China plans US$10 billion investment in Peru

Energy, mining, telecoms and ports in the spotlight

Chinese companies are expected to invest up to US$10 billion in Peru over the next three years in sectors including energy, mining, telecoms and ports. The estimate was made by Jia Guide, China's ambassador to Peru, ahead of a signing ceremony held in Lima for Aluminum Corp of China's (Chinalco) US$1.3 billion expansion of its Toromocho copper mine.

In comments made to Peruvian news agency Andina, Jia also said that China Railway Engineering Corp has put forward plans to build a new port in the southern town of Ilo. China is the world's third largest copper producer but is also a large importer since it is the biggest copper consumer. Peru ranks second behind Chile as the world's largest copper producer. Chinalco is China's largest state-owned aluminium producer, and also fabricates copper tubes and sheets.

In August 2007 Chinalco acquired all the shares of Peru Copper Inc, owner of Minera Peru Copper, which is now known as Minera Chinalco Peru SA. The following year it signed the transfer of the concessions and mining assets contract of the Toromocho Project, one of the country's largest copper mines. In 2017 Chinalco announced plans for the second phase expansion, to increase the mine's copper output by 45% by 2020.

Separately, Reuters has reported that Cosco Shipping Holdings Co, the container shipping and terminal operation unit of China Cosco Shipping Corp, has put forward plans to build and operate a US$2 billion port in Peru. The proposed port is located in Chancay, a town 58 km north of Lima, and is owned by Peruvian miner Volcan Minera. Volcan said in May 2018 that it was looking for a strategic partner for the Chancay project. The port would present a challenge to the Danish Maersk Group's Pacific Hub in Callao, run by Maersk subsidiary APM Terminals. The terminal completed a US$460 million modernization and expansion plan in 2016.

Per the company in May, APM Terminals Callao's container volumes have increased by almost 50% over the past two years and it handles around 39.8% of the country's total container traffic. The terminal also handles 74% of Peru's non-containerized (general) cargo (excluding minerals), including steel products, grains, roll-on/roll-off (ro-ro) cargo, cement, chemicals and frozen fish.

Photo: David Gubler

Date

13 Jun 2018

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