By Nicholas Bariyo

China Railway Construction Corp. (1186.HK) plans to construct a $2.3 billion railway line from Zambia to Malawi, offering the mineral-rich but landlocked nation an alternative rail access to a sea port.

China Railway Construction said the value of the contract represents about 2.51% of its operating revenue in 2015, and expects the project to be completed in four years.

The 400-kilometer line will run from Chipata, in central Zambia, connecting to an existing line in Lilongwe, Malawi's capital and Mozambique's port city of Nacala, accordingto Brian Mushimba, Zambia's transport and communications minister.

The project will reduce the distance by railway from central Zambia to the Indian Ocean to 1,500 kilometers. Currently, Zambia relies on the 1,860-kilometer Tazara railway to Tanzania's Dar Es Salaam as its sole rail link to a seaport.

But inefficiencies at the ageing line, built by the Chinese in the 1970s, has compelled miners in Zambia and Congo to resort to transporting copper and cobalt by trucks to ports in South Africa, driving up operational costs amid volatile global metal prices. Zambia and Congo account for more than 80% of Africa's total copper output.

The contract for the design and construction of the project was signed in Lusaka on Monday. Construction is expected to start early next year, with commissioning scheduled for mid-2019, according to officials.

Joanne Chiu contributed to this article.

Write to Nicholas Bariyo at Dow Jones Newswires

November 03, 2016 04:36 ET (08:36 GMT)

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