Transport demand (WTCR presentation)

Page 1

Agriculture in Malawi • Contributes over 35% to national GDP, • Employs over 80% of the labor force • Contributes over 80% of the export earnings

REPUBLIC OF MALAWI Ministry of Transport and Public Infrastructure

Safege Consultants for the European Union and the World Bank Ministry of Transport and Infrastructure

Malawi Transport Sector Multimodal Development and Potential PPP Study 1 : Commodities transport demand

Workshop in Lilongwe, 29th of July 2010, Capital Hotel Lilongwe 8/6/2010

1

8/6/2010

2

PRODUCT : TOBACCO SPECIAL CONDITIONS : PERISHABLE

About Tobacco

LOCAL PRICE

$1.75/kg

NATIONAL PART

RECENT PRODUCTION

• Most valuable production in Malawi (230 000 tons in 2009, 2/3 of exports in value) • actual logistics

INTERNATIONAL PRICE PACKING MODE :

M ODE

ROUTES

Road & Sea

BEIRA

Containerised

DURBAN

232 140 TONS WEIGHT

%

DESTINATION

70%

Central Region

69641,30

30%

Kasungu,Dowa Poland

GROUPING PT

TIME (days)

Germany Beira Route

Auction floors

35 US$79/t/k m

50 US$79/t/k m US$107/t/k m

The Netherlands Durban Route

35 US$120/t/km US$72/t/k m 35 US$120/t/km US$72/t/k m

Spain

45 US$120/t/km US$80/t/k m

Egypt

30 US$120/t/km US$75/t/k m 25 US$120/t/km US$70/t/k m

Austria

30 US$120/t/km US$75/t/k m

Liwonde

Factories (Processing) Lilongwe or Limbe Fumigation containerization

INTERNATIONAL PART

US$70/t/k m US$85/t/k m

The USA Belgium

Southern Region Turk ey

Lilongwe (50%) Limbe Mzuzu

Sea freight Sea freight

35 US$79/t/km

Dedza

Mangochi

Secondary auction floors Warehousing of wet Tobacco in railway stations Intermediate buyers to collect, group and sell

$/T/Km

Road to fob Road to fob

Mchinji

Mzimba

Satellite depot

COST $/TON

Lilongwe,

Rumphi,

Collection of bales

279 TONS

EXPECTED PRODUCTION 2020 ORIGIN

162498,70

Northern Region Russia

Fertilizers Green leaves

$

BALES

40 US$120/t/km US$120/t/k m

PACKING MODE

CONTAINERS 40' high cube containers

232 140 TONS

RECENT EXPORTS M ODE

CORRIDOR WEIGHT

Road & Sea

BEIRA

Containerised

DURBAN

%

DESTINATION

GROUPING PT

Germany

Beira Route

162498,70

70%

Central Region

69641,30

30%

Kasungu,Dowa Poland

Break Bulk to Joburg Where it is fumigated and sealed in containers for Durban

279 TONS

EXPECTED EXPORTS 2020 ORIGIN

Lilongwe,

The USA

Dedza

Belgium

Mchinji

TIME (days)

COST $/TON

$/T/Km

Road to fob

Sea freight

35 US$79/t/km

US$70/t/k m

35 US$79/t/k m

US$85/t/k m

50 US$79/t/k m US$107/t/k m Durban Route

35 US$120/t/km US$72/t/k m

The Netherlands

35 US$120/t/km US$72/t/k m

Northern Region Russia

45 US$120/t/km US$80/t/k m

Rumphi,

Spain

30 US$120/t/km US$75/t/k m

Mzimba

Egypt

25 US$120/t/km US$70/t/k m

Southern Region Turk ey Mangochi

30 US$120/t/km US$75/t/k m

Austria

40 US$120/t/km US$120/t/k m

Liwonde

NOTES:

Export (June to november)

8/6/2010

Nacala Beira

Durban 3

Dar Es Salam

Tobacco exports in 2009 232 000 tons

Mtwara

Criteria for exports

Rumpi Mzimba

Kanona

4

Processing and packaging

Conditions At Port

Time of arrival

Pricing of land leg

Long Term contracts

Current Choice of corridor

Tobacco (1st Logistic Chain)

Green leaves in Bulk Fumigation at Joburg then sent to Durban

Very important

Less that sea leg

X

Road to Joburg

Tobacco (2nd logistic Chain)

