Peru’s Volcan, China’s Cosco seal deal for Chancay port

Peruvian zinc-silver miner Volcan and China Cosco Shipping completed a transaction whereby the Chinese firm became the majority shareholder in a  US$3bn port facility to be build near Lima.

Shanghai-based Cosco bought a 60% stake in Volcan’s Terminales Portuarios Chancay unit, Lima-based Volcan said in a corporate filing to securities regulator SMV. The US$225mn transaction was originally announced in January.

The two companies will invest US$1.3bn in a first stage, Volcan said. The multi-purpose port terminal on 141ha of land 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.

The 28-month project, which will create around 9,500 jobs, follows work on ports at Pisco and Salaverry and expansions at Matarani, Paita and Callao’s Muelle Sur and Muelle Norte piers.

Peru’s exports rose 8.1% to a record US$48.9bn last year, led by US$28.9bn in metals sales, also a record. Imports rose 8.2% to US$41.9bn.

The port will make Chancay a regional hub to handle cargo from the Asia-Pacific , President Martín Vizcarra said at a contract signing ceremony in the presidential palace, which was attended by the ministers of finance, transport and communications and foreign relations.

“We are attending an act of confidence in the country’s present and future,” President Vizcarra said at the ceremony. “When we see this kind of investment, we see that we're on the right track. This kind of investment commits the government to joint action.”

While port construction is ongoing, the transport ministry will move ahead with a 1.5bn-sol (US$US$500mn) highway to link Chancay to the mining areas of Oyón and Ambo, Vizcarra said.

Latin America and the Caribbean need to invest US$55bn in port expansions as cargo demand triples to an estimated 150MTEUs per year and handle larger ships by 2040, according to Caracas-based multilateral lender CAF.