Every single mining company in Zambia would opt to use rail transport if it made good business sense, but the available infrastructure defeats logic, says the Zambia Chamber of Mines.
And Zambia Chamber of Mines (ZCM) president Nathan Chishimba says his organisation is offering to help government and Zambia Railways Limited in making the regulation a success.
In a statement yesterday, Chishimba noted that although the Statutory Instrument to transfer 30 per cent of all cargo to rail transport was well intended, it was ill conceived.
“We strongly support any initiative that will deliver world class rail infrastructure to Zambia, but you cannot legislate for the success and sustainability of a railway enterprise. The fundamentals have to be right, and in this case they take no account of the complexity of the logistics chains that we, the customers have. One has to remember that Zambia is a land-locked country, and that our routes to port often go through multiple countries. We are therefore extremely sensitive to any disruptions, or additional transport costs. One thing that the mining industry is exceptionally good at is conceiving and executing big, capital intensive projects. So, I call upon government and Zambia Railways, let us help you make a success of this. It is in all of our interests to do so,” Chishimba stated.
Chishimba said every single mining company in Zambia would use rail logistics if it made good business sense to do so.
“The very first question to ask is ‘why are the companies currently not using rail?’ Unfortunately, that has never been asked by those who conceived these regulations, and all the problems flow from there. The SI is a blunt instrument and it pointed out just a few of its deficiencies. The transshipment and warehousing of copper is strictly governed by companies’ insurers and banks; companies will be unable to comply without their support. But as yet, no efforts have been made to reassure insurers of ZRL’s capacity, arrangements for additional warehousing at railheads, and the security of cargo in the event of derailments,” he stated.
Chishimba also noted that the current rail services were inefficient, as the rail journey could be just a matter of 60 kilometers and double handling presented additional risks of theft and the separation of cargo.
“No independent assessments of ZRL’s capacity had been undertaken, and no due diligence or risk assessment reports had been received from ZRL on matters such as rail line and cargo security measures. As regards North Western Province specifically, given that there are no rail links in the Province, the majority of its copper will have to be road hauled and then railfreighed from Chingola,” stated Chishimba.
“This is grossly inefficient in some cases the rail journey could be just a matter of 60 kilometers and double handling presented additional risks of theft, and the separation of cargo. A substantial amount of copper from North Western Province is transported to Walvis Bay in Namibia, where there are at present no rail links. It was unclear whether this copper would be exempted from the regulations,” stated Chishimba.