Railway Systems of Zambia (RSZ), a subsidiary of New Limpopo Bridge Investments (NLBI), will lose the concession to provide freight service -- one of the country's major privatizations -- because of its poor management, said Mwanawasa.

"We ask them to give (RSZ) back to us so that we can give it to another company that can run it better," he said on state radio on Friday.

RSZ operates a railway line linking South Africa, the Democratic Republic of Congo and Tanzania, a crucial network for mining, the Southern African country's economic lifeblood.

Mwanawasa said RSZ had failed to overhaul the network stretching more than 900 km (559 miles) from the southern tourist city of Livingstone to the Copper Belt town of Chingola in the north since it was awarded the concession in 2003.

RSZ general manager Bebe Botana said company had not been notified of the government's decision. "We shall give more information when this matter is formally communicated to us with the appropriate details," Botana said in a statement.

Zambia needs to improve its railway system because its roads cannot handle heavy loads of copper and cobalt for export.

It has handed over 280 state-run firms to private investors in the last 15 years, including its copper mines, in what analysts have described as one of Africa's most successful privatization drives.

But some experts have criticized the government for what they call bungling privatization of some important firms.

Mwanawasa said the government and private investors were discussing construction of a railway link between the Copper Belt town of Chingola and the Lumwana copper mine.

Australia's Equinox Minerals plans to peak copper production to 165,000 tonnes per year at the Lunwana facility after starting commercial production there in 2008.