Vale Seals VLCC Deal with China Merchants

zoom Brazilian mining giant Vale S.A. (Vale) and China Merchants Energy Shipping Co. Ltd. (China Merchants), a state-owned shipping operator, concluded today the sale and purchase of four very large ore carriers (VLCCs) of 400,000 tons deadweight owned and currently operated by Vale. The transaction is related to the previously disclosed agreements celebrated with China Merchants on September 26, 2014 and May 19, 2015; the latter signed during the visit of China’s Prime Minister Li Keqiang to Brazil in May 2015. The transaction totaled USD 448 million will be received by Vale upon the delivery of the vessels to China Merchants, which is expected to happen in September 2015, Vale said. The announcement comes in the wake of the arrival of the first fully-laden Valemax at a Chinese port over the weekend after the 2012-ban on Valemaxes was partially lifted in China. The 400,315 dwt Sohar Max entered North China’s Dongjiakou port, without making the usual stops at Vale’s transshipment hubs in Subic Bay, the Philippines, or Malaysia’s Teluk Rubiah. China’s Ministry of Transport and the National Development and Reform Commission issued a notice on July 2nd, approving berthing of 400,000 DWT Valemaxes at some of Chinese ports. Specifically, the VLCCs will be able to berth at seven berths in Dagushan port area of Dalian, Caofeidian port area of Tangshan, Dongjiakou port area of Qingdao and Ningbo’s Majishan terminal and Shulanghu terminal.