Zimbabwe Railways Opens Up to Private Sector for Rebirth

Zimbabwe's state-owned railway operator has opened its network to private players to rejuvenate its freight volumes. Decades of underinvestment drastically reduced cargo capacity. Chinese firms and South Africa's Grindrod are stepping in, driven by rising mineral outputs like chrome and lithium, to restore the rail infrastructure.

Zimbabwe's state-owned railway operator has opened its network to private players, including a unit of South Africa's Grindrod, in an effort to boost freight volumes that had collapsed due to decades of underinvestment, according to an official.

In its 1990s peak, the National Railways of Zimbabwe managed to haul 12 million tons of cargo annually, but now manages less than 3 million tons due to a lack of locomotives and poor infrastructure maintenance. This collapse was also exacerbated by a sharp decline in agricultural and mineral output following the violent seizure of white-owned farms in 2000 under former leader Robert Mugabe. Lately, mineral output, particularly chrome and lithium, is rebounding due to demand from China.

Chinese companies like Tsingshan Holdings, Sinosteel, Sinomine, Zhejiang Huayou Cobalt, and Chengxin Lithium have launched iron ore, steel, chrome, and lithium operations in Zimbabwe, exporting minerals through Mozambique's ports. These expanding commodity exports exceed NRZ's current capacity, leading the state-owned group to seek support from private companies.

According to NRZ spokesperson Andrew Kunambura, the railway uplifted 2.8 million tons last year against available business of 3 million tons. Private companies are now coming in with their locomotives and wagons to augment the network.

Grindrod, via its Zimbabwean subsidiary Beitbridge Bulawayo Railway, has deployed three locomotives and 150 wagons since March to support the arrangement. As state-owned operators in the mineral-rich region open up their networks to private investors, South African logistics company Grindrod is positioning for new freight rail partnerships in southern Africa.

The region holds significant copper and lithium deposits crucial for clean energy projects, prompting new mining projects requiring expanded rail capacity. Grindrod CEO Xolani Mbambo stated that the company is restructuring its rail business to leverage emerging market opportunities and has recently formed a partnership with the DRC's inland railway company. Grindrod is also prepared to partner with South Africa's Transnet, which similarly plans to involve private players in its network.

(With inputs from agencies.)