CHILE: THE NEW LATIN AMERICA BRIDGE TO ASIA

Are you aware that in Latin America the construction of one of the most important infrastructure works is being carried out to increase this region's trade with Asia?

Latin America is developing its first Bioceanic Corridor. A dedicated 2,000km highway connecting the Pacific and Atlantic coasts, and traversing four countries (Chile, Argentina, Paraguay and Brazil).

The process of integration and connection between the central-west of South America and the ports of northern Chile, requires a number of large infrastructure works across the region. This article will focus specifically on how this Bioceanic Corridor is impacting Chile’s ports, their expansion and modernisation plans and what this means for Australian business.

The Bioceanic Corridor will give exporters and importers an alternative route to reach the Asia Pacific. In addition to the already high export volumes from Chile’s mining sector managed by the ports, this will mean a significant increase in cargo and a suite of new logistical challenges for Chile’s ports.

Furthermore, the Chilean government announced earlier this year an investment project for more than two USD billion dollars for the construction of a new port in the Cha?aral area to receive large scale ships from China mainly, to supply the demand of this Bioceanic Corridor.[1]

Four of Chile’s northern ports will be the main beneficiaries of the increase in cargo crossing from the Atlantic to the Pacific: Iquique, Tocopilla, Mejillones and Antofagasta.

These four ports will compete to win dispatch rights and services of the increased cargo. In preparation for this, all four are proactively working towards logistics modernisation for their operations, implementing new technologies in order to accommodate increased volumes by the time the Bioceanic Corridor is planning to become operational in a couple of years. Since the beginning of 2020 its progress on the completion of construction has increased by more than 51%.[2]

Faced with this scenario, the General Manager of the Port of Antofagasta, Carlos Escobar, assured that "Puerto de Antofagasta (Port of Antofagasta, EPA), has all the necessary logistical characteristics to be an important pillar within the Bioceanic Corridor".

As such, the EPA is conducting a roadshow to raise interest from investors in two port expansion projects, thus being better prepared to position itself as the main point of exit to the Pacific.

For the first project, EPA is looking for investors to participate in the public auction of the Frente 1 concession in the Antofagasta Port. The concession term for Frente 1 is until 2033 with no option to extend.

The surface and infrastructure concession area for Frente 1 spans a length of 600 meters and includes three docking sites and a transfer area of 1.2 hectares.

Some of the required investments include: two mobile port cranes, spreaders for handling dump containers, port spring fenders, perimeter closures, connection to the sewer and electric service, and cranes for minor loads and port equipment.

This expansion would enable the EPA to accommodate demand from different types of ships such as bulk carriers, container ships, general and project cargo, cruise ships and smaller ships. The types of cargo that could be transferred include: mineral concentrates (on top of the 3 million tonnes of copper handled annually by EPA), ulexite (mineral), soda ash, lithium salts, ammonium nitrate, project cargo, and general cargo.

The second project is a proposal for the optimisation of the port logistics system in the sector called La Negra, where the main routes and railways connect with the largest mining operations. This is also where the border routes towards Argentina and Bolivia connect with the future Bioceanic Corridor to Brazil.

As such, EPA is inviting investment companies to participate in a competitive process to choose a concessionaire that will develop the construction, financing, operation and transfer of a Logistics Activity Area in Antofagasta for a concession term of 25 years (2 for construction and 23 years for operation).

The master plan for this project includes a logistics area, trucking centre, SME area, Paraguay Free Zone Area, and the availability for more than 200 hectares of development.

Within the services that the concessionaire will have to provide are the logistics area availability, warehousing and logistics services, information and communications technology, cleaning and disinfection, security, food supply, office space renting, service station, business centre, strip centre, transportation services and minimarket.

Australia’s Intermodal Solutions Group –ISG– is an excellent example of how Australian technology has been successfully implemented to support not only Chilean logistics operations in its ports, but also in the rest of Latin America using Chile as their platform for expansion in the region.

ISG, trading as Pit to Ship, are leaders in logistic, storage and ship loading systems for the mining and grain sector.

ISG arrived in Chile in 2012, and since then the business for the company has been a constant growth, becoming an important partner of national ports to increase the efficiency of their operation.

The innovation developed and patented by ISG, a flipping container, the RAM Spreaders and the RAM Revolver, have revolutionised the way cargo was transported from mining operations to ports, which has increased the safety of mining operations and port facilities not only from an operational point of view.

To date, ISG has delivered around 6,000 Container Bulk Handling units in Chile, with Codelco, Sierra Gorda, Coyahuasi, BHP Spence, Empresa Portuaria Antofagasta, Trafigura, and Fepasa being the main clients in Chile.

The ports that have implemented the RAM Revolver in Chile are the Puerto Coquimbo Terminal, Antofagasta International Terminal, Puerto Mejillones, Puerto Angamos, Iquique International Terminal and the RAM Spreaders is practically present in all the ports of America.

Currently ISG operates in Chile, Ecuador, Argentina, Peru, Bolivia, Mexico, USA, Canada, Australia, South Africa, Namibia and Bahrain with offices in Ecuador and Chile in LATAM.

Definitely, the Bioceanic Corridor project will increase the optimisation of port operations in conjunction with the expansions in the ports of Chile, which is good news not only for ISG but for all those Australian companies that can support the logistics industry with their innovations.

If you are interested in obtaining more information and contacting companies in the process of expansion, please do not hesitate to contact Austrade.

In the following links there is more visual information about ISG solutions and official information about the Bioceanic Corridor.

• Descriptive video of the scope of the Bioceanic corridor project in Spanish
• Description of the operating versatility of the RAM Revolver

[1] https://www.infraestructurapublica.cl/corredor-bioceanico-dan-conocer-proyecto-portuario-levantarse-norte-chile-us2-000-millones/

[2] https://portalportuario.cl/corredor-bioceanico-avanza-con-la-ejecucion-del-505-en-todos-sus-subtramos/