Brazilian mining group’s giant ore carrier soon to enter service

13th May 2011 By: Keith Campbell - Creamer Media Senior Deputy Editor

The world’s biggest-ever bulk ore carrier – more precisely designated a Very Large Ore Carrier (VLOC) – the Vale Brasil, will soon be carrying iron-ore from Brazil to Asia along the Cape route around South Africa. Built by Daewoo Shipbuilding & Marine Engineering, it is the first of seven VLOCs being built by the South Korean company for the Brazilian mining group in a $748-million programme, and it arrived in Brazil early this month, prior to entering service.

The Vale Brasil and her six sisters will each be able to carry 400 000 t of iron ore, divided between seven holds, on each voyage. The dimensions of ships of this class are length: 362 m and beam: 65 m, while, from the keel to the mast, the height is 56 m.

In comparison to the Vale Brasil’s length, the Eiffel Tower, in Paris, is 324 m tall while Rio de Janeiro’s famous Sugar Loaf is 396 m high. The South African Navy’s Valour-class frigates are each 120 m in length, so three of them could line up, bow to stern, alongside the VLOC, while the Heroine-class submarines, with a length of 62 m, are shorter than the Vale Brasil’s width.

The Vale Brasil’s main engines develop 25 000 kW, giving a maximum speed of 15 knots (nautical miles per hour) – roughly 28 km/h. She and her sisters will reduce carbon emissions per ton of ore carried by 35%. They will also noticeably cut the cost of transporting iron-ore from Brazil to East Asia.

They will operate out of Vale’s export terminals in the ports of Ponta da Madeira, in the state of Maranhão, and Tubarão, in the state of Espírito Santo. It is reported that the Chinese ports of Dalian and Dongjiakou are expanding their facilities to accommodate these giants. Vale is also said to be constructing facilities in Oman and Malaysia which will be able to take its new VLOCs, and where they will be able to transship their cargoes to smaller vessels for further distribution to customers in the Middle East and Asia.

This is only the start of Vale’s new supership era. The company also has another 12 VLOCs, also each with a 400 000 t ore transport capacity, on order from Chinese company Rongshen Shipbuilding & Heavy Industries, in a programme costing $1,6-billion. In addition to these 19 giants which Vale will own and operate itself (Vale is also a logistics group, and has long operated railways, ports and ships), the company will have the exclusive use of another 16 ships of the same capacity which will be owned and operated by partner shipping companies under long-term contracts. All 35 of these VLOCs will be delivered by 2013 and will take the total fleet owned by, or exclusively assigned to, Vale to 60 ships. (It is not clear if this figure includes smaller, support vessels operated by Vale, such as tugs.)

Vale’s fleet of VLOCs will slash its shipping costs to China. Back in 2008, the mining group was, it seems, paying more than $100/t to ship iron-ore to China that was priced at $80/t. Even today, the cost of shipping iron-ore from Brazil to China means that Vale’s product is $15/t more expensive than iron-ore from Australia. Vale’s new fleet of VLOCs will cut this cost difference by more than 50%, to $7/t. The company is confident that the higher quality of its iron-ore will compensate for the remaining price differential with the Aus-tralian product. In December, some analysts told the Reuters news agency that the new VLOCs would allow Vale to increase its share of the Chinese market, but that Australia would remain the number one supplier to what is now the world’s second-biggest economy.