transport demand (wtcr presentation)

1 : Commodities transport demand

Workshop in Lilongwe,

29th of July 2010, Capital Hotel Lilongwe

Malawi Transport Sector Multimodal Development and Potential PPP Study

8/6/2010 1

REPUBLIC OF MALAWI

Ministry of Transport and

Public Infrastructure

SafegeConsultants for the European Union and the World Ba nkMinistry of Transport and Infrastructure

Agriculture in Malawi

• Contributes over 35% to national GDP,

• Employs over 80% of the labor force

• Contributes over 80% of the export earnings

8/6/2010 2

About Tobacco

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

• actual logistics

Fertilizers Green

leaves

Collection

of bales

Auction floors

Lilongwe (50%)

Limbe

Mzuzu

Satellite depot

Secondary auction floors

Warehousing of wet

Tobacco in railway stations

Intermediate buyers to

collect, group and sell

Factories (Processing)

Lilongwe or LimbeFumigationcontainerization

Break Bulk to JoburgWhere it is fumigatedand sealed in containers for Durban

Nacala

Beira

DurbanExport

(June to november)8/6/2010 3

$1.75/kg $

PACKING MODE : BALES

232 140 TONS 279 TONS

MODE ROUTES WEIGHT % ORIGIN DESTINATION GROUPING PT TIME (days) COST $/TON $/T/Km

Road to fob Sea freight

Road & Sea BEIRA 162498,70 70% Central Region Germany Road to fob Sea freight

Containerised DURBAN 69641,30 30% Kasungu,Dowa Poland Beira Route 35 US$79/t/km US$70/t/km

Lilongwe, The USA 35 US$79/t/km US$85/t/km

Dedza Belgium 50 US$79/t/km US$107/t/km

Mchinji The Netherlands Durban Route 35 US$120/t/km US$72/t/km

Northern Region Russia 35 US$120/t/km US$72/t/km

Rumphi, Spain 45 US$120/t/km US$80/t/km

Mzimba Egypt 30 US$120/t/km US$75/t/km

Southern Region Turkey 25 US$120/t/km US$70/t/km

Mangochi Austria 30 US$120/t/km US$75/t/km

Liwonde 40 US$120/t/km US$120/t/km

PACKING MODE CONTAINERS

40' high cube containers

232 140 TONS 279 TONS

MODE CORRIDOR WEIGHT % ORIGIN DESTINATION GROUPING PT TIME (days) COST $/TON $/T/Km

Road to fob Sea freight

Road & Sea BEIRA 162498,70 70% Central Region Germany Beira Route 35 US$79/t/km US$70/t/km

Containerised DURBAN 69641,30 30% Kasungu,Dowa Poland 35 US$79/t/km US$85/t/km

Lilongwe, The USA 50 US$79/t/km US$107/t/km

Dedza Belgium Durban Route 35 US$120/t/km US$72/t/km

Mchinji The Netherlands 35 US$120/t/km US$72/t/km

Northern Region Russia 45 US$120/t/km US$80/t/km

Rumphi, Spain 30 US$120/t/km US$75/t/km

Mzimba Egypt 25 US$120/t/km US$70/t/km

Southern Region Turkey 30 US$120/t/km US$75/t/km

Mangochi Austria 40 US$120/t/km US$120/t/km

Liwonde

NOTES: 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

INTERNATIONAL PART

RECENT EXPORTS EXPECTED EXPORTS 2020

PRODUCT : TOBACCO

SPECIAL CONDITIONS : PERISHABLE

LOCAL PRICE INTERNATIONAL PRICE

NATIONAL PART

RECENT PRODUCTION EXPECTED PRODUCTION 2020

8/6/2010 4

Nacala

Chipata

Dar Es Salam

Mbeya

Chiwawa

Beira

MoatizeLuzaka

Chinde

Tete

Mtwara

HarareNsanje Port

DurbanJoburg

Kanona

162,000n ton (70%)s

Germany, Poland, USA, Belgium,

Russiia, Spain, Egypt, Turkey

Tobacco exports in 2009

232 000 tons

69,641 tons(30%)

