China’s Cosco Shipping opened the first phase of its new Chancay Port in Peru yesterday after a two-year construction period.
The complex 78km north of Lima will now begin handling up to 1.5 million twenty-foot-equivalent containers and 6 million tonnes of general cargo a year.
President Xi Jinping and his Peruvian counterpart Dina Boluarte were virtually present at the ceremony. Xi is in Lima to attend a meeting of the Asia-Pacific Economic Cooperation leaders.
The 17.8m-deep port was built by China Harbour Engineering, a subsidiary of China Communications.
Cosco will own 60% of the port’s equity, with the remaining 40% held by Volcan, a mining concern belonging to Swiss commodities giant Glencore.
Cosco said the port was its first “green and smart” investment in South America.
Chancay consists of the dock, a logistics hub and an industrial zone built on 992ha of land.
Altogether, the facility will have a construction cost of about $3.6bn, of which $1.3bn has been spent on this initial phase.
The port is expected to be an important node in China’s global Belt and Road infrastructure drive.
China will import minerals and agricultural produce and export manufactured goods.
The Financial Times notes that Peru is hoping the port will transform its economy from a primary materials producer to “the Singapore of South America”.
China is Peru’s main trading partner, and traffic between the two is growing at about 15% a year.
So far this year, Peru has taken delivery of $11bn of Chinese goods, and exported about $22bn, of which $20bn was metal ore.
The port will generate $4.5bn in revenue for Peru and create 8,000 direct jobs.
It is expected to cut the number of days needed to move a container between China and South America from 35 days to 23, thereby cutting costs by 20%.
The port will also aggregate cargo carried on smaller container ships from Colombia, Ecuador and Chile, and transport them to Asia in “ultra large” carriers, which can accommodate between 14,500 and 24,000 containers.
In the past, these ships had to go to Manzanilla in Mexico or California’s Long Beach to unload.
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