Aluminum Corp of China (Chinalco) has made another overseas investment this year, committing
US$2.16 billion for the Toromocho copper mine in Peru. The investment, which is being funded by
China Development Bank, was increased from the initially planned US$1.5 billion. The mining
operation will become Peru’s largest copper mine, and is expected to increase the country’s
exports by 25%. Peru already ranks 3rd worldwide in copper production, while China ranks 1st in
copper consumption. The Toromocho copper mine is located approximately 85 miles from Lima,
Peru, and expects to produce over 210,000 metric tons of copper annually by 2012, with
estimated reserves to last for roughly 30 years.
Investment between Latin America and China has become increasingly common as ties between
China and the region have strengthened in recent years. In 1978, China invested a mere US$200
million dollars in the region, but by 2000 that figure had risen to US$10 billion. According to the
Commerce Ministry of China, by the end of 2006, China’s direct investments abroad surpassed
US$90 billion, and 25% of that was directed towards Latin America. At present, Chinese
enterprises are engaged in approximately 30,000 projects in the region.
In related news, earlier this year Chinalco offered US$14 billion for a stake in mining giant, Rio
Tinto. Chinalco also signed agreements with Malaysia’s MMC Intentional Holdings Ltd and Saudi
Binladin Group for investment in a Saudi Arabian aluminum project. The total investment of US$
4.5 billion will include aluminum production and electricity generation facilities, in which Chinalco
will own a 40% and 20% stake, respectively.