Vale, China in talks to build 50 giant bulk carriers — report
Iron ore giant Vale (NYSE:VALE), the world’s No. 1 producer of the steel-making material, is said to be negotiating the manufacture of 50 giant bulk carriers with Chinese shipbuilders.
According to Wall Street Journal, the Rio de Janeiro-based miner aims to increase its fleet of mega ships, the world's biggest bulk ore carriers, to transport iron ore from Brazil to China.
The newspaper added that China Cosco Holdings, ship financier Shandong Shipping Corp., ICBC International Leasing Ltd. and China Merchants Energy Shipping are all involved in the ongoing negotiations.
Vale's carriers were barred from China from Jan. 2012 to Sept. last year, due to rules preventing ships of more than 250,000 dwt in capacity from docking at mainland ports.
In February, Beijing finally amended rules around vessels allowed to berth at its harbours, paving the way for the entry of Vale's giant ships, known as Valemaxes, which can carry up to 400,000 deadweight tons.
Vale's inability to dock its iron ore carriers at Chinese ports had stymied its efforts to reduce freight costs and to compete with Australian based-rivals like BHP Billiton (ASX:BHP) and Rio Tinto (LON:RIO), which are closer to China.
If the shipbuilding deal rumour were confirmed, the order would be the largest in history for this kind of massive ore carriers.