Fumigation at the factory Limbe or Lilongwe In 1000 kg sacs then containerised

Good storage and handling facilities Idem

X

Road to Beira Nacala rail corridor

Exports Chipata

Nacala Moatize Tete Chiwawa Nsanje Port Liwonde Mangochi

Malawi is 60% dependent on tobacco exports for its non aid foreign earnings. The expected growth rate for 2020 is not that great due to Anti Smoking lobby in Western markets. Malawi has diversified into other major cash crops such as Sugar,Tea,Cotton, Coffe and pulses The discovery of Uranium in Karonga at Kayerekera will also boost the economy. Mining already in progress and exports comenced in December 2009

Criteria of choice of an export transport chain for Tobacco

Mbeya

Luzaka

8/6/2010

Harare 162,000n ton (70%)s

Chinde

Very important

Beira 69,641 tons(30%)

8/6/2010

Joburg

Durban

Germany, Poland, USA, Belgium, Russiia, Spain, Egypt, Turkey

Conditions of a possible transfer to Nacala’s corridor (in 2015)

Germany, Poland, USA, Belgium, Russiia, Spain, Egypt, Turkey

5

8/6/2010

Railway in good conditions between Lilongwe and Nkaya

Use of railway from Auction Floor to factories

Use of Nacala Rail Corridor

6


Dar Es Salam

Tobacco exports in 2020 279 000 tons : Possible scheme

About Tea and coffee

Mbeya

Mtwara Rumpi Mzimba

Kanona

Nacala

Chipata

2nd major cash earner for Malawi, after tobacco and registered tremendouth growth Good production necessitates good rains Very small volume (52600 tons in 2009 and expected 60000 tons in 2010) Localized in Tylolo and Mulanje area (East of Blantyre) and around Nkata Bay Actual logistics

• • • • •

(70%)

Moatize

Luzaka

Tete

Germany, Poland, USA, Belgium, Russiia, Spain, Egypt, Turkey

Chiwawa

Harare

Liwonde Mangochi

Conditions

Joburg

8/6/2010

Use of Nacala Rail Corridor

Beira

(30%)

Use of railway from Auction Floor to factories

Railway in good conditions between Lilongwe and Nkaya

Durban

Germany, Poland, USA, Belgium, Russiia, Spain, Egypt, Turkey

7

PRODUCT : TEA

$

INTERNATIONAL PRICE

NATIONAL PART

PACKING MODE :

Containerised packed in paper sacks EXPECTED PRODUCTION 2020

52 559 TONS

RECENT PRODUCTION MODE

ROUTES

WEIGHT

%

ORIGIN

Road

Mulanje Tholo to Blantye

Tylolo, Mulanje

Road

Nkhata Bay

Northern Region

to Blantye

Nkhata Bay

Criteria for exports/imports

Processing and packaging

Conditions At Port

Time of arrival

Pricing of land leg

Long Term contracts

Choice of the corridor

Tea

Packed in paper sacks then containerized

Good storage

Very sensitive

Not important

?

Not transfer to rail to be expected

8/6/2010

8

Tea Exports 52559 tons in 2009

SPECIAL CONDITIONS : SUBJECT TO INFECTION

LOCAL PRICE

DESTINATIONGROUPING PTTIME (days)

5255 tons (10%)

Mbeya

68 330 TONS

Mtwara

COST $/TON$/T/Km

Nkhata Bay Kanona Chipata

Nkahta Bay PACKING MODE

Rail

Nacala

Road

Beira

Road

Durban

Road Road

Johannesburg Beira Mombasa

WEIGHT

Nacala

CONTAINERS

52 559 TONS

RECENT EXPORTS CORRIDOR

Dar Es Salam

Kenya

US$254.09/kg

Southern Region

INTERNATIONAL PART

MODE

70% Durban (fumigation in Joburg) 10% Mombasa 10% Johannesbourg (regional market)

Treatment in Blantyre Processing and packing in paper sacks

Leaves collection Chinde

??

Blantyre plant

Trucks

Nsanje Port

EXPECTED EXPORTS 2020

%

ORIGIN

DESTINATIONGROUPING PTTIME (days)

Moatize

Luzaka

68 330 TONS

Tete

COST $/TON$/T/Km

Tyolo

Transit Time Road freight to ports Sea freight to destination 0%

Nsanje Port

US$36

5255,9

10%

70% The Uk

36791,3

70%

5255,9

10%

South Africa Holland

5255,9

10%

Kenya

US$79

30% South Asia 54% The Uk 46% USA

Harare US$75.4

5255 tons (10%)

US$79

US$98

US$126.9

US$75.4

US$79

US$107

US$93 US$79

0 US$72

Tyolo

Mulanje

Chinde 36,791 tons (70%)

Beira

US$160.7

36,791 tons (70%) UK (70%), South-Asia, Holland NOTES:

8/6/2010

Tea is the second major cash earner for Malawi to tobacco and has registered tremendous growth. 70% of tea goes via Durban port, 10% via Mombasa port ,10% via Beira and 10% is sold to Johannesburg in Republic of South Africa. Major buyers of tea in order of merit as per 2008 statistics are as follows: UK, RSA,Kenya,USA,Pakistan,Holland, Botswana and Canada 2010 crop is projected at 60000 metric tonnes due to good rains. The Chperoni rains will have an impact as well.

