Brazilian iron ore giant Vale SA has said that it has taken delivery of the world's biggest iron ore carrier, a 400,000 mt capacity vessel built in South Korea by Daewoo Shipbuilding & Marine Engineering Co.
The new vessel, named "Vale Brasil", is the first of seven ore carriers ordered by Vale from the South Korean shipyard in an investment totaling $748 million, Vale said. Vale also stated that it has ordered 12 very large ore carriers, each with capacity of 400,000 mt, from the Rongsheng Shipbuilding and Heavy Industries shipyard in China. These vessels, being built at the Chinese shipyard, represent a total investment of US$1.6 billion.
In 2010, more than 60 percent of Vale's iron ore output was shipped to Asia, where it competes with ore from Australia. Iron ore freight rates from Brazil to China, Vale's single biggest customer, are typically double the cost of freight rates between Australia and China.
"With our own fleet and chartered ships we reduce exposure to volatility in the freight market," said Vale's executive director of marketing, sales and strategy, Jose Carlos Martins. "Volatility does not only affect freight costs but also the price of iron ore. As the new ships start to operate, stability of freight and iron ore will become even greater, helping Vale and its steel industry clients," Martins added.
Besides 19 very large iron ore carriers, Vale will also have 16 other ships with the same dimensions - 362 meters long and 65 meters wide- which will operate exclusively for the company under long-term contracts signed with shipowner partners. These 35 ships will be delivered between 2011 and 2013, Vale said.