Data Insights: China's US$50bn investments in Peruvian projects, operations

China has consolidated its presence in Peru through its wide-ranging participation in many large projects. The Asian giant, which is Peru's main trade partner, has a stake in more than 70 projects in key sectors such as mining, electricity, ports and oil.

According to the BNamericas database, the projects – some already in operation and others underway or yet to begin development – involve total Chinese investment of more than US$50bn, with the standouts being construction of the Chancay ‘megaport’ (US$3.6bn), startup of the Talara oil refinery (US$5.54bn) and a proposed interoceanic rail line between Peru and Brazil (estimated at US$7.5bn), as well as important mining projects aimed at supplying iron ore and copper to meet growing global demand.

BNamericas takes a look at some of the Chinese companies and projects in the country.

COMPANIES

China's biggest infrastructure and mining groups have a presence in Peru. According to the database, China Railway Group Company, Power Construction Corporation of China, COSCO Group, Jiangxi Copper Corp, Zijin Mining Group, China Three Gorges Corporation and China Minmetals Corporation are the major groups that have operations in the country, as can be seen below.

Company	No. of projects	Capex (US$ billion)
China Railway Group Company	8	13.00
Power Construction Corporation of China	8	7.04
COSCO Group	1	3.60
Jiangxi Copper Corp.	1	3.50
Zijin Mining Group Ltd	1	2.79
China Three Gorges Corporation	8	2.67
China Minmetals Corporation	3	1.87

Source: BNamericas database

A total of 51 Chinese companies are identified that have direct presence, subsidiaries in the country and/or which participate in consortiums, with Chinese capital involved in 78 projects in Peru.

ELECTRIC POWER

The BNamericas database identifies 30 Peruvian electric energy projects entailing investments of around US$3.68bn. In most of these initiatives, Chinese companies play the role of specialized equipment suppliers, particularly in photovoltaic plants. The most important of these facilities are shown below.

Project	Capex (US$ million)	Chinese subsidiary
San Martín solar	252	LONGi (Jiangsu Juyang New Energy Technology Co.)
Solimana solar	226	Sungrow Power Supply Co.
Continua Misti solar	210	Trina Solar

Source: BNamericas database

With regard to hydroelectric plants, Chinese companies also participate in important developments such as the Lluta and Lluclla facilities (US$950mn) and the Santa Teresa II hydro (US$500mn). The company Inland Energy (owned by China Three Gorges Corporation) is behind both projects as operator.

Meanwhile, there is another significant project involving a thermal cogeneration plant for the new Talara refinery. It entails capex of US$192mn and was developed by the Cobra-Sinohydro consortium.

In total, there are 16 companies of Chinese origin (including subsidiaries and official representations in Peru) that participate in Peruvian electricity projects.

INFRASTRUCTURE  

Although Chinese companies have somewhat less of a presence in the infrastructure sector, they are still heavily involved in very important developments that will be key to the growth of the Peruvian economy.

The standout is certainly the Chancay port being built north of capital Lima. The first phase of the project (US$1.3bn) is now 76% complete and is due to be delivered in November. Cosco Shipping Ports, which has been constructing the facilities, will also be the operator.

Chancay is not the only port project in the pipeline. In the medium term, another three important port initiatives are expected (see table below), with Chinese firms involved in all of them.

Project	Capex (US$ million)	Chinese subsidiary
San Nicolás pier	300	Shougang
Marcona port terminal	405	Jinzhao Mining (Zhongrong Xinda Group)
Almirante Miguel Grau port	600	China Railway No. 10 (financial advisor)

Source: BNamericas database

In the rail sector, the only project currently under construction is line No. 2 of the Lima metro, but there are plans for future lines involving Chinese capital. One of them, the Lima-Ica railroad, is a US$4.6bn passenger initiative proposed by China Railway Group, with a feasibility study now being prepared.

In order to facilitate Latin American exports to China, an interoceanic train between Peru and Brazil has also been suggested. The first draft of the feasibility study was prepared by the company China Railway Eryuan Engineering Group.

According to representatives of the Peruvian-Chinese chamber of commerce (Capechi), Chinese companies are interested in participating in the project, with the main motivation being to link the Atlantic and Pacific coasts of South America, with the Pacific terminal being Chancay.

In the case of road projects, Chinese companies are involved in eight initiatives that entail investments of US$1.08bn, including the construction and rehabilitation of the Huánuco-Huallanga highway for US$353mn.

MINING

Mining is another Peruvian sector of strategic interest to the Chinese. According to the BNamericas database, there are some 13 projects under development or in preparation. They involve investments of over US$18bn and are focused on copper and iron ore.

In this portfolio, the Toromocho expansion (US$1.36bn) and Chalcobamba (US$130mn) copper projects are the most advanced, with works scheduled to be completed this year. 

The former belongs to Chinalco (Aluminum Corporation of China) and the second to Minera Las Bambas, which is a partnership between MMG (China Minmetals Corporation), Guoxin International Investment Corporation and CITIC Metal Company.

In iron ore, the biggest of the projects to be developed is Pampa de Pongo (US$1.8bn), which is located in Ica region in the south of the country. It is expected to begin operations in 2028, and will be developed by Jinzhao Mining Perú.

Although in the short term there are no big greenfield projects, China remains committed thanks to the heavy investments already made and underway. The following are some of the most important projects in the portfolio.

Project	Capex (US$ billion)	Chinese subsidiary
Galen	3.50	Jiangxi Copper Corp
Ferrobamba replacement	1.75	Las Bambas (China Minmetals Corporation)
Apurímac iron	2.90	Dalian Huarui Heavy Industry Group Co. Ltd. (Advisor)
Río Blanco	2.79	Zijin Mining Group Ltd

Source: BNamericas database