Valemax leaving one of Brazil's top ports.(Image from archives)
Iron ore giant Vale (NYSE:VALE), the world's No. 1 producer of the steel-making material, is said to be negotiating the manufacture of 50 giant bulk carriers with Chinese shipbuilders.
According to the Wall Street Journal, the Rio de Janeiro-based miner aims to increase its fleet of mega ships, the world's biggest bulk ore carriers, to transport iron ore from Brazil to China.
Related: How Shale Is Becoming The .COM Bubble Of The 21st Century
The newspaper added that China Cosco Holdings, ship financier Shandong Shipping Corp., ICBC International Leasing Ltd. and China Merchants Energy Shipping are all involved in the ongoing negotiations.
Vale's carriers were barred from China from Jan. 2012 to Sept. last year, due to rules preventing ships of more than 250,000 dwt in capacity from docking at mainland ports.
In February, Beijing finally amended rules around vessels allowed to berth at its harbors, paving the way for the entry of Vale's giant ships, known as Valemaxes, which can carry up to 400,000 deadweight tons.
Related: Low Oil Prices Could Destabilize Financial System
Vale's inability to dock its iron ore carriers at Chinese ports had stymied its efforts to reduce freight costs and to compete with Australian based-rivals like BHP Billiton (ASX:BHP) and Rio Tinto (LON:RIO), which are closer to China.
If the shipbuilding deal rumor were confirmed, the order would be the largest in history for this kind of massive ore carriers.
By Cecilia Jamasmie of Mining.com
More Top Reads From Oilprice.com:
MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry… More