Liwonde

Mangochi

Rumpi

Mzimba



8/6/2010 5

Criteria of choice of an export transport chain

for Tobacco

Criteria for

exports

Processing and

packaging

Conditions

At Port

Time of

arrival

Pricing

of land

leg

Long

Term

contracts

Current Choice

of corridor

Exports

Tobacco

(1st Logistic

Chain)

Green leaves in Bulk

Fumigation at Joburg

then sent to Durban

Good

storage

and

handling

facilities

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

Idem Very

important

X Road to Beira

Nacala rail

corridor

Use of Nacala Rail

Corridor

Use of railway from

Auction Floor to factories

Conditions of a

possible transfer to

Nacala’s corridor

(in 2015)

Railway in good conditions

between Lilongwe and Nkaya

8/6/2010 6

NacalaChipata

Dar Es Salam

Mbeya

Chiwawa

Beira

MoatizeLuzaka

Chinde

Tete

Mtwara

HarareNsanje Port

DurbanJoburg

Kanona

(70%)



Tobacco exports in 2020

279 000 tons : Possible scheme

Liwonde

Mangochi

Rumpi

Mzimba



(30%)

?? Use of Nacala Rail

Corridor

Use of railway from

Auction Floor to factories

Railway in good conditions

between Lilongwe and Nkaya

Conditions

8/6/2010 7

About Tea and coffee• 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

Leaves collection Treatment in Blantyre

Processing and packing

in paper sacks

Trucks

Blantyre

plant70% Durban (fumigation in Joburg)

10% Mombasa

10% Johannesbourg (regional market)

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

$ US$254.09/kg

PACKING MODE : Containerised

packed in paper sacks

52 559 TONS 68 330 TONS

MODE ROUTES WEIGHT % ORIGIN DESTINATIONGROUPING PTTIME (days) COST $/TON$/T/Km

Road Mulanje Tholo Southern Region

to Blantye Tylolo, Mulanje

Road Nkhata Bay Northern Region

to Blantye Nkhata Bay


52 559 TONS 68 330 TONS

MODE CORRIDOR WEIGHT % ORIGIN DESTINATIONGROUPING PTTIME (days) COST $/TON$/T/Km

Transit Time Road freight to ports Sea freight to destination

Rail Nacala 0% US$36

Road Beira 5255,9 10% 70% The Uk US$79 US$75.4

30% South Asia US$79 US$98

Road Durban 36791,3 70% 54% The Uk US$126.9 US$75.4

46% USA US$79 US$107

Road Johannesburg 5255,9 10% South Africa US$93 0

Road Beira Holland US$79 US$72

Mombasa 5255,9 10% Kenya US$160.7

NOTES: 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.


INTERNATIONAL PART

PRODUCT : TEA

SPECIAL CONDITIONS : SUBJECT TO INFECTION

INTERNATIONAL PRICE


LOCAL PRICE

NATIONAL PART

8/6/2010 9

Nacala

Chipata

Dar Es Salam

Mbeya

Tyolo

Beira

MoatizeLuzaka

Chinde

Tete

Mtwara

HarareNsanje Port

DurbanJoburg

Kanona

5255 tons (10%)

UK (70%), South-Asia, Holland

Tea Exports 52559 tons in 2009

36,791 tons (70%)

Nkahta Bay

Tyolo

36,791 tons (70%)

Mulanje

Nkhata Bay

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

Kenya

5255 tons (10%)

