Making waves: Matarani port eying new South American trade routes with expansion

Peru's port sector has been highly dynamic in recent years, with a range of significant investments underway and in the pipeline to boost cargo handling capacity to cope with growing mining production and international trade.

In parallel with the inauguration of the Chancay megaport north of Lima due to take place in mid-November, southern Peru is preparing projects to address rising volumes from existing mines and a range of new operations being developed, including Cotabambas, Haquira, Falchani, Corani, Zafranal and Tía María.

Matarani port in Arequipa region is currently the main gateway for Peru's outbound shipments of copper, serving mining companies such as Cerro Verde, Las Bambas, Antapaccay, Marcobre and Hudbay.

Although the port is currently operating without any major problems, handling both minerals and containers, new investments are required to deal with the rising cargo volumes and projected opportunities in the future.

BNamericas speaks with Mauricio Núñez del Prado, CEO of Matarani's private port operator Tisur, about the port's performance this year, the US$390mn investments lined up for expansion of the facilities, and the opportunities that are opening up with Chancay port.

BNamericas: How has the port performed so far this year?

Núñez del Prado: Well. After many years we haven't had issues in transporting minerals to the port, as in the case of Las Bambas [due to social conflicts], and everything indicates that 2024 will be a good year and we may even see record figures.

In addition to the Peruvian market, we serve the Bolivian market to a lesser extent and occasionally the Brazilian market. For Bolivia, the year started well with higher cargo volumes than in 2023. While Brazil isn’t a significant market at present, we have an active agenda for sending more containers via Matarani, and I believe opportunities will open up with Chancay to create attractive export circuits for them.

BNamericas: What percentage of port movement does each country represent?

Núñez del Prado: Peru represents 92%, Bolivia almost 8%, and Brazil very little. Work is underway on the cabotage law [which will allow international ships to make stops at the country's ports]. The possibility of Brazil having a direct connection to Asia via Chancay is a good option, and this positions Matarani as the most efficient connection port. The issue that will unite us with Chancay will be container movement.

BNamericas: You’ve been operating the port since 1999. How much have you invested in infrastructure and improvements to meet current demand?

Núñez del Prado: We’ve invested US$291mn since 1999 to date, which covers general infrastructure, specialized warehouses, technology, operational support platforms and more. We’ve progressively expanded the port from 14 hectares to 52 hectares.

Although the port's berth occupancy rate closed at 60% in 2023 – and is projected to close at 63% in 2024 [and 67% in 2025] – at Tisur, we’ve been working on a plan for a few years that outlines investments of US$390mn to expand the dock’s capacity, build a new berth, install new cranes and add an additional mineral warehouse.

Even though we have five years left of the first part of the port concession – followed by 30 more – it’s not efficient to present the plan at the end of that period. Significant projects are coming that require a solution, but with occupancy rates of 67% or higher, we could lose competitiveness.

BNamericas: What would it mean to start the expansion after the contract ends and not now?

Núñez del Prado: Work would begin with occupancy above 70% and lots of opportunities, beyond port-related ones, would be lost. There is nearly US$11bn in projects – from mining to agricultural projects like Majes Siguas II – in southern Peru that depend on and/or are related to an efficient port solution. The expansion could reduce the occupancy rate to 45%.

BNamericas: What will be the main components of the expansion?

Núñez del Prado: The main element is the construction of a new dock and the breakwater, with investments of approximately US$119mn and US$40mn, respectively. The new dock will be multipurpose and receive all types of cargo, and the breakwater will provide better conditions for both the future and current docks.

Another aspect is the modernization of the current dock (US$105mn), which will involve rebuilding the longitudinal infrastructure and increasing the draft from 9.75m to 14m.

A new mineral warehouse (US$62mn) is also planned to serve Zafranal. The mining company requires specific infrastructure for the volumes they will handle, and this is likely the first project we’ll start working on. We will also implement new cranes (US$8mn) and general equipment that needs to be renewed periodically.

BNamericas: What is the current timeline for starting these projects?

Núñez del Prado: We expect to receive approval in the first half of next year and immediately begin the corresponding studies. Of the US$390mn, over 70% will be spent during the current concession – until 2029.

The construction of the new dock and breakwater should take us until almost the end of 2027, so we believe the project will be ready to serve Zafranal by 2028.

BNamericas: What are your expectations for the rest of the year?

Núñez del Prado: We expect to close 2024 by moving around 8Mt, which would be the best year in Tisur's history. I believe that handling of all types of cargo has improved in general due to fewer logistical restrictions, better volumes coming from Las Bambas and consolidation of iron ore cargo through our port.

Almost 100% of the fractioned iron cargo destined for Bolivia has been handled by us – it used to go through Arica port in Chile – and we’ll continue working to maintain this and meet the expectations of Bolivian importers.

Of the 8Mt moved, 55% will be mineral concentrate shipments, while the rest will be mainly bulk cargo serving the entire southern region.