From grand infrastructure projects to intermediate mineral processing, China has embraced an ambitious economic strategy that would propel the People’s Republic towards a central role on the Latin American continent, writes Ricardo Zedano, Head of Media Relations and Foreign Trade Adviser at the Peru-Russia Chamber of Commerce and Industry Development.
Prior to its accession to the World Trade Organization (WTO), China spent many years seeking access to Latin American markets. The country wagered not on the quality of exported goods and services, but on the massive quantity of exports, which negatively affected the initial emergence of Chinese brands in the region.
The EU and US, in the hope that they would be managing all financial and economic developments unfolding in China, and the country’s overall trajectory, facilitated its accession to the WTO on 11 December 2001. However, they miscalculated: when it comes to Latin America, by that point China had already established strong relations across all spheres with its diaspora communities in the region. Beijing acquired more knowledge about the rules of trade and business, began gathering the necessary data, processing it, and drawing conclusions; the country formulated a strategy to increase its presence in Latin American markets.
Within the framework of this strategy, the first quarter of the twenty-first century was characterised by a gradual expansion of China’s presence through increased economic activity by Chinese companies in Latin America. The average annual growth in trade between 2001 and 2024 amounted to 18.5 percent. The People’s Republic of China confidently displaced traditional partners from the region and increased its share of total regional trade turnover to 17-18 percent. For individual states, including such major economies as Brazil, Chile, and Peru, it simultaneously became both the largest export market and the principal supplier of imported goods.
The strategy took into account not only commercial factors but also the cultural, social, and psychological characteristics of the peoples of each individual Latin American country. In Peru, for example, the People’s Republic of China hit the mark. During 2007-2008, under President Alan García—whose presidency was marred by corruption allegations—an agreement signed between the Chinese state-owned metallurgical company Chinalco and the Government of Peru enabled China to acquire what is potentially the richest copper deposit in the world. This refers to Mount Toromocho (translated from Spanish as “Bull Without Horns”). The mountain, located 138 km from Lima and rising 4,600 metres above sea level, consists almost entirely of copper ore with average contents of 0.4 percent zinc, 0.03 percent molybdenum, and 12 g/t silver. According to expert estimates, copper ore reserves in the mountain amount to an impressive two billion tonnes. At the time, this acquisition was one of the largest Chinese investments in Latin America.
Investment in the Toromocho copper mining project (2007-2013) exceeded USD 4.3 billion. The project also involved relocating the old town of Morococha to a newly built settlement, Nueva Morococha. Residents of the struggling old town received small houses or flats in the new location.
The transaction is regarded as “highly beneficial” for both countries. The Peruvian government, in urgent need of funds to revitalise its economy, received substantial financing from China, while the Chinese side gained yet another opportunity to displace other regional players, such as the United States, expanding its regional influence by utilizing a favoured instrument in its foreign policy toolkit—economic ties.
It should be noted that China leads investment in Peru’s mining sector, with at least seven major projects under development—Pampa de Pongo, El Galeno, Chalcobamba, Don Javier, Reposición Ferrobamba, Río Blanco, and the expansion of Toromocho—and holds a significant share of national copper and iron production, thereby consolidating its position as the principal foreign investor in the Peruvian mining industry.
Beyond mining, the PRC has invested more than USD 1.5 billion in the construction of the largest port in Latin America, located 80 km north of Lima in the city of Chancay.
The eponymous mega-port is the first logistics hub in South America under Chinese control. The Chinese logistics company COSCO Shipping holds a 60 percent stake in the project. Total investment amounts to USD 3.4 billion.
To complete the supply chain for mineral exports from Peru to China, China Power Construction is building a railway costing USD 420 million, connecting central mining areas to the Port of Chancay. As the world’s largest consumer of minerals, China has begun applying a similar export scheme in Brazil, with Brasilia’s roster of trade partners being more diverse than that of Australia or Africa.
Chinese investment in Brazil’s mining sector is substantial and strategically important, primarily focused on iron, copper, nickel, and other minerals critical for industry and the energy transition.
Chinese companies such as HBIS Group Co., Ltd (formerly Hebei Iron & Steel Group), Baowu Steel Group—the world’s largest steel producer—Zijin Mining Group, China Minmetals Corporation / China CITIC Group, Tianqi Lithium, Ganfeng Lithium, and Ningbo Shanshan Co. have entered the Brazilian market mainly through:
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Full or partial acquisition of operating mines or promising projects (for example, Zijin, HBIS).
