Brazilian iron ore miner Vale has ordered a dozen of the largest class of ore carriers from a Chinese shipbuilder for $1.6 billion.
Vale, the world’s largest iron ore miner, expects the huge vessels to reduce shipping costs and make its ore more competitive with nearer Australian and Indian ore for the fast-growing Chinese steel industry, already the world’s largest.
Vale said it ordered 12 very large ore carriers from Jiangsu Rongsheng Heavy Industries, each with a capacity of 400,000 deadweight tonnes. Delivery of the first is expected in early 2011 and the order is due to be completed by 2012.
The carrier program adds to Vale’s previously announced global investment
program of $59 billion for 2008-12, as it aims to boost iron ore output by
50% to 450 million tonnes by 2013.
Vale plans to ship more than 100 million tonnes of iron ore to China in 2008 under term contracts, a rise of 10% from 2007. (The illustration is of one of the massive engines it uses to transport the ore.)
China’s crude steel output this year is forecast to rise about 10% to 550 million tonnes.
Source: Reuters