Chinese companies invest in Peru awaiting rail freight line to Bolivia, Brazil

Different Chinese companies are investing a total of around 8.6 billion Euros in several infrastructure and mining projects in Peru, in anticipation of the new railway line between Peru and Bolivia.

Sea shipping giant Cosco has committed to the construction of a new port in the town of Chancay, 58 kilometres far from the capital, Lima. Similarly, China Railway Engineering Corporation has announced to build a second port in the town of Ilo in the region of Moquegua. This is an important mining area, and the additional port serves to increase handling capacity of the harbour. Meanwhile, aluminium company Chinalco will expand its activities in the copper mine of Toromocho to increase mineral extraction by around 45 per cent to 300,000 tonnes in 2020.

Peru-Bolivia line

The companies coordinate their activities with the development of the new rail freight connections of Peru with Bolivia and Brazil. Peru and Bolivia recently signed an agreement to build a rail track between the border town of Desaguadero and the Peruvian Port of Ilo, to provide a new export gate for Bolivian goods on the Pacific coast, avoiding the Chilean Port of Arica. Bolivia and Peru remain at a long-lived diplomatic stand-off with Chile, after this country annexed Arica port from Peru and Cobija port from Bolivia in the second half of the 19th century.

China is the biggest international investor in Peru, being focused on ports, rail freight and mining industries. It is extremely interested in the Bioceanic rail corridor in Peru, Bolivia and Brazil. Cosco is developing important projects on the South America Pacific coast. The area is a key agricultural and mining supplier for the Chinese market and its government wants to take part in rail freight expansion to decline its logistic costs and strengthen its global supply chain.