COSCO to build $2 b port in Peru

Monday, 4 June 2018 00:00 - - {{hitsCtrl.values.hits}}

Lima (Reuters): China’s COSCO Shipping Holdings Co Ltd will build and operate a $2 billion port on Peru’s Pacific coast, part of $10 billion upcoming Chinese investments in the copper-producing nation, China’s ambassador to Peru announced on Friday.

The proposed port in Chancay, a town 58 km (36 miles) north of the Peruvian capital Lima, was last under the control of Peruvian miner Volcan.

Volcan said in its earnings statement last month that it was seeking a strategic partner on the Chancay project, and did not immediately respond to requests for comment on Friday.

China is Peru’s top trade partner and imports most of the minerals the South American country produces. But Chinese companies have increasingly expressed interest in investing in sectors beyond mining.

“Chinese-Peruvian relations behold a promising outlook,” Ambassador Jia Guide said at a ceremony with Peru’s president. “In the next three years, a wave of Chinese investments worth $10 billion is expected, in energy and mines, telecommunications, construction and financing,” Jia added in televised comments.

Jia also said that China Railway Engineering Corporation (CREC) plans to build a port at the southern town of Ilo, the capital of a copper-rich mining region.

The director of Peru’s National Port Authority, Edgar Patino, said he was unaware of any proposal by CREC to build a new port in Ilo and that a potential expansion at the current port would be awarded to a company through a public auction.

Patino said the Ilo port would be expanded if a proposed railway to transport goods from Brazil, Bolivia and other countries is built.

The ceremony at Peru’s presidential palace was held to celebrate Chinese miner Chinalco’s $1.36 billion expansion of its copper mine Toromocho in southern Peru, which will increase output by 45% in 2020, Chinalco’s Chief Executive Ge Honglin said.

Peruvian President Martin Vizcarra, who took office in March, praised the expansion at Toromocho as the first important investment in his government and said it would create 3,500 jobs through 2021.

“The clear support from the president for our expansion project doesn’t just give us the enthusiasm and confidence to build the project, it also drives us to plan new projects in the near future,” Ge said without offering details.

The Peruvian subsidiary of China’s Zhongrong Xinda Group is scheduled to start building its proposed $2.5 billion iron ore mine Pampa de Pongo this year, according to Peru’s government. The local unit of Chinese steelmaker Shougang Group has already started work on a $1.3 billion expansion of its Marcona iron ore mine.

Last week China’s Shandong Gold Group said it was looking forward to investing in Peru, but declined comment on potential projects.