Joburg 9

8/6/2010

South Africa

Luchenza warehouses Road with escarpment

Railway from Chiromo To Luchenza, Limbe, Nacala

Transport by dedicated lorries of raw cane . 6 km from the mill: MK 450 per ton . 40 km from the mill : MK 1000

Nchalo Sugar factory and estate Local Markets : Central and Northern Regions

Dwanga Sugar Mills

Nchalo Sugar Mills

Improvement : dedicated railway line to allow cheeper transport of raw cane Improvement : Replacement of the Chimoro bridge and rehabilitation of the railway between Limbe and Bangula

8/6/2010

Southern region Transportation problems For Sugar

Road to Bangula station

Exports : Zambia, Tanzania, Rwanda, RDC Chiromo bridge to rebuild

Trucks 16,8 to 20% of total cost

Nchalo (Chiwawa District

How to better capture possible improvements

Road to Beira

• One of the major production in Malawi in volume (350000 tons in 2009) corresponding to 3.5 million tons of sugar cane. • 2nd major export in volume (280 000 tons of sugar in 2009) • 3rd cash earner for Malawi • Actual and expected logistics

Nkhotakota (Central Province

10

UK (54%), South Asia (46%)

Rail to Nacala

About Sugar

Location of production

Durban

197 km

Luchenza Warehouse

954 km

Truck

Train

47 km

954 km

Nacala

Bangula warehouses

Bangula – Nsanje abandoned rail Dedicated railway line to allow a cheeper transport of raw cane

Train

Containers

Train

Nacala

11

8/6/2010 Distance between the railways Aprox. 50km

Nsanje linked by road only

Replacement of the Chimoro bridge and rehabilitation of the railway between Limbe 12 and Bangula


Road to the lake in a swamp

PRODUCT : SUGAR SPECIAL CONDITIONS : NONE

LOCAL PRICE

$

INTERNATIONAL PRICE PACKING MODE :

NATIONAL PART

Poor embankment, out of the estate

RECENT PRODUCTION MODE

ROUTES

Road

Poor lake service, no Ro-Ro

Dwanga Sugar factory and estate

Road

WEIGHT

%

ORIGIN

$

C0NTAINERISED packed in 1000kg bags EXPECTED PRODUCTION 2020

280000 TONS

DESTINATION GROUPINGTIME PT (days)

Nchalo in Chik wawa

Southern Region

to Blantye

Nchalo in Chik wawa

Dwangwa

Northern Region

to Blantye

Dwangwa in Nk hota k ota

TONS

364000 COST $/TON

$/T/Km

Railway to Nacala and LilongweZambia in Chipoka

INTERNATIONAL PART

PACKING MODE

RECENT EXPORTS

Northern region Transportation problems For Sugar

CONTAINERS

packed in 1000kg bags EXPECTED EXPORTS 2020

280000 TONS

MODE

CORRIDOR

WEIGHT

Rail

Nacala

140000 Mt

%

ORIGIN

DESTINATION GROUPINGTIME PT (days)

(South Mw) Dwangwa (C/Mw) Road

Beira

126000 Mt

45% Chik wawa (South Mw) Dwangwa (C/Mw)

Road

Other

14000 Mt

5% Chik wawa (South Mw) Dwangwa (C/Mw)

NOTES:

8/6/2010

13

Dar Es Salam

Sugar exports (actual)

$/T/Km

50% EU

35

US$36

US$80

40% USA

50

US$36

US$107

10% Far East

45

US$36

50% EU

35

US$79

US$80

40% USA

50

US$79

US$107

10% Far East

45

US$79

US$98

3% DR Congo

12

US$126.9

US$170

1% Egypt

30

US$79

US$70

2% local

1

US$79

US$107

US$98

Sugar is the THIRD major cash earner for Malawi and has registered tremendous growth. EU ans The US increased the quota for Malawi sugar as one way of promoting trade with the third word countries such as Malawi. This is an indirect way of providing aid to the developing countries. The quota and demand for Malawi sugar has increased substantially.

