Brazilian miner and iron ore producer Vale will save $13 billion due to the review of an iron ore shipping contract with Pan Ocean Co, the latter said.
According to Pan Ocean, the two companies signed on September 22, 2009, a $58 billion iron ore shipping contract, also known as Contract of Affreightment (CoA), for the transportation by Pan Ocean of 238.4 million mt of iron ore from Brazil to China over a 19-year timeline.
Pan Ocean said Vale requested the existing contract to be reviewed.
As a result, estimated sales for Pan Ocean, due to the updated CoA, will decline to $45 billion thanks to bunker fuel oil prices.
Pan Ocean said the terms of the contract, except for the declined sales for Pan Ocean, remain the same, including freight, cargo quantity and other contractual terms.