Congo billionaire seeks French loan to develop iron-ore railway

Image courtesy of SAPRO

(Bloomberg) — Paul Obambi, a billionaire investor in the Congo Republic, is in talks with French lenders to fund a railway he’s building to export iron ore.

Obambi’s company SAPRO SA is negotiating with “a consortium of banks” to finance the 450-kilometer (280-mile) track that will link the southwestern town of Mayoko to a port at Pointe Noire, he said in a phone interview from Paris on Tuesday. Construction is expected to start next year and be completed by 2022, he said, without saying how much it would cost.

SAPRO operates an iron-ore project at Mayoko acquired from Pretoria, South Africa-based Exxaro Resources Ltd. in 2016. Exxaro sold the enterprise after failing to secure port and rail agreements with the Congolese government, booking a 5.76 billion-rand ($460 million) writedown in the process.

Obambi, one of Congo’s wealthiest individuals, says he’s worth about $1 billion.

Since buying Exxaro’s operations for $350 million, SAPRO has invested $550 million in Mayoko, which produced 3 million metric tons of iron ore last year, Obambi said. Exports of the steel-making ingredient helped SAPRO generate a $1.5 million profit last year from output at Mayoko, he said.

“We expect to reach 5 million tons at the end of this year,” he said. Expansion plans at Mayoko are expected to raise production to as much as 150 million tons, with exports being shipped through Pointe Noire and a port at Owendo in neighboring Gabon, Obambi said.

Boosting output to that amount would place Congo among the world’s top iron-ore producers. Australia, the world’s largest, mined 880 million tons in 2017, while fifth-biggest producer Russia’s output was 100 million tons, according to estimates published by the U.S. Geological Survey. In 2013, Exxaro expected to reach production of 10 million tons at Mayoko by 2019.

Sapro has operations in 11 countries in Africa, Europe and Asia, with interests in oil and mining, consumer goods and media, according to its website.

(Written by Elie Smith)