8/6/2010 10

Location of production

About Sugar• 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

Nchalo

(Chiwawa District

Transport by dedicated lorries of raw cane

. 6 km from the mill: MK 450 per ton

. 40 km from the mill : MK 1000

Dwanga Sugar

Mills

Nchalo Sugar

Mills

Local Markets : Central and Northern Regions

Exports : Zambia, Tanzania, Rwanda, RDC

Trucks

47 km

Truck

Luchenza

Warehouse

Containers

16,8 to 20%

of total cost954 km

TrainNacala

197 km

954 km

TrainNacala

Train

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 11

Nchalo Sugarfactory and estate

Road withescarpment

Road to Bangulastation

Railway from ChiromoTo Luchenza, Limbe, Nacala

Chiromo bridge to rebuild

Bangula – Nsanje abandoned railBangula

warehouses

Luchenzawarehouses

Road to BeiraRail to Nacala

Distance between the railwaysAprox. 50km

Nsanje linked by road only

How to better capture possible improvements

Dedicated railway line to allow

a cheeper transport of raw cane

Replacement of the Chimoro bridge and

rehabilitation of the railway between Limbe

and Bangula

Southern regionTransportation problems

For Sugar

8/6/2010 12

DwangaSugar

factory and estate

Road to the lake in a swamp

Railway to Nacala and Lilongwe-Zambia in Chipoka

Poor embankment, out of the estate

Poor lake service, no Ro-Ro

Northern regionTransportation problems

For Sugar

8/6/2010 13

$ $

PACKING MODE : C0NTAINERISED

packed in 1000kg bags

280000 TONS 364000 TONS

MODE ROUTES WEIGHT % ORIGIN DESTINATION GROUPING PTTIME (days) COST $/TON $/T/Km

Road Nchalo in Chikwawa Southern Region

to Blantye Nchalo in Chikwawa

Road Dwangwa Northern Region

to Blantye Dwangwa in Nkhota kota


packed in 1000kg bags

280000 TONS 364000 TONS

MODE CORRIDOR WEIGHT % ORIGIN DESTINATION GROUPING PTTIME (days) COST $/TON $/T/Km

Transit Time ( days) Road freight to ports Sea freight to destination

Rail Nacala 140000 Mt 50% Chikwawa 50% EU 35 US$36 US$80

(South Mw) 40% USA 50 US$36 US$107Dwangwa (C/Mw) 10% Far East 45 US$36 US$98

Road Beira 126000 Mt 45% Chikwawa 50% EU 35 US$79 US$80

(South Mw) 40% USA 50 US$79 US$107Dwangwa (C/Mw) 10% Far East 45 US$79 US$98

Road Other 14000 Mt 5% Chikwawa 3% DR Congo 12 US$126.9 US$170

(South Mw) 1% Egypt 30 US$79 US$70

Dwangwa (C/Mw) 2% local 1 US$79 US$107

NOTES: 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.

INTERNATIONAL PART


PRODUCT : SUGAR

SPECIAL CONDITIONS : NONE


NATIONAL PART


8/6/2010 14

Nacala

Chipata

Dar Es Salam

Mbeya

Chiwawa

Beira

MoatizeLuzaka

Chinde

Tete

Mtwara

HarareNsanje Port

DurbanJoburg

Kanona

126000 t (45%)

Dwenga

140000 t (50%)

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

EU (50%), USA (40%)

Far East (10%)

Sugar exports (actual)

12000 t (5%)

Dwenga

Chiwawa

8/6/2010 15

Nacala

Chipata

Dar Es Salam

Mbeya

Chiwawa

Beira

MoatizeLuzaka

Chinde

Tete

Mtwara

HarareNsanje Port

DurbanJoburg

Kanona Dwenga

364, 000 t (50%)

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

Expected Sugar exports in 2012-2015

Use of Lake service and Nacala Corridor

Dwanga

Chiwawa

New containers boats or barges

Lake service in use

Replacement of Chiromo bridge

railway rehabilitation between

Bangula and Limbe

Conditions

8/6/2010 16

About Cotton and Garnments• 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

Cotton collection

Trucks

40% Beira

60% Durban

..% Johannesbourg)

Treatment

Far East (China)

