Vale signs off 20-year deal on shipping ore from Brazil to China

BEIJING – One of the deals expedited by Chiense Premier Li’s visit to Brazil is between Brazilian miner Vale and China Cosco Holdings regarding transport of iron ore to China: Vale said in a statement that it had “completed the sale of four very large ore carriers to China Cosco Holdings for US$445 million and reached an agreement to sell another four to China Merchants Energy Shipping”.

Operating the four ships sold to Cosco will be China Ore Shipping, a newly formed joint venture between China Cosco Holdings and China Shipping Development, under a 20-year freight contract with an option to extend for another five years.

This represents a reversal of fortune for the Brazilian miner: According to China Customs data, Vale’s market share in China has gone down, with 18% of China’s imported ore coming from Brazil last year (compared to 21% in 2010). During the same period, Australia’s share increased from 43% in 2010 to 58% last year. www.webershandwick.com (ATI).