MACIG Connect Series
Bolloré is the leading logistical service provider in Africa. How important is the Katanga operation to the company as a whole? What level of involvement do you have with mining?
Eric Kalala (EK): Bolloré is the leading logistics provider for Africa. We operate in 45 countries across the continent and employ 25,000 people, making us Africa’s largest private sector employer. Our presence in Katanga dates back to 1953 when we started out shipping commodities out from the mines. Today, we have 280 people working for us throughout our provincial offices at Lubumbashi, Kolwezi, Kasumbalesa, Likasi, Tenke, Sakania and Mbuji-Mayi. We operate a 20,000-square meter bonded warehouse and free practice warehouses to store already cleared goods. Our newest facility at Kasumbalesa will be inaugurated in May. It is the first office that you see when you cross into the DRC from Zambia.
We are also in exclusive partnership with Korongo airlines to facilitate all of the mining industry’s airfreight needs. Our involvement with mining industry is extensive; we work with almost all of the major players here. We are the exclusive clearing agents for a major mining company in the province. This includes everything from the export of their finished products to the import of equipment and consumables. Aside from this, we have many Chinese clients and have a full-time Chinese liaison officer to facilitate our relationship with these customers.
Jeroen Braet (JB): Bolloré divides the DRC into three zones: Kinshasa, the east and Katanga. Although it is still the same company, these three areas represent very different core businesses for us and each handles its own operations. In Katanga, we work with four different corridors: Dar Es Salaam, Beira, Durban, Walvis Bay. We will soon be opening up the western corridor through Benguela to Angola’s Lobito port. However, from an administrative point of view, we organize all traffic from our central Lubumbashi office.
There seems to be a preference among the major mines to use the port of Durban for exports. What are the reasons behind this trend?
EK: All the corridors that we work with are in constant competition and have their own advantages and disadvantages. At the moment, Dar Es Salaam is probably the cheapest option but Durban is more efficient. The majority of traffic is still routed through South Africa, but the recent upgrade at Dar Es Salaam has improved the quality and Tanzania is starting to catch up. A few years ago, it was common for vessels to wait two weeks to berth, but now the average wait is just three days.
DRC routinely ranks at the bottom of global infrastructure indexes. Have there been any real gains in transport infrastructure quality in recent years?
JB: Over the past 10 years, infrastructure in the DRC has improved dramatically. In the rainy season it was sometimes impossible to make the road journey between Lubumbashi and Kolwezi. Now there is a well-maintained asphalt road between the two cities, which has made our job much easier. These improvements have made it much easier for foreign transporters to work in the country, which has reduced transit times and brought down shipping rates.
Even with the improvements in local infrastructure we still hear stories of trucks taking several weeks to arrive from South Africa. Where do most of these delays occur?
EK: Bottlenecks at border crossings are very common, particularly at Kasumbalesa. Last year we worked on a commission with the government to identify the underlying problems and propose solutions to fix them. The first improvement that we made was to keep the border open 24 hours a day. Because this concerns Zambia as well as the DRC, we must now wait for the measure to be approved by the Zambian parliament. The political will to improve the situation is strong on both sides of the border but it will take some time to be approved through the official channels. The second proposal was to build a new road and a second border crossing, which would be used exclusively for outbound traffic. Kasumbalesa would be reserved for incoming trucks.
JB: A huge number of empty trucks leave the DRC every day, slowing down the rest of the traffic that is carrying cargo. In the case of congestion, there is a system whereby all the empty trucks are fast-tracked over the border in the morning, freeing up time to process the laden vehicles.
Recent increases in copper production have put a strain on the transport network. Will we see production continue to increase at its current rate?
EK: Copper production will probably not increase as rapidly in 2015 and 2016 as it has done in previous years. Because of the energy problems, several mines are running below full capacity. They have the potential for much higher production rates but until the power supply improves they are unable to capitalize on this. There are projects in the pipeline that will help alleviate the situation. Prefeasibility studies are being conducted in order to construct a hydroelectric dam on the Luapula River and a thermal power plant at Luena. These will serve as a precursor to the Grand Inga damn. Once this project comes online it will generate enough energy to power the entire country.
What role do you see the rail network playing in the future?
EK: We have been involved in high-level talks with government officials, the World Bank and the SNCC to consider the future of the railway. There is the possibility of running the stretch between Kolwezi and Lu-bumbashi as a private concession, which would allow the mines to invest in the running of the network. Production volumes will increase dramatically in the next five to 10 years, and the roads will not be able to handle all the traffic. The country must invest in improving both the road and rail networks.
Given the increasingly competitive nature of logistics in the DRC, how does Bolloré stand out from the crowd?
EK: We are a local Congolese company; Bolloré has been in the DRC for more than 60 years. This has allowed us to build up an unparalleled level of local knowledge and a strong set of core competencies on the ground. Looking at Africa as a whole, we have a very strong network across 45 different countries. We also have comprehensive representation outside of Africa and a close partnership with CMA CGM shipping, ensuring that we can import or export cargo to and from anywhere in the world.
Bolloré is committed to developing local human capital, which helps to improve our own service as well as the level of the skills base in the country. The DRC has always been seen as a country with great potential but now we are creating the conditions that will make this potential a reality.
This interview was part of research being conducted by GBR for its upcoming Mining in Africa Country Investment Guide (MACIG) 2016. To participate in this report, please contact Molly Concannon at email@example.com or +243(0)826300684.