South East Asia

Criteria for

exports/imports

Processing and

packaging

Conditions

At Port

Time of

arrival

Pricing of

land leg

Long

Term

contracts

Choice of the

corridor

Cotton Bagged in hessian sacks

of 120kg each

Good

storage

Not

sensitive

Important Not an easy market

for rail

8/6/2010 17

0.33/KG $ $

PACKING MODE : CONTAINERISED

Bagged in hessian sacks of 120kg each

27 560 TONS 38 580 TONS


Road Chikwawa Southern Region

to Blantye Chikwawa & Balaka

Road Balaka,Salima Central Region

to Blantye Salima & Ntcheu

PACKING MODE CONTAINERISED

Bagged in hessian sacks of 120kg each

27 560 TONS 38 580 TONS

MODE CORRIDOR WEIGHT % ORIGIN DESTINATION GROUPING PT TIME (days) COST $/t/km Cost$/t/km

Transit Time

Road Beira 11024 40% 70% Far East ( China) 50 US$79 US$98

30% South Asia 45 US$79 US$92

Road Durban 16536 60% 54% Far East ( China) 50 US$126.9 US$98

46% South Asia 45 US$126.9 US$92

Road Johannesburg 0% 0% South Africa N/A US$93 0

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.

INTERNATIONAL PART


PRODUCT : COTTON

SPECIAL CONDITIONS : NONE


NATIONAL PART


8/6/2010 18

Nacala

Chipata

Dar Es Salam

Mbeya

Chiwawa

Beira

MoatizeLuzaka

Chinde

Tete

Mtwara

HarareNsanje Port

DurbanJoburg

Kanona Dwenga

11,024 t (40%)

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

Cotton exports in 2009

Use of Roads to Beira and Durban

Dwenga

Chiwawa


16,536 t (60%)

8/6/2010 19

Nacala

Chipata

Dar Es Salam

Mbeya

Chiwawa

Beira

MoatizeLuzaka

Chinde

Tete

Mtwara

HarareNsanje Port

DurbanJoburg

Kanona Dwenga

38,580 t (40%)


Dwenga

Chiwawa

38,580 t (40%)

?

Cotton exports in 2020

Use of train to Nacala

Or intermodal

to Nsanje, Chinde,

Beira ?

8/6/2010 20

About Maize• 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 21

About MaizeTrends in domestic gaps

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.

8/6/2010 22

Nacala

Chipata

Dar Es Salam

Mbeya

Chiwawa

Beira

MoatizeLuzaka

Chinde

Tete

Mtwara

HarareNsanje Port

DurbanJoburg

Kanona

Maize local distribution

Use of the lake and railway distribution

systems

8/6/2010 23

About Cassava

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

8/6/2010 24

Alternative Supply Channels in Malawi’sCassava Value Chain

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

8/6/2010 25

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.

8/6/2010 26

Chipoka

Salima

Nacala

Chipata

Dar Es SalamMbeya

Bangula

Beira

MoatizeLuzaka

ChindeTete

Route for Cassava and sweet potatoe

mainproduction

area

efficient lakeservices allow

marketing

8/6/2010 27

Chipoka

Salima

Nacala

Chipata

Dar Es SalamMbeya

Bangula

Beira

MoatizeLuzaka

ChindeTete

RICE ALTERNATIVE CORRIDORS

MonkeyBay

Lower

Shire

8/6/2010 28

About Fertilizers• 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

• Imports from South Africa (Joburg), through Beira, Dar Es Salaam (Farmers World)

• Improvements to reduce the cost of imports for the farmers :

– 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.

Process and logistics Blending company Regional depots Distribution

Farmers World Liwonde From Liwonde

Optichem (production side) Blantyre Blantyre and Lilongwe From Blantyre and Lilongwe

Yara Traders and agents are selling fertilizers

to farmers

8/6/2010 29

IM P O R T S S T A T IS T I C S

$ 50 k g b a g $

P A C K IN G M O D E B A G S o r C O N T A IN E R S

5 0 k i l o g ra m b a g s

3 6 9 0 0 0 T O N S T ra n s p o rt e d b / b u l k 3 6 9 0 0 0 T O N S

M O D E C O R R ID O R W E IG H T % D E S T IN A T IO N O R IG IN G R O U P IN G P T T IM E (d a y s ) C O S T $ /T O N $ /T /K m

T ra n s i t T i m e F o b B e i ra / L L S e a f re i g h t

R o a d & S e a B E IR A 2 9 5 2 0 0 ,0 0 8 0 % T o L i lo n g w e In d ia /C h in a F O B B e i ra - L L 3 5 U S $ 9 2 / t/ k m U S $ 8 0 / t / k m

