NEWS RELEASE
I 20 JUNE
2024
Malawi Rail Upgrades
Underway
· Upgrading of the 399km
Nkaya-Mchinji section of railway currently underway as part of
Government of Malawi's "Rail Strategy and Growth
Plan"
· Railway runs across
Sovereign's Kasiya Rutile-Graphite tenements from Mchinji at the
Malawi-Zambia border to Nkaya Junction, where it connects to the
Nacala Logistics Corridor providing an export route through the
deep-water port of Nacala
· Refurbishment of the railway
will improve efficiency and capacity, and is being undertaken by
Central and Eastern African Railway Company (CEAR) with completion
expected by end of 2024
· Upgrade works include
refurbishing rail bridges and reballasting along the section
through Kasiya to increase maximum axle load from 15 tonnes to 18
tonnes
· Upgrade of the line section
through the Kasiya Project area is near complete, running from
Lilongwe District southward to the Nacala Logistics
Corridor
· Nacala Logistics Corridor is
the preferred logistics route for exporting Sovereign's rutile and
graphite products to global customers, with the Sena Rail Line to
the Port of Beira offering a secondary route
Sovereign Metals Limited (ASX:SVM;
AIM:SVML) (the Company or Sovereign) is pleased to report that
upgrading of the 399km Nkaya-Mchinji Section Railway (Railway) connecting the Malawi-Zambia
border to the Nacala Logistics Corridor (NLC) and which runs across the
Company's Kasiya Rutile-Graphite Project (Kasiya or Project) tenements, is underway.
Refurbishment of that part of the Railway mainline which connects
the Kanengo junction in the Lilongwe District, where Kasiya is
located, to the NLC junction at Nkaya is near
completion.
Figure 1: CEAR undertaking
upgrade works on a railway bridge connecting Kasiya to the
NLC
Rehabilitation of the Railway is an
initiative by Malawi's Ministry of Transport and Public Works and
forms part of the Government of Malawi's Rail Strategy and Growth
Plan, which has the stated mission "to facilitate the provision of a safe,
efficient, and sustainable rail transport system" to
"promote socio-economic
development."
Upgrade works will increase
efficiency and capacity of the Railway and are being undertaken by
CEAR. Completion is planned for the
end of 2024. Works include refurbishing railway
bridges and reballasting to handle increased load-bearing capacity
from a current maximum axle load of 15 tonnes to 18
tonnes.
Managing Director Frank Eagar commented: "Kasiya already benefits
from exceptional existing infrastructure in central Malawi. This
refurbishment project re-affirms Kasiya's logistics solution with
sufficient rail capacity, enhanced reliability and a direct
connection to the deep-water export Port of Nacala. The
infrastructure investment by CEAR and Nacala Logistics along with
approvals from the Malawi Government is a demonstration of the
country's commitment to achieving its major economic development
goals which include developing the mining industry and increasing
Malawi's export market."
Figure 2: Upgrade works at a
railway bridge on the Nkaya-Mchinji Section
Railway
Kasiya benefits from two options for
transporting its rutile and graphite products from the mine
operations to seaports, being the Nacala Logistics Corridor to the
Port of Nacala and the Sena Rail Line to the Port of Beira
(Beira Corridor). The
current upgrades to the Nkaya junction improve access to the NLC
and will ultimately also improve access to the Beira
Corridor.
The NLC offers the preferred
logistics route to the deep-water Indian Ocean port of Nacala to
export to global markets. This established and operation-ready
logistics infrastructure provides significant capital and operating
cost savings to Kasiya. To access the NLC, Sovereign plans to
construct a 6km rail spur to connect directly with the processing
plant, increasing efficiencies in handling inbound and outbound
freight compared to any road alternative.
The Beira Corridor, comprised of the
Sena Rail Line and the Port of Beira, provides Sovereign with a
second route to export markets and is currently undergoing its own
upgrade works. Last year, the Beira Development Corridor Agreement
was approved, with the objective of connecting the Democratic
Republic of Congo, Zambia, Zimbabwe, and Malawi to the Mozambican
Port of Beira through road and rail networks. As Mozambique's
second largest port, the Port of Beira is a significant driver of
the region's economy and an important gateway for global trade,
handling a wide variety of containerised and bulk cargo. The Beira
Development Corridor Agreement project aims to eliminate logistical
bottlenecks for international and intra-African trade. The African
Development Bank (AfDB) is a major financier of the
project.
Figure 3: Nacala Logistics
Corridor with section currently being upgraded in
orange
Figure 4: Port of Nacala,
Mozambique
Figure 5: Port of Beira,
Mozambique (Source: Cornelder de
Moçambique)
Figure 6: A Nacala Logistics
Corridor train
ENQUIRIES
Frank Eagar (South
Africa/Malawi)
Managing Director
+61(8) 9322 6322
|
Sam Cordin (Perth)
+61(8) 9322 6322
|
Sapan Ghai (London)
+44 207 478 3900
|
Nominated Adviser on AIM and
Joint Broker
|
|
SP Angel Corporate Finance
LLP
|
+44 20 3470 0470
|
Ewan Leggat
Charlie Bouverat
|
|
|
|
Joint
Brokers
|
|
Stifel
|
+44 20 7710 7600
|
Varun Talwar
|
|
Ashton Clanfield
|
|
|
|
Berenberg
|
+44 20 3207 7800
|
Matthew Armitt
|
|
Jennifer Lee
|
|
|
|
Buchanan
|
+ 44 20 7466 5000
|
Forward Looking Statement
This release may include forward-looking statements, which may
be identified by words such as "expects", "anticipates",
"believes", "projects", "plans", and similar expressions. These
forward-looking statements are based on Sovereign's expectations
and beliefs concerning future events. Forward looking statements
are necessarily subject to risks, uncertainties and other factors,
many of which are outside the control of Sovereign, which could
cause actual results to differ materially from such statements.
There can be no assurance that forward-looking statements will
prove to be correct. Sovereign makes no undertaking to subsequently
update or revise the forward-looking statements made in this
release, to reflect the circumstances or events after the date of
that release.