The construction of Chancay Port began after a 2019 agreement between Volcan Compañia Minera S.A.A., a Peruvian mining company, and COSCO SHIPPING Ports Ltd., a Chinese state-owned company and the world’s second-largest container port operator. COSCO acquired a 60% equity stake, forming the joint venture CSP Chancay. In March 2023, CSP Chancay secured a USD 975 million syndicated loan, collateralised against nearly all project assets.  

This loan marks a shift in Beijing’s overseas lending strategy under the Belt and Road Initiative (“BRI”) 2.0, transitioning from sovereign-backed loans to limited-recourse project financing. A mining director insisted, “Peru’s economy is completely open to foreign investment, and we are confident that it will diversify as we implement the right reforms and manage our policies correctly.” The source continued, “This is not about limiting Chinese participation in our economy to avoid control but about ensuring that our economic ‘pie’ grows with the participation of diverse investors.” 

Since 2010, China has provided USD 16 billion in loans to develop Peru’s vast copper, silver and zinc reserves. Chinese-backed mines include Minera Las Bambas, producing 2% of the global copper supply and the Toromocho and Marcona projects. Chancay Port strengthens China’s supply chain, facilitating the export of these minerals and also provides a faster route to Chinese markets at a time when minerals are essential for advanced technologies.  

Meanwhile, the US seeks to counter China’s dominance, recently signing a Memorandum of Understanding (“MoU”) with Peru to enhance cooperation in mining. “The US largely overlooked its relationship with Peru, allowing Chinese companies to steadily acquire key assets while US-backed firms were the ones divesting and moving capital out of the country,” informed the mining director.  

“The US largely overlooked its relationship with Peru, allowing Chinese companies to steadily acquire key assets, while US-backed firms were the ones divesting and moving capital out of the country.”

Mining company director, Peru

This pattern has left China with a dominant foothold in Peru’s strategic sectors, particularly mining and infrastructure. “Western companies prioritise their short to medium-term results, as opposed to government-sponsored Chinese companies that plan for decades and are willing to handle the risk of temporary drawbacks to gain control of strategic resources,” cited a consumer goods company CEO. “The US may have woken up to the competition, but it risks being too late to change the game.”

Under a 2021 agreement, COSCO was initially granted exclusive operating rights at Chancay. However, Peru’s National Port Authority (“APN”) later contested this, fearing reduced competition. Chinese lenders intervened, arguing that a multi-operator model would hurt CSP Chancay’s financial viability. Eventually, Peru amended legislation to allow exclusivity but limited it to 30 years. 

Chinese President Xi Jinping and Peruvian President Dina Boluarte have already inaugurated the first stage of the Port. At the end of last year, Congress passed the Bill on Special Private Economic Zones, an initiative designed to attract both domestic and foreign investment. The bill establishes designated zones offering special regulatory, tax and logistical benefits, positioning them as key drivers of economic growth.

While the legislation marks a significant step forward, concerns remain about its execution. A mining company director expressed scepticism, _“_The real challenge isn’t passing the bill—it’s implementing it effectively. Unfortunately, with this administration’s incompetence, we’ll have to wait for the next government to get it right.” 

_“_The real challenge isn’t passing the bill—it’s implementing it effectively. Unfortunately, with this administration’s incompetence, we’ll have to wait for the next government to get it right.”

Mining company director, Peru

Chancay is just one piece of a much larger puzzle—its true impact hinges not only on strong governance, but transparent leadership to break free from the region’s longstanding struggles with corruption and political inefficiency. “The risk, while not uncommon in this country, remains disorganised. The full potential can only be achieved through continued development of multimodal logistics infrastructure.” The industry leader highlighted, “Chancay’s strategic location is a game-changer, but without the right infrastructure, its full potential will remain untapped.” 

Beyond Peru, Chancay is poised to revolutionise regional trade, strengthening cabotage networks between major South American ports—including Chile, Ecuador and Colombia—and extending its reach to Central America. Its influence is also drawing interest from Brazil, Argentina and Bolivia, which see the port as a crucial node for accessing Asian markets. “This isn’t just Peru’s project—it’s a gateway for the entire region to China and beyond,” surmised a logistics executive.