By 2010, we anticipate the sugar production figures to hit record 364000 metric tonnes. It is a furute growth area for the Malawi economy. 8/6/2010

Mbeya

Mtwara

Mtwara

Dwenga

Kanona

Dwenga

Kanona

Chipata

Chipata

Nacala Dwenga

Moatize

Luzaka

Nacala Dwanga

140000 t (50%)

Chiwawa

Moatize

Luzaka

Tete

364, 000 t (50%)

Tete Chiwawa

EU (50%), USA (40%) Far East (10%)

Nsanje Port

Harare

Conditions

126000 t (45%)

Chiwawa

Chinde

Chinde Replacement of Chiromo bridge railway rehabilitation between Bangula and Limbe

Chiwawa

Beira 12000 t (5%)

Joburg

EU (50%), USA (40%) Far East (10%)

Nsanje Port

Harare

8/6/2010

14

Dar Es Salam

Expected Sugar exports in 2012-2015 Use of Lake service and Nacala Corridor

Mbeya

TONS

364000 COST $/TON

Transit Time ( days) Road freight to ports Sea freight to destination 50% Chik wawa

Beira New containers boats or barges Lake service in use

EU (50%), USA (40%) Far East (10%)

Durban

15

Joburg

8/6/2010

Durban

16

PRODUCT : COTTON SPECIAL CONDITIONS : NONE

About Cotton and Garnments

LOCAL PRICE

• •

$

INTERNATIONAL PRICE

NATIONAL PART

RECENT PRODUCTION

• •

0.33/KG

Cotton is grown up in the same places than sugar (along the Shire River) and around Salima Cotton production may be extended through the green belt program and the development of Chikwawa Region Low density => the road transportation is competitive Major challenge due to a sharp fall of prices in 2008/2009 season (minimum price set up by GOM of 60 MKw/kg but traders were buying 25 MKw/kg

27 560

Far East (China) South East Asia

Treatment

Conditions At Port

Time of arrival

Pricing of land leg

Cotton

Bagged in hessian sacks of 120kg each

Good storage

Not sensitive

Important

8/6/2010

Long Term contracts

$/T/Km

Southern Region

to Blantye

Chik wawa & Balak a

%

DESTINATION

Balak a,Salima

Central Region

to Blantye

Salima & Ntcheu

RECENT EXPORTS MODE

CORRIDOR

Road

Beira

Road

Processing and packaging

GROUPING PT

Chik wawa

27 560 WEIGHT

COST $/TON

PACKING MODE

CONTAINERISED Bagged in hessian sacks of 120kg each 38 580 EXPECTED EXPORTS 2020

TONS

ORIGIN

GROUPING PT

Cost$/t/km

TONS %

TIME (days)

DESTINATION

TIME (days)

COST $/t/km

Transit Time

Cotton collection

Criteria for exports/imports

TONS

ORIGIN

TONS

ROUTES

Road

INTERNATIONAL PART

40% Beira 60% Durban ..% Johannesbourg)

Trucks

CONTAINERISED Bagged in hessian sacks of 120kg each EXPECTED PRODUCTION 2020 38 580

MODE

Road

WEIGHT

$

PACKING MODE :

Durban

11024 16536

40% 60% 0%

70% Far East ( China)

50

US$79

30% South Asia

45

US$79

US$98 US$92

54% Far East ( China)

50

US$126.9

US$98

46% South Asia

45

US$126.9

US$92

N/A

US$93

0

Road

Johannesburg

0% South Africa

NOTES:

Cotton is another key export commodity for Malawi.The crop has faced a major challenge recently due to sharp fall of prices in in 2008/09 season. The government set a minimum price of 60Mw Kwacha per kg BUT the traders were buying at 25 Mw kwacha per kg. This discouraged the farmers and coupled with dry spell the crop production for 2010/11 season has fallen by 50%. The World Bank and Cotton Development Trust have come in and planned to increase production for the future. Price at 50Mk/ kg for 2010/11 season equivalent to 30 US cents per kilogram.

Choice of the corridor Not an easy market for rail

17

8/6/2010

18


Cotton exports in 2020 Use of train to Nacala Or intermodal to Nsanje, Chinde, Beira ?

Dar Es Salam

Cotton exports in 2009 Use of Roads to Beira and Durban

Mbeya

Dar Es Salam Mbeya

Mtwara

Mtwara

Dwenga

Kanona

Dwenga

Kanona

Chipata

Chipata

Nacala Dwenga

Nacala

Moatize

Luzaka

Dwenga

Tete

Moatize

Luzaka

38,580 t (40%)

Tete

Chiwawa

Chiwawa

Nsanje Port

Harare 38,580 t (40%)

11,024 t (40%)

Chinde

Chiwawa

?