C o n t a in e r is e d D a r e s s a la a m 7 3 8 0 0 ,0 0 2 0 % T o B la n ty re U A E & S a u d i / A ra b ia F O B B e i ra - B t 3 5 U S $ 8 5 / t / k m U S $ 6 5 t / k m

F O B D a r - L L 3 0 U S $ 1 2 0 / t / k m U S $ 6 5 t / k m

P A C K IN G M O D E : B A G S

T O N S T O N S

M O D E R O U T E S W E IG H T % O R IG IN 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 ) C O S T $ /T O N $ /T /K m

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

P R O D U C T : F E R T IL IZE 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 IN T E R N A T IO N A L P R IC E

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

R E C E N T IM P O R T S E X P E C T E D IM P O R T S 20 20

N A T IO N A L P A R T

8/6/2010 30

Nacala

Chipata

Dar Es Salam

Mbeya

Chiwawa

Beira

MoatizeLuzaka

Chinde

Tete

Mtwara

HarareNsanje Port

DurbanJoburg

Kanona

Imports of Fertilizers in 2009

Possibilities in the future (1) and (2)

295200 tons (80%)

73 800 tons (20%)

1

2

(2) Barges on the Shire Zambezi

river

(1) Rehabilitation of the Nacala

Corridor and links to Lilongwe

Conditions

8/6/2010 31

Nacala

Chipata

Dar Es Salam

Mbeya

Bangula

Beira

MoatizeLuzaka

Chinde

Tete

Mtwara

Harare

SalimaChipoka

Nsanje Port

DurbanJoburg

Kanona

Route for Heavy Sands inputs and outputs

necessarypower from

coal

8/6/2010 32

About Clinker• 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

Opportunities for Malawi

• 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

8/6/2010 33

The cement production process

1) Limestone is taken from a quarry. It is the major ingredient needed for making cement. Smaller quant ities 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.

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.

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

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

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 heat ing without melting. 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".

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.

How to produce

Clinker

8/6/2010 34

About Mining

• Mining in Malawi (Uranium, Rare Earth, Heavy Sands, Bauxite)

• Coal of Tete Region (Moatize Mine with Vale, Riverdale Mine)

• Copper from Zambia

8/6/2010 35

Global SchemeMakanjira

Mulanje

Alumine to Cabora Basso

Chimwazulu MineLake Chiwa

KeyelekeraUranium Mine

KasunguLimestone

Salima and ChipokaHeavy minerals

Kangankunde Hill monazite

Mochuchuma-KatewakaCoal Field

Al

Ti

Kanyika mobdiumuranium mine

Mzuzu

Lilongwe

Electricityand coal

Coal from Moatize to Nacala

70 km

120 km

Substitution of Sulfur

Nsanje Port (Molasses, fertilizers)

Ni

Sugar

Sugar

N

N

52 km

8/6/2010 36

$ $

PACKING MODE : CONTAINERISED

(In Drums of 333kg's each)

500 TONS 10000/ yr TONS


Road Kayelekera Nothern Rgn

in Karonga Karonga

0%


(In Drums of 333kg's each)

500 TONS 10000/ yr TONS

MODE CORRIDOR WEIGHT % ORIGIN DESTINATION GROUPING PT TIME (days) COST $/TON

Transit time Road freight to port Sea freight

Road Walvis Bay in 100% Kayelekera 100% CANADA 50 US$1179/TON US$107

NAMIBIA Karonga

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

commence in 2012/13 season.


PRODUCT : URANIUM

SPECIAL CONDITIONS : SUBJECT TO INFECTION

LOCAL PRICE

NATIONAL PART

RECENT PRODUCTION

INTERNATIONAL PART

INTERNATIONAL PRICE

EXPECTED PRODUCTION 2020

8/6/2010 37

Nacala

Chipata

Dar Es Salam

Mbeya

Chiwawa

Beira

MoatizeLuzaka

Chinde

Tete

Mtwara

HarareNsanje Port

DurbanJoburg

Kanona

Kayelkera

Expected Uranium exports in 2020By trucks to Walwis Bay (Containerised in drums of

333 kg’s each)

Kayelekera

In Karonga

10,000 t/year

8/6/2010 38

Chipoka

Salima

Nacala

Chipata

Dar Es SalamMbeya

Bangula

Beira

MoatizeLuzaka

ChindeTete

Route for Aluminium Ore inputs and outputs

chemicals

coal

aluminum

8/6/2010 39

Nacala

Chipata

Dar Es Salam

Mbeya

Chiwawa

Beira

MoatizeLuzaka

Chinde

Tete

Mtwara

HarareNsanje Port

DurbanJoburg

Kanona

Expected Coal exports from Moatize

mine in 2020

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

the Moatize region”.

