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Vale looking to sell Valemax iron ore carriers - Report

Steel News - Published on Thu, 22 Dec 2011

Vale is looking to sell off its large iron ore carriers amid fierce opposition from Chinese ship owners and embarrassing teething problems as the second largest mining company shifts its focus back to core projects.

Mr José Carlos Martins Vale executive director for iron ore and strategy said that the Brazilian company would sell its so called Valemax most of which have not yet been built, if it could take long term leases on them.

The multi billion dollar plan to control shipments to China by building 35 ships with decks the size of three football fields the biggest dry bulk carriers ever was dreamt up by Mr Roger Agnelli, Vale former headstrong chief executive but it has faced heavy criticism since.

None of the new carriers has been able to dock in China, Vale biggest market, because of opposition from local Shipowners and technical difficulties while a mysterious leak aboard the Vale Beijing on its maiden voyage this month has raised safety concerns.

The move to sell the ships also comes as Mr Murilo Ferreira Vale new more cautious and diplomatic chief executive is reviewing spending on all projects to help strengthen the company finances in the face of falling commodity prices.

Mr Martins said “It’s really all about capital allocation. We prefer to invest our capital in mining and contract the ships instead, declining to comment on whether negotiations were already under way. There is no reason we actually have to own them.”

Vale began placing orders in 2008 for the 35 Valemax of which it planned to own 19 in an attempt to control the price it paid to move its iron ore to China after years of wild gyrations in charter prices. Rates per day for capsize ships the largest dry bulk carriers reached as high as USD 233,988 per day in June 2008 but subsequently plummeted by December that year to as low as USD 2,400.

(Sourced from

Posted By : admin on Thu, 22 Dec 2011
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