Boluarte and Xi Inaugurate Chancay Port During APEC Summit 2024
Peruvian President Dina Boluarte and Chinese President Xi Jinping proceeded to a virtual inauguration of the seaport of Chancay one day ahead of the opening plenary of the APEC Summit 2024 (#APEC2024) being held in Lima from 9 to 16 November 2024.
Both presidents officially announced the opening of the ports in the presence of distinguished guest and members of the local and international media. The participants also had the opportunity to view a video clip presenting the project.
According to the estimates, the Chancay container terminal necessitated an investment of USD 1.3 billion. However, the master plan for the Chancay Port Area is more ambitious and comprises of an industrial zone with enhanced logistical infrastructure and if realized could bring the total investments up to USD 4 billion within the coming decade.
The Chancay port is located 80 km north of Lima and was developed as a JV between Volcan Compania Minera and Cosco Shipping Ports. When completed, the port will attain a handling capacity of 1.5 million #TEU per year. It incorporates a breakwater structure to block high waves and allow operations to continue during bad weather.
From signing of the agreement to operationalization, the project took shape in record time in under two years. Based on the feasibility studies, it port will generate USD 4.5 billion in revenues annually for Peru and will lead to the creation of 8,000 direct jobs.
Both leaders hail the Chancay port as the ‘Gateway to Latin America (LatAm)’ and a key node of the Belt and Road Initiative (#BRI). Bilateral trade volume between #LatAm and China reached USD 485 billion in 2023 and the Chancay-Shanghai link is expected to bolster commerce between LatAm and Asia. The Chancay port aspires to a regional trade hub along the land-sea corridor connecting LatAm to Asia.
Previously, goods shipped from China to Peru usually had to stop at Long Beach port in California, where the containers were transshipped to smaller regional feeder vessels. With the direct shipping route between Chancay and Shanghai, the shipping time is expected to be shortened from 33 days to 23 days, substantially reducing costs and delays.
Peru officially joined the BRI by signing the MOU only in November 2023 during the China-LatAm and Carribbean Countries Forum on Science, Technology and Innovation Cooperation.. The construction of Chancay port officially kicked off in October 2023 following Peru’s signal to jump on the #BRI train.
Despite not being the largest economy in LatAm, Peru was selected for this strategic project. One of the key reasons might be that Peru is rich in #CriticalMinerals and is in fact the 2nd largest producer of copper. At the end of 2023, Chinese companies owned at least 5 copper mines in Peru.
A consortium led by China MinMetals owns the largest copper mine in Peru at Las Bambas which on its own accounts for nearly 2% of global copper production. Chinalco owns the Toromocho mine and other mines through its local subsidiary Mineras Chinalso Peru SA. Galeno is a copper-gold mine jointly owned by China MinMetals and Jiangxi Copper Coporation. Finally, Zijin Mining Group owns Rio Blanco mine in the Piura region.
The LatAm is also quite strategic to China as it has large reserves brine from which #lithium can be extracted with Chile and Argentina being the 2nd and 4th largest producer of the critical metal. As a major emerging economy in LatAm, Brazil is a founding member of BRICS. It is also a top supplier of meat to China and a major destination market for China. In fact, Brazil has also announced the building of a railway to connect with Changay port.