Fortescue orders larger iron ore ships to reduce costs

Australia-based miner Fortescue Metals has announced that it has taken another significant step towards reducing its costs and securing the supply of efficient seagoing vessels with the signing of a contract with a Chinese shipyard for the construction of four very large ore carriers (VLOC) valued at around US$275 million. The vessels will be delivered from November 2016 through to May 2017 with the majority of payments made upon delivery and funded from operating cashflows.
 
The 260,000 dwt class vessels, which will account for approximately six percent of Fortescue's shipping fleet requirements, are much larger than the traditional capesize vessels that have dominated the seaborne market and incorporate design specifications ideally suited to Port Hedland's tidal conditions.