Nsanje Port

Harare

Far East (70%), South Asia (30%)

Chinde

Chiwawa

16,536 t (60%)

Beira

Beira

Far East (64%), South Asia (46%)

Joburg

8/6/2010

Durban 19

Far East (70%), South Asia (30%)

8/6/2010

About Maize • •

• • •

Joburg

Durban 20

About Maize Trends in domestic gaps

Second most important commodity produced by Malawi, in terms of tonnage and first in strategic importance (daily food of all Malawians) 3 to 3.5 million tons per year … with huge silos around Lilongwe and major cities (impossible human consumption : 365x 16000000x 2x 0,2 kg = 2.336 million tons per year …. Even babies in this hypotesis are eating their 0,2 kg portions 3 times per day !!) Malawi could be a major regional exporter (Eastern, East-Central Africa, Kenya, Zimbabwe) Road = unique transportation mode for bulk maize (traditional means) Road = unique transportation mode for processed maize

Possibilities Criteria for regional distribution

Processing and packaging

Points of processing

Time of arrival

Price of transport

Choice of the corridor

Within Malawi

In sacs , limited exports

Blantyre silos Eastwards and Southwards

Not very important

Very sensitive

Distribution around the lake to Northern cities and to Monkey Bay

Reginal exports

In sacs , limited exports

idem

Not very sensitive

Very sensitive

Use of railways (to Zambia, Tanzania, Mozambique, …)

8/6/2010

In February 2008, the price of maize had more than doubled from MWK21 per kg in the previous year (Feb 2007) to MWK43 per kg. From January 2008 to March 2008, the price had increased by 10%, with March representing the peak of the lean season. The maize harvest period which started in March in some parts of the country did not result in the weakening of the prices, as expected. As such, maize prices have kept on an upward trend, currently reaching over MWK60 per kg. The high volatility of prices between the harvest (March – June) and lean season (October – February) is typical of thin Maize markets. Farmers are compelled to engage in distress selling at low prices during the harvest period, only to buy back the maize during the lean season at much higher prices. Over 80% of the smallholder farmers end up being net food buyers.

21

Maize local distribution Use of the lake and railway distribution systems

8/6/2010

22

Dar Es Salam

About Cassava

Mbeya

Mtwara

Kanona Chipata

Nacala Moatize

Luzaka

Tete Chiwawa Nsanje Port

Harare Chinde

Push factors to grow cassava . 2002 drought . Withdraw of input subsidy, . Reduced urban purchasing power and dwindling farm sizes. Pull factors . Relative ease of cassava cultivation, . Utility of ‘sweet’ cassava as an uncooked snack food, . Lower price of the raw roots in urban markets compared to maize

Beira

8/6/2010

Joburg

Durban

23

8/6/2010

24


Alternative Supply Channels in Malawi’s Cassava Value Chain

Transportation of Cassava •

From the producing areas to the markets : Land rovers (especially in Lilongwe) and lorries (3, 7 to 10 tons) - return trips from original trips/places. A majority of the traders arrange their own transport. In some cases, especially for smaller markets, a number of wholesalers will hire one vehicle to transport their produce to a given market. Sacs (50 or 90 kg) or bulk in the vehicle. For areas within the vicinity (20-30 kilometers from the city), bicycles are used to transport cassava. These can transport cassava of up to a 50 kilograms bag.

• • • •

The total cassava production figure is based on the 2007 crop estimate from the Ministry of Agriculture of 3,194,994 tons. Out of the total 26,6% is sold of which 80% as fresh cassava

8/6/2010

25

Mbeya

Dar Es Salam

8/6/2010

26

RICE ALTERNATIVE CORRIDORS

Mbeya

Dar Es Salam

main production area

Chipata Salima

efficient lake services allow marketing

Chipoka

Salima

Chipata

Bangula

8/6/2010

Nacala

Bay

Bangula

Moatize Luzaka

Monkey

Chipoka

Nacala

Moatize

Tete

Luzaka

Chinde

Route for Cassava and sweet potatoe Beira

27

Lower Shire

Tete

Chinde

Beira

8/6/2010

28

IM P O R T S S T A TIS TI C S

About Fertilizers

P R O D U C T : F E R T I L I ZE R S S P E C IA L C O N D IT IO N S : N O N E

L O C A L P R IC E

$

50 k g b a g

IN T ER N A T I O N A L P A R T

IN TE R N A TIO N A L P R IC E

P A C K IN G M O D E

$

B A G S or C O N T A IN E R S

50 k il o g ra m b a g s

• • •

Importation of 369,000 tons of fertilizers in 2008, Essential to the development of Malawi’ s agricultural sector Most of fertilizer is imported as a finished product but some importers have blending plants Process and logistics Farmers World

