Peru miner Volcan, China's Cosco to build US$3bn Chancay port

Peruvian zinc-silver miner Volcan and China Cosco Shipping signed an agreement to build a US$3bn port facility near Lima.

Cosco will acquire a 60% stake in Volcan's Terminales Portuarios Chancay unit for US$225mn, Lima-based Volcan said in a corporate filing to securities regulator SMV.

The multi-purpose port terminal project, located on 141ha of land about 50km north of Lima on the Pacific coast, will involve 11 docks in a container terminal and four docks for a general and rolling cargo terminal in a US$1.3bn first stage, Volcan said.

The deal was signed at the World Economic Forum in Davos, President Martín Vizcarra said. The project will be able to handle Triple E-class ships, said Vizcarra. Triple E-class ships are 400m in length and can carry more than 18,000 TEUs.

"The proposal is to generate a hub for the entire Pacific and aims to work together with Callao to improve port services across all of South America on the Pacific coast," Vizcarra said in a statement.

Shanghai-based Cosco is one of the world's largest shipping companies, handling 104mn TEUs in 2018.

The project follows work on ports at Pisco and Salaverry and expansions at Matarani, Ilo, Paita and Callao's Muelle Sur and Muelle Norte piers, as Peru seeks to expand its facilities to handle growing exports of minerals, hydrocarbons and fishmeal.

Latin America and the Caribbean need to invest US$55bn in port expansions as cargo demand triples to an estimated 150mn TEUs per year by 2040, according to multilateral lender CAF.

Volcan invested US$22.4mn in the Chancay project through 3Q18, according to the company's earnings statement.