Brazil Vale Signs Iron Ore Transport Accord With China Merchants Group

By Rogerio Jelmayer

SAO PAULO--Brazilian mining giant Vale S.A. (VALE, VALE3.BR, VALE5.BR) said Friday it signed a stragtic iron-ore cooperative shipping agreement with China Merchants Group, one more step in its efforts to improve its iron-ore shipments to China.

"Vale and China Merchants agreed to enter a contract of affreightment for a period of 25 years which will be serviced by 10 very large ore carriers to be built by China Merchants for the transportation of Vale's iron ore from Brazil to China," the Brazilian company said.

Earlier this month, Vale signed a deal with state-owned China Ocean Shipping (Group) Co. to cooperate on iron-ore shipping.

As part of the deal, Vale agreed to transfer four existing very large ore carriers, each with a deadweight of 400,000 metric tons, to Cosco Group, the parent of Hong Kong-listed shipping firm China Cosco Holdings Ltd. (1919.HK). Vale will charter, or lease, the ships for 25 years. These vessels, known in the industry as Valemax ships, are the biggest dry-bulk ships ever built.

Write to Rogerio Jelmayer at [e-mail]

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