Liwonde

Optichem (production side)

Blantyre

Yara

• •

Blending company

Regional depots

8/6/2010

M ODE

C O R R ID O R

R o ad & S e a

B E IR A

C o n t a in e r is e d

D a r e s s a la a m

36 90 00 TO N S W E IG H T

Tra n s p o rte d b / b u lk

%

D E S T IN A T IO N

36 90 00 TO N S

E X P E C T E D I M P O R T S 20 20 O R IG I N

G R O U P IN G P T

T IM E (d a y s )

Tra n s it T im e

C O S T $ /T O N

$ /T /K m

F o b B e ira/ LL

S e a f re igh t

29 52 00 ,0 0

80 %

T o L i lo n g w e

I n d ia / C h in a

F O B B e ira- L L

35

U S $ 9 2 / t/ k m

U S $ 80 /t/k m

7 38 00 ,0 0

20 %

T o B la n t y re

U A E & S a u d i / A ra b ia

F O B B e ira- B t

35

U S $8 5/t/ k m

U S $6 5t/k m

FO B Dar - LL

30

U S $ 12 0/t /k m

U S $6 5t/k m

Distribution From Liwonde

Blantyre and Lilongwe

From Blantyre and Lilongwe Traders and agents are selling fertilizers to farmers

Imports from South Africa (Joburg), through Beira, Dar Es Salaam (Farmers World) Improvements to reduce the cost of imports for the farmers : –

R EC E N T IM P O R TS

N A T IO N A L P A R T

P A C K IN G M O D E :

R EC E N T C O N S U M P T IO N

Buy fertilizers in bulk ...with bulk handling on railway as it is cheaper and bagging in Malawi is not expensive but time consuming Obtain a more balanced flow of goods (buffer stock in advance of the season and planning fertilizer subsidy program in advance to get better prices.

29

M ODE

R O U TE S

8/6/2010

BA GS

TO N S W E IG H T

%

E X P E C T E D C O N S U M P T I O N 2 02 0 O R IG I N

D E S T IN A T IO N

G R O U P IN G P T

T IM E (d a y s )

TO N S C O S T $ /T O N

$ /T /K m

30


Dar Es Salam

Imports of Fertilizers in 2009 Possibilities in the future (1) and (2)

Dar Es Salam Mbeya

73 800 tons (20%)

Mbeya

Mtwara

Mtwara necessary power from coal

Kanona Kanona Chipata

Chipata

Nacala Moatize

Luzaka

1

Tete

Salima Chipoka

Tete

Chiwawa

Bangula

Nsanje Port

Nsanje Port

Harare

Harare

Conditions 295200 tons (80%)

Nacala

Moatize

Luzaka

2 Chinde

Chinde

(1) Rehabilitation of the Nacala Corridor and links to Lilongwe

Beira

Beira (2) Barges on the Shire Zambezi river

8/6/2010

Joburg

Durban

31

Joburg Durban Route for Heavy Sands inputs and outputs

8/6/2010

32

The ceme nt production process

About Clinker • • • •

1) Limestone is taken from a quarry. It is the major ingredient needed for making cement. Smaller quantities of sand and clay are also needed. Limestone, sand and clay contain the four essential elements required to make cement. The four essential elements are calcium, s ilicon, aluminum and iron.

Portland previously mined limestone and manufactured Clinker at Changulume ; this clinker was ultimately transported by rail to a Cement factory in Blantyre (coal necessary) In 2009, importation of 202,000 tons from India/China through Beira (40%) and Nacala (60%) In the years to come, imports (Lafarge) from Zambia (50%) and Zimbabwe (50%) Cement industry highly dependant on the transport sector

2) Boulder-size limestone rocks are transported from the quarry to the cement plant and fed into a crusher which crushes the boulders into marble-size pieces.

How to produce Clinker

3) The limestone pieces then go thr ough a blender where they are added to the other raw materials in the right proportion.

Opportunities for Malawi • •

4) The raw materials are ground to a powder. This is sometimes done w ith rollers that crush the materials against a rotating platform.

