As U.S. Fortunes Wither China Becomes A Dominant Player In Countries Worldwide, Including The Tiny South American Country Of Peru

by John Tidwell
June 18, 2008

The Chinese mining company Chinalco (www.chinalco.com) has agreed to acquire the Peruvian village of Morococha for the equivalent of $3 billion USD. You see, the copper mine Toromocho is directly underneath this impoverished little town and the only way to access the vast copper deposits is to relocate all of the Morococha residents to a nearby valley. Many of the depressed villagers have already sold their homes to the government for the $2,000 asking price, however there is a large group of dissidents who don't approve of the relocation. That's okay. In this new game of global consumption, China's cash dominance is helping industrial players within the country to gobble up natural resources and ship them back to the mainland where the appetite for oil, copper and success is matched only by its sheer size. And that little mining company, Chinalco, no one ever heard of stands to earn a profit of over 2,000% on its $3 billion investment.

Mount Toromocho is 15,000 feet (4,600m) and 86 miles (138km) from Lima, Peru, the capital. Toromocho means "The Bull With No Horns". This piece of real estate is made up of copper ore and lots of it. Approximately two billion tons to be precise. What makes Toromocho so special is that this could be the largest deposit of copper ore on the planet. What also makes Toromocho unique is that the copper and the profits will not be going to countries like United States. Instead, this precious metal is headed for China.

Chinalco's extraction costs will be $410 USD per ton. At last count, copper was trading at over $8,250 per ton. That's a multiple of 20!

Would Peru like to deal with companies from the U.S., Canada and other countries? Yes, however no country has the cash to make a deal for Toromocho like China. Raw materials are in high demand and they previously went to feed the United States consumption machine. No longer. Large amounts of the world's natural resources are now being diverted to China, hungry to consume and the power of cash to make heavy handed deals.

China's thirst to acquire the global supply of natural resources encompasses virtually every continent in the world. China is also striking alliances with fellow communist countries Russia and Cuba. Consumption has now changed. Before the world worked and manufactured to supply the United States. Ridddled in debt and bureacracy, the United States can no longer compete against this formidible free market competitor. Yes, the times have changed and it's only the beginning.