Phase 2 : after 2015

. 21 million tonnes per annum, run-of-mine, which implies a 1,500 MW mine-mouth power plant

2015 :6 to 8 million tons

2015 : 3 up to 6 million tons

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.

Riversdale expects to produce 20-million tons of coking coal from Mozambique by 2016.

20 millions export capacity

8/6/2010 40

Nacala

Chipata

Dar Es Salam

Mbeya

Chiwawa

Beira

MoatizeLuzaka

Chinde

Tete

Mtwara

HarareNsanje Port

DurbanJoburg

Kanona

Expected Copper exports from Copper

Belt in 2020

(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.

8/6/2010 41

Chipoka

Salima

Nacala

Chipata

Dar Es SalamMbeya

Bangula

Beira

Moatize

Luzaka

ChindeTete

127, 000 t Cement

80,000 t Lime

28,000 t Fuel

General Cargo

Mtwara

Tobacco,

100,000 t Rice,

Sugar, Tea, Beans

and Metals

59,600 t Fertizers

9,6000 t Fuel

140,000 t Sugar

15,000 t Food Crops

Liwonde

Chilumba

Lilongwe

Blantyre

89,400 t Fertizers

153,000 Fuel

162,000 t tobacco

36,000 t Tea

11,000 t Cotton

126,000 t Sugar

Durban91,000 t exports

Actual traffic on corridors

8/6/2010 42

IMMEDIATE NEEDS Tea Tobacco Cotton Sugar Nuts

Quantities 2009 52.56 232.63 27.56 280.00 295.33

Existing mode Road Road Road Road or Rail Road+rail

Existing corridor Durban Beira Durban +

Beira

Beira or Nacala Tazara

Priorities for Transport

Improvement and

Investment

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 Pulses

Quantities 2009 3913.00 758.00 2714.00 3201.68 106.11 383.00

Existing mode None none none road road Road+rail


Improvement and

Investment

Lake service

Nkhata Bay

Cheaper road

transport

Lake service

Nkhata Bay

warehousing Lake service MCC

equipment

rail link Limbe -

Chipoka-

Lilongwe –Chipata

rail link Limbe

- Chipoka-

Lilongwe -

Chipata

rail link

Limbe -

Chipoka-

Lilongwe -

Chipata

efficient rail

services

efficient rail

services

Ro-Ro service

on the lake

Equipments to

produce flour8/6/2010 43

Petrol Paraffin Diesel &

other

General

Petroleum

Fertilizer Imported

Coal

Quantities 2009 107.80 14.80 157.40 280.00 141.61 2.00

Existing mode Road Road Road Road Road Train

Existing corridor Beira Tazara Beira Beira Beira Beira


Improvement and

Investment

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 -

Chipoka-

Lilongwe -

Chipata

rail link Limbe -

Chipoka-

Lilongwe -

Chipata

efficient rail

services

efficient rail

services

Services on

the lake

Ro-Ro service RoRo service

Lime Clinker Uranium Titanium ore Pig Iron Alumina

Quantities 2009 38.00 21.00 0.00 0.00 0.00 0.00

Existing mode Road Road + train Road none none none

Existing corridor

Tazara western

Western and

TAZARA none none none


Improvement and

Investment

lake service Tete bridge MCC

equipment

Energy Energy Rail link to

Moatize

8/6/2010 44

transport demand (wtcr presentation)

Documents

tkm us

sea freightroad sea

dowa poland beira route

turkeytobacco exports

tkmnorthern region russia

tkmsouthern region turkey

netherlands durban route

tkmdedza belgium durban