BRASÍLIA: Brazilian mining giant Vale has signed a 20-year iron ore and manganese ore shipping deal with Hong Kong Ming Wah Shipping, a subsidiary of China Merchants Energy Shipping, but it remains unclear when the shipments will start, a CMES official said Tuesday.
Under the deal signed Friday, HKMW will ship 390,000-mt cargoes at total annual volumes of about 6 million mt. Freight rates will depend on volume, landing port and crude prices.
The deal gives Vale an option to extend for five years.
In May, HKMW committed to ordering 10 new very large ore carriers, or VLOCs, for Vale’s shipping.
The CMES official did not know the status of the orders, and HKMW officials could not be reached for comment.
The shipping agreement follows a July 30 deal between Vale and CMES under which Vale will transfer four VLOCs to CMES for $448 million. That deal was set to close by this week.
Vale has been actively pursuing iron ore shipping and blending and distribution centers in China since the government approved Vale’s VLOCs to land at seven ports in July, market sources said.
Vale is in the process of selecting more than one Chinese port for blending and distributing, Claudio Alves, global sales director for Vale’s ferrous division, said at a recent iron ore conference in Qingdao, China.
The miner is expanding its iron ore capacity to 450 million mt/year by 2017, from 340 million mt/year for 2015.
Despite an economic slowdown and steel oversupply, China is expected to remain the world’s top iron ore buyer and the largest destination for Vale’s added iron ore capacity in the near term.
Shipping activity at Port Qasim on February 11
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