Reducing the cost of imports including transport cost by producing cement (limestone + coal => Clinker main raw material for Cement) Develop an efficient North-South transportation system for heavy products, including Lake intermodal facilities and efficient railway

5) Everything then goes into a huge, extreme ly hot, rotating furnace to undergo a process called "sintering". Sintering means: to cause to become a coherent mass by heating without me lting. In other words, the raw materials become sort of partia lly molten. The raw materials reach about 2700° F (1480°C) ins ide the furnace. This causes chemical and physical changes to the raw materials and they come out of the furnace as large, glassy, hot cinders called "clinker".

8/6/2010

33

6) The clinker is cooled and ground into a fine gray powder. A small amount of gypsum is also added during the final gr inding. It is now the finished product - Portland cement. The cement is then stored in silos (large holding tanks) where it awaits distribution. The cement is usually shipped in bulk in purpose-made trucks, by rail or even by barge or ship. Some is bagged for those who want small quantities.

8/6/2010

34

Substitution of Sulfur Mochuchuma-Katewaka Coal Field N

About Mining

Keyelekera Uranium Mine Kanyika mobdium uranium mine

• Mining in Malawi (Uranium, Rare Earth, Heavy Sands, Bauxite) • Coal of Tete Region (Moatize Mine with Vale, Riverdale Mine) • Copper from Zambia

Mzuzu

Global Scheme

Sugar Salima and Chipoka Heavy minerals

Kasungu Limestone

Makanjira Ti N

Lilongwe

Coal from Moatize to Nacala m 70 k

Ni

Chimwazulu Mine Lake Chiwa

Kangankunde Hill monazite

120 km Electricity and coal

8/6/2010

35

Al Sugar

8/6/2010 Alumine to Cabora Basso

Mulanje 52 km

Nsanje Port (Molasses, fertilizers)

36


PRODUCT : URANIUM

Expected Uranium exports in 2020

SPECIAL CONDITIONS : SUBJECT TO INFECTION

LOCAL PRICE

$

INTERNATIONAL PRICE

NATIONAL PART

RECENT PRODUCTION M ODE

ROUTES

Road

Kayelek era

PACKING MODE :

CONTAINERISED (In Drums of 333kg's each) EXPECTED PRODUCTION 2020

10000/ yr

ORIGIN

DESTINATION GROUPING PT TIM E (days)

COST $/TON $/T/Km

500 TONS WEIGHT

%

in Karonga

10,000 t/year

TONS

Kayelkera

Kayelekera In Karonga

Mtwara

Karonga

Kanona

0%

M ODE

CORRIDOR

PACKING MODE

CONTAINERS

500 TONS WEIGHT

Walvis Bay in

Chipata

(In Drums of 333kg's each) EXPECTED EXPORTS 2020

%

ORIGIN

100% Kayelek era

NAMIBIA

10000/ yr

DESTINATION GROUPING PT TIM E (days)

Transit time Road

Mbeya

Nothern Rgn

INTERNATIONAL PART

RECENT EXPORTS

Dar Es Salam

By trucks to Walwis Bay (Containerised in drums of 333 kg’s each)

$

100% CANADA

Nacala

TONS

Moatize Tete

Luzaka

COST $/TON

Road freight to port Sea freight

50

US$1179/TON

Chiwawa

US$107

Nsanje Port

Karonga

Harare Chinde

Beira NOTES:

The discovery of Uranium at Kayelekera in Karonga, the Nothern part of Malawi, is a massive breakthrough in the economy of Malawi. The country is already earning over 300 million kwacha in loyalties. There is a lucrative market in Canada and the mine has got a life of aver 15 years. Paladin Africa have already exported 27x20' containers since the commissioning of the mine. More uranium has been discovered at Kanyika and Globe Metals are on Bankable Feasibility study stage and mining is expected to 8/6/2010 37 commence in 2012/13 season.

Mbeya

Dar Es Salam

Durban

Joburg

8/6/2010

38

Dar Es Salam

Expected Coal exports from Moatize mine in 2020

Mbeya

Moatize’s 2,440 million tonnes of estimated reserves Phase 1 : 2011-2015 . 12.7 million tonnes (mt) annually of hard coking coal for export; . 2.4mt/year of export thermal coal, . 2.5mt/year of thermal coal to supply a local power station should one be built. “We estimate the rehabilitated line will be able to transport between 6mt and 8mt of coal annually which is clearly not enough for our requirements and there are other potential coal producers in Kanona the Moatize region”.

