project which is expected to be completed in 2010.

“Surprisingly, both Lumwana and Kansanshi mines are dragging their feet and are reluctant to sign the off-take agreements committing to the use of the railway in 2010,” Kavindele said.

Kavindele noted that in any project financing structure, the financiers wanted to know the anchor clients and although other mines were expected to open in the North Western Province, Lumwana and Kansanshi were the existing mines hence the need for them to sign up immediately.

He said the mines were so far taking a casual approach to the damage caused to the roads.

“As it stands, the repair and rehabilitation costs are borne entirely by the government and cease to be their problem. In the next three years, both Kitwe to Chingola road and the Kitwe to Lumwana road will be completely damaged,” he said. “All this heavy traffic combined with all other road users will place an extraordinary strain on all services, utilities and infrastructure.”

Kavindele said it was urgent therefore that the mines signed the agreements so that the construction of the rail line could take off.
He said the combined Democratic Republic of Congo (DRC) and Zambian mines related freight volumes in 2010 would be 2,400 000 tonnes of copper ore per annum.

“In Chingola, this will translate to having a truck on the roads every three minutes to and from. Roads in the town will become completely congested with the route between Chingola and Kitwe becoming almost impassable not to mention the hazardous conditions that will be faced by normal motorists and pedestrians,” he said.

He also said US $2 million had been budgeted for people who might be displaced as a result of the project.

Kavindele also announced a new Board of Directors for NWR that includes Dr Ludwig Sondashi, chief Mumena, Dr Bwalya N’gandu, and Joe Chisanga.

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