15 July (Lloyd's List) - CHILE is inviting China to gain another foothold in South America by joining a $4.5bn expansion plan for the port of Arica.
A group of officials from Chile’s Arica and Parinacota region visited China recently, pitching an ambitious proposal to transform the small port, currently handling a cargo throughput of 6m tonnes, into a megaport with at least 100m tonnes of capacity.
Located on the northern coast of Chile, the port of Arica is a gateway for trade between South America and the Pacific Rim, while also connecting the landlocked countries of Bolivia, parts of Brazil and Paraguay to international markets.
With such a prime geographical location, this port has the potential to serve a population of 300m in the future, Juan Pablo Godoy Aguilera, vice-president of the Territorial Development Corporation, a unit within the Regional Government of Arica and Parinacota, told Lloyd’s List during his visit in China.
“We are open to all countries and we offer political stability for global investors.”
Aguilera said that Arica’s exports currently go mainly to Asia, and future exports, especially minerals, will likely continue heading to this region. This is why they are actively seeking Asian investors for the port expansion.
The invitation came after the recent resolution of a dispute regarding Cosco’s exclusive operating rights at a terminal under construction in Peru, amid growing concerns from the US and Europe over China’s rising influence in Latin America.
Promotion of the $4.5bn port project just started and the local government expects the construction to begin in the next five years.
In addition to serving Chilean exports, mainly lithium and borax, Arica also acts as Bolivia’s sole seaport for exports, he said, noting while the port has already supported its neighbouring country’s export of oil and natural gas, its current capacity is inadequate to accommodate the export of mining goods.
Bolivia is home to the world’s largest lithium deposits, estimated at 23m metric tons, official data showed.
South America’s so-called lithium triangle, which encompasses north western Argentina, western Bolivia, northern Chile, and the southernmost part of Peru, holds nearly 60% of the world’s known lithium resources, as estimated by the US Geological Survey.
The Chinese consortium CBC, which includes battery giant CATL, signed an agreement with Bolivian state-owned YLB in January 2023 to invest $1bn in building two lithium extraction plants with a combined production capacity of about 200,000 tonnes per year.
These plants are expected to start operation and begin exporting lithium in the first quarter of 2025.
“The government will provide full support for the port expansion project,” Aguilera said, “The red carpet is ready for investors.”
