Brazilian iron ore mining company Vale has ordered 12 very large ore carriers from Jiangsu Rongsheng Heavy Industries Co Ltd, each with a capacity of 400,000 dwt, for $1.6B.
Delivery of the first vessel is expected in early 2011 and the order is due to be completed by 2012.
The company says that it aims to boost business with the fast-growing Asian market, and that the order will help it reduce its shipping costs. It will also make its ore more competitive with nearer Australian and Indian ore for the fast-growing Chinese steel industry, already the world's largest.
Eduardo Bartolomeo, Vale's executive director for logistics, said that the large vessels would help Vale, which shed its sea transport operations in 2001, to address logistics shortcomings and better compete with global rivals such as BHP Billiton and Rio Tinto.
The carrier programme adds to Vale's previously announced global investment programme of $59B for 2008-12, as it aims to boost iron ore output by 50% to 450 mt by 2013.
Vale has said it planned to ship more than 100 mt of iron ore to China in 2008 under term contracts, a rise of 10% from 2007. China's crude steel output this year is forecast to rise about 10% to 550 mt.
The fleet will be able to carry an estimated 30.2 mtpa of iron ore from Brazil to Asia, equivalent to 31% of the company's shipments to China in 2007, Vale said.
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