Japan pours $7B into African rail link for Sovereign graphite

Japan has committed $7 billion to develop the Nacala Logistics Corridor, a project expected to boost Sovereign Metals’ (ASX: SVM; LSE: SVML) Kasiya rutile-graphite project in Malawi.

The funding would refurbish and expand the railway link from Sovereign’s Kasiya project, which already has access to Japanese titanium markets, across Malawi and Zambia to the deep water port of Nacala in northern Mozambique, according to a statement issued Thursday. 

It includes $5.5 billion through the Enhanced Private Sector Assistance for Africa program, which channels development funding via the African Development Bank. A further $1.5 billion will come through Japan’s development agency to support private sector projects, including mining and infrastructure.

“We will launch a new region-wide co-creation for common agenda initiative that promotes logistics in the Nacala Corridor, which contributes to strengthening mineral resource supply,” Prime Minister Shigeru Ishiba said in his keynote address.

Shares in the miner see-sawed before closing flat at A66¢ apiece on Thursday in Sydney for a market capitalization of about A$427 million ($283 million).

Certified quality

The Asian country’s Ministry of Foreign Affairs, working with the African Development Bank, unveiled the investment at the ninth Tokyo International Conference on African Development, which took place Aug. 20-22. 

Japan’s Toho Titanium confirmed in June that rutile from Kasiya meets the standards required for high-performance titanium production. The certification strengthened Japan’s critical minerals strategy and validates Kasiya’s global potential.

Japan’s support reinforces the project’s economics and its role in global supply chains, said Sovereign Metals CEO Frank Eagar.

“The initiative demonstrates the highest level of government backing for the corridor that underpins our project economics, while Japan’s focus on securing critical mineral supply chains aligns perfectly with Kasiya’s world-class rutile and graphite resources,” Eagar said.

The Nacala Corridor serves as the preferred transportation route for Sovereign’s forthcoming definitive feasibility study for Kasiya. It offers direct access to the deep-water port of Nacala, cutting transport costs and improving market reach.

Sovereign plans to build a six-km rail spur to connect its processing plant to the corridor and is negotiating with regional logistics providers to ensure efficient shipment of rutile and graphite to international markets.