Brazil-based iron ore giant Vale expects to get permission from the Chinese government "within months" to unload its new 400,000-deadweight-tonne mega iron ore vessels at Chinese ports, said Tito Martins, Vale's chief financial officer, interviewed by Reuters.
While Vale needs these mega vessel to compete with Australian ore producers such as BHP Billiton and Rio Tinto, in terms of freight rates, China considers Vale vessels as a threat to the country's shipping and iron ore markets since Vale will be able to control both markets.
The Vale CFO stressed that they are not targeting domination of the shipping business, stating that most of the vessels are operated by third parties and Vale is in talks to sell the vessels the company operates itself. Vale is planning to build 35 mega iron ore vessels by the end of 2013, at a cost of about $4.2 billion.
Martins indicated that the delay in granting approvals for Vale vessels to enter Chinese ports is about technical conditions, adding that they are waiting for "Chinese ports to be adapted to receive" the large size vessels. So far, only one of Vale's mega vessels, Berge Everest, has been permitted to unload in China, at the Port of Dalian.
Vale is the world's largest iron ore producer and supplies more than a quarter of the world's approximately 1 billion mt a year of seaborne iron ore exports.