Cosco to transport iron ore for Vale
September 30, 2014 Category Logistics, Ports & sea transport
China Cosco Holdings has signed a landmark deal with Brazilian miner Vale for the transport of iron ore and the purchase of 14 very large ore carriers, which have been barred from entering Chinese ports since early 2012. The two companies had agreed on a contract lasting up to 25 years for China Cosco to ship iron ore for Vale. To fulfill the contract, China Cosco will buy four Valemax vessels – giant ore carriers with a capacity of 400,000 DWT – and build 10 more. In 2009, Valemax vessels were ordered at USD120 million each, indicating China Cosco’s purchase could cost more than USD1 billion. As China had banned Valemaxes from docking at its ports, since 2012 two-thirds of the Valemax fleet have gone through Subic Bay, in the Philippines, for transshipment, discharging cargo to smaller capsize vessels, which have a capacity of 180,000 DWT, for the final journey to China. If the ban is indeed lifted, it could actually be positive for the shipping market, according to James Leake, Managing Director at London-based Arrow Research. About 11 Chinese ports are capable of receiving Valemax vessels.
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