Senegal in talks on rail investment to support iron ore mining
A rail overhaul would speed up disbribution of goods in Senegal. Here, trucks loaded with bags of rice are stuck in Dakar on April 30, 2020. REUTERS/Zohra Bensemra
By David Whitehouse
Senegal is in talks with an unnamed partner aimed at securing investment in rail transport to support iron ore mining, Ousmane Cissé, head of Société des Mines du Sénégal (SOMISEN), tells The Africa Report.
The talks with the ministry of infrastructure are aimed at agreeing a public-private partnership, Cissé says from Dakar. Senegal wants to repair and extend the dilapidated railway line from Dakar to Bamako in Mali to connect with Tambacounda in eastern Senegal. This would connect to iron ore reserves in the region, Cissé says.
An overhaul of the colonial-era railway from Dakar to Bamako has been promised by successive Senegalese governments since its privatisation in 2003, yet lack of investment meant that traffic on the line ground to a halt in 2018. Senegal’s President Macky Sall in January 2020 promised that the line would be modernised but without saying where the money was coming from.
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The development of Senegal’s iron ore, phosphate and gold reserves has been hampered by the fact that many resources are “enclaved” in remote areas where there is a lack of infrastructure, Cissé says. “Infrastructure investments are being given priority.”
Expansion of the rail network would help boost Senegal’s economy. According to a World Bank note on the Dakar-Bamako corridor project in 2019, Senegal is paying a high price for relying on road transport.
Truck traffic in Dakar had reached “unsustainable levels”, worsened by the location of the port, which is fully enclosed by the city, the bank said.
Reliance on roads in Senegal means “dilapidated and overloaded trucks becoming the source of congestion, excess pollution, traffic accidents and significant road maintenance costs,” the bank wrote.
The main factor in the slowness in which goods are moved around within Senegal is the time spent at Dakar port, which averages 13 days, according to the bank.
The extension of the railway to Tambacounda would “transform the mining sector” and would take two or three years to complete, Cissé says. Road and rail options to transport marble mined in Senegal are currently lacking, while a better rail network would stimulate agricultural production, says Cissé.
Senegal has rich deposits of phosphate, iron ore, mineral sands, gold and uranium. Yet, according to the Extractive Industries Transparency Initiative, extractive industries account for less 6% of government revenue.
- The Falémé site in the south-east of the country holds an estimated 750m tonnes of iron ore reserves.
- A previous attempt by ArcelorMittal to develop the iron ore under an agreement signed in 2007 ended in failure, with Arcelor paying $150m to settle a dispute with the state after iron prices slumped.
The government created state-owned SOMISEN in 2020, and Cissé started as CEO in December.
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SOMISEN will ensure a greater role for the state in the mining sector and will have board representation for each project, Cissé says.
- The company is looking for private mining partners and is ready to take part in all stages of the production process from research and development to operations, Cissé says.
- The state automatically holds a free stake of 10% in all mining projects and can negotiate to purchase up to a further 25%, he adds.
Better rail infrastructure would lift not just mining but also Senegal’s whole economy.