(Photo: Flickr/Frank_Am_Main)
by Rachel Chase / Peru This Week
China’s interest in Peru continues to mean substantial investments in mining.
According to Gestión, China currently accounts for more than 24% of all investment in the sector, with approximately US$13.8 billion invested in mining.
Companies from the United States constitute the second-largest investment bloc in Peruvian mining operations, with a total of US$9.95 billion. This accounts for 17.3%, of the investment total, Gestión writes. Canada is a close third, with US$9.65 billion in investment.
Though Chinese-owned mining properties are already abundant, Gestión speculates that the for-sale Las Bambas Project (currently owned by Swiss company Glencore Xstrata) could very well get picked up by Chinese investors. That purchase would potentially raise total Chinese investment to US$19 billion, which would constitute one third of total investment in Peruvian mining.
But why is there so much Chinese investment in Peruvian mining? Gestión writes that China’s interest in Peruvian mining properties is driven by their large population. Economist Carlos Aquino told Gestión that there is a huge demand for minerals in China, due in part to the high rate of urbanization and rapid construction in the nation. Quite simply, China needs minerals that it does not have within its own borders, so it is forced to invest abroad.