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Joint ventures with Brazilian giants such as Vale (for example, Baowu in niobium).
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Offtake agreements: Chinese banks and companies provide loans to Brazilian mining firms—including Vale in the past—in exchange for long-term contracts to purchase a substantial share of production. This ensures supply stability without direct operational control.
In recent years, the emphasis has shifted from iron to “minerals of the future”: copper, nickel, lithium, graphite, and niobium—essential for batteries, renewable energy, and high-technology sectors.
Chinese investment in strategic and critical minerals—often referred to as rare earth elements—in Brazil represents an area of explosive growth and high geopolitical priority. By encouraging its companies to acquire overseas assets, the Chinese government seeks to diversify and secure supplies of these vital resources for high-tech industries, the energy transition, and continued economic development.
Interest in rare earth elements is significant, although projects remain at the exploration or early development stage. Brazil possesses the world’s second-largest potential reserves of rare earth elements after China, particularly in monazite deposits, which also contain thorium, a radioactive element.
The principal Chinese companies active in Brazil’s raw materials sector include Shenghe Resources Holding and China Northern Rare Earth Group—the most significant players in the country. Shenghe has a strategic marketing and potential investment agreement with the Brazilian company Mineração Serra Verde, which is developing one of the most advanced rare earth mining projects outside China in the state of Goiás. The project is unique in that it enables the economically viable production of a full spectrum of heavy and light rare earth elements.
These companies do not necessarily acquire deposits outright but rather secure supply through offtake agreements—forward purchase contracts—thus gaining control over the end product without assuming all operational risks. This approach is a common Chinese tactic.
Xiamen Tungsten, China Molybdenum (CMOC), Zijin Mining Group, Tianqi Lithium, Ganfeng Lithium—the two largest lithium producers in the world—CATL (Contemporary Amperex Technology Co. Limited), Ningbo Shanshan Co., BTR New Material Group, and Baowu Steel Group / CMOC have conducted research on rare earth elements, mine nickel, cobalt, gold, copper, and platinum, acquire stakes in Brazilian exploration projects and small mining companies, and make strategic investments in lithium projects in Brazil, securing direct supply for their gigafactories
Through the activities of these companies, China is transitioning from the status of the largest buyer of Brazilian minerals to that of owner or key financial partner of mines, seeking not merely to invest in extraction but to control intermediate processing stages—such as converting lithium into carbonate or graphite into anodes—where the greatest value is captured. It is establishing multiple entry channels into the Brazilian market through direct investment (CMOC, Zijin), joint ventures (Baowu), and supply-financed agreements (Shenghe), among other mechanisms.
As in Peru, China is making railway construction efforts in Brazil—it intends to connect Brazil and Peru through a railway that would facilitate resource exports via the Peruvian Port of Chancay.
Brazil has adopted a cautious stance regarding participation in China’s Belt and Road initiative, primarily for geopolitical and economic reasons. One key factor is the influence of the United States in the region, as Brazil seeks to maintain strong relations with Washington, a key ally that views BRICS as an extension of China’s strategic push for global influence.
However, the situation is evolving. As Brazil deepens its relationship with China, the administration of Luiz Inácio Lula da Silva has shown greater openness to the possibility of joining the initiative. Lula’s return to power has revived debate over its potential benefits, particularly in green energy, technology, and infrastructure.
On 7 July 2025, the Government of Brazil and the China Academy of Railway Sciences signed an agreement to study the feasibility of constructing the Brazil—Peru Bi-Oceanic Corridor—a railway linking the Atlantic and Pacific Oceans across South America.
The agreement provides an analysis of opportunities to connect the Port of Chancay in Peru (Pacific coast) and Brazil’s railway network via the FIOL, FICO, and North-South lines, passing through the Brazilian states of Acre, Rondônia, and Mato Grosso. The total length of the corridor would be approximately 4,500 kilometres.
According to Brazil’s Ministry of Social Communications, the project aims to facilitate South American countries’ access to Asian markets, particularly China, by improving transport connectivity between the two oceans.
Thus, in advancing its strategy in Latin American markets, China has relied on large-scale investment in regional infrastructure projects and increased exports of goods and services. It seeks to establish itself as a major actor in Latin America by strengthening control over strategically important sectors of Latin American economies—primarily the raw materials sector—and, as practice demonstrates, this strategy has proved highly effective.
