Cosco to order 10 VLOCs for Vale

Mining giant Vale has revealed a pact with China’s Cosco to build 10 huge new bulkers, signalling a potential shift on China’s Valemax ban.

The company said in a statement that a deal had been signed on Friday in Beijing that creates a “strategic” framework agreement for cooperation in iron ore shipping.

The first part of the pact will see four existing 400,000-dwt very large ore carriers (VLOCs) transferred from Vale ownership to Cosco and chartered back over 25 years.

The value of that deal will not be revealed until after it closes, Vale said.

Cosco will then order 10 new vessels for charter back to Vale on similar terms, for the transport of Brazilian ore.

The TradeWinds newspaper reported on Thursday that a political and commercial resolution of China’s ban on Vale’s massive ships was on the cards

It involves the construction of new ships by Cosco and China Merchant Energy Shipping (CMES) for life-long charter to Vale.

It is thought part of the deal is that both state-owned companies would do their best to persuade Chinese government officials to lift the Valemax ban. The ban is generally ascribed to Cosco’s influence, so such a promise would presumably be a valuable one.

Some sources are convinced the ban will be lifted by the end of next month but others point out that an imminent end to the Valemax restriction has been predicted several times already.

Sources on both sides of the long-running Cosco-Vale conflict had been pointing of late to progress in negotiations, and now believe Cosco’s willingness to give up its long opposition to the Valemax fleet may have been promoted by the entry of CMES — increasingly the initative taker among Chinese state-owned shipping companies.

CMES was also a player in another recent big-fleet transaction involving the Sinotrans-controlled Nanjing Tankers VLCC fleet.\

source:www.tardewindsnews.com