Mtwara

Phase 2 : after 2015 . 21 million tonnes per annum, run-of-mine, whichChipata implies a 1,500 MW mine-mouth power plant

Chipata Salima

Riversdale expects to produce 20-million tons of Moatize coking coal from Mozambique by: 32016. 2015 up to 6 million tons

Luzaka

Chipoka

Nacala

Tete Chiwawa

Nacala

20 millions export capacity

Nsanje Port

Harare

chemicals 2015 :6 to 8 million tons

Bangula

Chinde

Beira

coal

Moatize Luzaka

Tete

Chinde

aluminum Beira 39 Route for Aluminium Ore inputs and outputs

8/6/2010

Expected Copper exports from Copper Belt in 2020

Dar Es Salam

Joburg

8/6/2010

Possibility : barging the coal 400km down the Zambezi from Tete to the coast, from where it would be barged out to sea and loaded on to vessels anchored offshore.

40

127, 000 t Cement 80,000 t Lime 28,000 t Fuel General Cargo

Mbeya

Actual traffic on corridors

Mbeya

(From Gopa Study) As basis for the Railway Master Plan, only safeguarded traffic potentials have been considered, in other words amounts of traffic that customers intend to transport. Accordingly, traffic on the Nacala Corridor will amount to 524,000 tonnes equivalent to 409 m tonnekilometres per annum. With the start-up of the extension to Chipata (Zambia) in 2012, these figures are expected to increase to 962,000 tonnes and 890 m tonne-kilometres, and further to 1.45 m tonnes and 1,445 m tonne-kilometres in 2016. Mtwara

Kanona

Durban

Dar Es Salam

Tobacco, 100,000 t Rice, Sugar, Tea, Beans and Metals

Chilumba

Mtwara

Chipata Chipata

Salima Lilongwe Chipoka

Nacala Moatize Tete

Luzaka

Liwonde Chiwawa

59,600 t Fertizers 9,6000 t Fuel

Nacala

140,000 t Sugar 15,000 t Food Crops

Nsanje Port

Blantyre

Harare Chinde

Moatize

Beira

Bangula

Tete

Chinde

Luzaka 89,400 t Fertizers 153,000 Fuel

8/6/2010

Joburg

Durban 41

8/6/2010

Durban 91,000 t exports

162,000 t tobacco 36,000 t Tea 11,000 t Cotton 126,000 t Sugar

Beira

42


IMMEDIATE NEEDS

Tea

Tobacco

Cotton

Sugar

Quantities 2009

52.56

232.63

27.56

280.00

295.33

Existing mode

Road

Road

Road

Road or Rail

Road+rail

Durban

Beira

Durban + Beira

Beira or Nacala

Tazara

Quantities 2009 Existing mode

Existing corridor Priorities for Transport Improvement and Investment

Quantities 2009 Existing mode Priorities for Transport Improvement and Investment

8/6/2010

Petrol

Paraffin

Diesel & other

General Petroleum

Fertilizer

107.80

14.80

157.40

280.00

141.61

2.00

Road

Road

Road

Road

Road

Train

Nuts

Existing corridor Priorities for Transport Improvement and Investment

Beira

Imported Coal

Tazara

Beira

Beira

Beira

Beira

77km in Mozambique

Ro-Ro service on the lake

lake Ro-Ro service on the lake

warehousing

lake service

Link with Moatize

rail link Limbe Chipoka- Lilongwe –Chipata

rail link Limbe ChipokaLilongwe Chipata

rail link Limbe ChipokaLilongwe Chipata

efficient rail services

efficient rail services

Services on the lake

Pig Iron

Alumina

Tete Bridge

efficient rail services

Chiromo Bridge

Chiromo Bridge

Lake service in Nkhata Bay

Border crossing

rail link Limbe - Lilongwe

Tete Bridge

Dwanga road to lake

MCC equipment in M'Beya

Border Crossing

Dwanga port + lake service

Border Crossing

Cassava

Potatoes

Sweet Potatoes

Maize

Rice

3913.00

758.00

2714.00

3201.68

106.11

383.00

None

none

none

road

road

Road+rail

Quantities 2009

38.00

21.00

0.00

0.00

0.00

0.00

Existing mode

Road

Road + train

Road

none

none

none

Tazara

western

Western and TAZARA

lake service

Tete bridge

Lake service Nkhata Bay rail link Limbe ChipokaLilongwe – Chipata Equipments to produce flour

Ro-Ro service

RoRo service

Pulses Lime

Cheaper road transport

Lake service Nkhata Bay

warehousing

Lake service

MCC equipment

rail link Limbe - ChipokaLilongwe Chipata

rail link Limbe ChipokaLilongwe Chipata

efficient rail services

efficient rail services

Ro-Ro service on the lake

Existing corridor

Priorities for Transport Improvement and Investment

43

Clinker

8/6/2010

Uranium

MCC equipment

Titanium ore

none

none

none

Energy

Energy

Rail link to Moatize

44


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