Chinese company to help build Peru port

Another Chinese firm has won a contract to build a new port terminal in the south of Peru, the latest project in the construction of a network of ports that could reshape how goods flow between Latin America and Asia.

Jinzhao Peru, the local subsidiary of a Chinese construction firm, will build the country's third-largest port, San Juan de Marcona, and continue to redefine how goods move in and out of the west coast of South America. In the north of the country, COSCO Shipping Ports is building the huge Chancay Multipurpose Port Terminal.

Peru announced on March 22 that it had awarded the tender to build the port in the southern region of Ica, near the Pampa de Pongo iron project, which Jinzhao is also developing.

The new port terminal will cost $405 million and will be able to move 19 million metric tons of ore per year and make it easier to transport bulk goods, including iron concentrate and copper. This will ultimately reactivate mining projects worth $15 billion by attracting more investments and driving improvements in Peru's logistics infrastructure.

Such improvements could turn the country into a South Pacific logistics hub, reducing transportation time for goods to Asia by 10 to 15 days, said Carlos Pareja, a diplomat and former ambassador.

"I am sure that as port activities are enabled, there will be an increase in the flow of ships and activities in the logistics area," Pareja said.

"Peru is a country open to foreign investment. We have very successful investments in mining. We also have many foreign investors who are partners with Peruvian companies."

Construction of the new terminal is due to start next year or in early 2026, and the first phase should be operational two years after that, said Jose Salardi, head of Peru's state investment agency Proinversion, during an event to announce the awarding of the tender.

By designing, financing and building a new terminal and operating it for the next 30 years, Jinzhao will be the second Chinese company to build and operate a port in Peru.

The Chancay port is expected to ultimately cost $3 billion and will include 11 berths and another one for bulk cargo, general cargo and rolling cargo. It is slated to start operations later this year.

The new ports are important for Peru, given that 45 percent of the country's exports go to Asia and 30 percent of imports come from Asia, said Alejandro Indacochea, chairman of Indacochea Associates.

Key role

The new port terminal, along with the Chancay port, will be part of a network of ports that will play an important role in connecting the entire Pacific Basin, with shipping routes extending to multiple ports in China, Japan, Singapore and Australia.

The expanded port network in Peru could facilitate exports of bananas and flowers from Ecuador. Colombia, which does not have a free-trade agreement with China, is considering setting up a free-trade zone in Peru. Chile could use Peru to ship minerals mined in the north of the country at a much lower cost. Peru is also a natural outlet for landlocked Bolivia, Indacochea said.

In the long term, the port network would make it possible for Brazil, in the east of the continent, to link directly to a Pacific Ocean port "so that its products and goods can reach Asia more promptly", Pareja said.

And Chancay itself, where the new mega port is being built, could be transformed.

"It has been said that Chancay could be the Hong Kong of South America," Indacochea said.

The writer is a freelance journalist for China Daily.