Brazil and China have signed a landmark agreement to begin a five-year feasibility study for a massive 2,800-mile railway linking Brazil’s Atlantic coast to the Pacific port of Chancay in Peru. The proposed rail corridor, if built, would transform South American trade by creating a direct overland route to Asia, potentially cutting shipping times by up to 12 days compared to current routes through the Panama Canal.

The memorandum of understanding, made public on Monday, was signed by Brazil’s Infra S.A. and China Railway Economic and Planning Research Institute. The study will explore technical, economic, and environmental aspects of the project, which is estimated to cost over $70 billion—making it one of the most ambitious infrastructure projects in the continent’s history.

The railway would begin in Ilhéus, Bahia, pass through the Amazon and the Andes, and terminate at Peru’s rapidly expanding Chancay port. However, the route presents major challenges, including environmental concerns in sensitive regions like the Amazon rainforest and complex engineering requirements across mountainous terrain.

The announcement follows increased China-Brazil cooperation, with Chinese delegations recently inspecting key Brazilian rail lines (Fico and Fiol) and port facilities, including the Port of Santos, Latin America’s busiest port and a site of ongoing Chinese investment.

While no final commitment to construction has been made, both nations see the corridor as a strategic step toward boosting trade, enhancing export competitiveness, and diversifying global supply chains.

As feasibility work begins, regional cooperation—including Peru’s full participation—will be key to the project’s success.