For more than ten years, China has established itself as Peru’s main trading partner, managing in the last 30 years to place investments of more than US$17 billion in strategic sectors such as mining and hydrocarbons. Also in the electricity sector and the port area.
Mining has been the main industry to which Chinese capital has directed its investments since its arrival in Peru. According to the Ministry of Energy and Mines (Minem), the mining company Chinalco Perú SA, controlled by Aluminum Corporation, operator of Toromocho, is the company in this area that has invested the most in the country, with an amount greater than US$5,603 million between 2011 and 2022.
For its part, Las Bambas, acquired by Chinese shareholders in 2014, has made investments that exceed US$4,741 million until last year. Likewise, Shougang Hierro Perú has allocated US$2,925.7 million between 1993 and 2002 to its initiatives in Peruvian territory. On a more recent level, the mining company Shouxin Perú SA has placed US$106 million between 2020 and 2022.
Chinese companies in the mining portfolio
The portfolio of mining projects is made up of 47 initiatives, of which seven are managed by companies with Chinese capital, representing a little less than 20% of the total projected investments in the sector, according to Jorge Manco Zaconetti, professor at the Faculty of Economic Sciences of the Universidad Nacional Mayor de San Marcos.
The main project in progress is the expansion of Toromochowhose construction began in 2018 and will extend until 2024, with an estimated investment of US$1,355 million, as well as the expansion of Shouxin for US$140 million between 2021 and 2023.
Among the projects that have yet to define a start date are Chalcobamba Phase I (US$130 million), Don Javier (US$600 million), El Galeno (US$3,500 million), Pampa de Pongo (US$2,344 million) and Río Blanco (US$2.5 billion).
This segment also includes the first stage of construction of the multipurpose port terminal of Chancaywhose 60% is in the hands of Cosco Shipping Ports Limited, which together with the Volcan mining company disbursed US$3.4 billion, according to official Minem figures.
Investments in hydrocarbons
Another sector that concentrates a large percentage of Chinese investments in Peru is hydrocarbons with more than US$3,752 million.
In detail, CNPC Perú SA, whose plan to abandon Lot .2 million in Lot 58.
Besides, accumulated an investment of more than US$292 million in Lot 57. While the China National Petroleum Corporation invested around US$2.6 billion in November 2013 for the acquisition of 46.16% of Lot 58 and 100% of Lots X and 58.
On the other hand, Sapet Development Perú, also a subsidiary of the CNPCmade an investment of US$271 million in Lot VI/VII between 1994 and 2021.
In this regard, Jorge Manco Zaconetti stressed in the conversation on Geopolitics and Chinese investments in Peru that these disbursements were possible thanks to the flow generated by the production itself.
Domain in the electrical sector
On September 30, 2019, Chinese investments jumped into the electricity sector with the purchase of 83.3% of the shares of Southern Light by the state-owned China Three Gorges Corporation for an amount that amounts to US$3.59 billion.
From the year following the acquisition until 2022, the company has invested US$345,582.
According to the San Marcos expert, although Luz del Sur has currently lost a large part of its own clients, it continues to be a fairly profitable company.
In 2020, the first year under Chinese administration, recorded US$902.2 million in operating income with an operating profitability greater than 24%; In 2021 the figure reached US$884.7 million and last year it reached US$1,020 million.
On the other hand, in April of this year, the Southern Power Grid company, also of Chinese origin, completed the acquisition of assets from Enel Perú for an amount of US$2.9 billion.
Although the closing of the operation is still pending authorization from the IndecopiJorge Manco highlights that the acquisition is already a fact, supported by previous antecedents.
“Electricity distribution in Lima will come under Chinese control,” he comments.
Likewise, the professor warns that the Chinese presence is not limited only to electricity distribution, but also covers the generation of electricity with various plants throughout the country.
China’s commercial importance
The Chinese economy is the second most important in the world and according to some studies it could become the first world economy in 2045 after surpassing the US, maintains Carlos Alberto Aquino, director of the UNMSM Center for Asian Studies.
Furthermore, it highlights that the Asian superpower is the main exporter and importer globally, being the main trading partner of more than 50% of nations.
Humberto Campodónico, professor of Economic Sciences at UNMSM, details that China concentrates a large part of Latin American debt. Among the countries with the most debt, it mentions Venezuela (US$60,000 million), Brazil (US$31,000 million), Ecuador (US$18,000 million) and Argentina (US$17,000 million).
Data
Canyon. Shougang Hierro Perú generated a total of US$976.4 million in mining royalties in Ica between 1992 and 2022.
Volume. Last year, The Bambas It produced 254,838 tons of copper and 3,532 tons of molybdenum, in both cases it was lower than in 2021.
Source: Larepublica
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