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Vale and Cosco in landmark 14 valemax VLOC deal, ends China ban?

Vale and Cosco in landmark 14 valemax VLOC deal, ends China ban?
In a move that would appear to break China’s ban on Vale’s 400,000 dwt VLOCs the Brazilian miner has signed a deal that four valemaxes will be transferred to Cosco and the Chinese company will build 10 more similar vessels.

In a brief statement Vale said it had signed a framework agreement on strategic cooperation with Cosco in Beijing, which would see four 400,000 dwt valemaxes owned by Vale transferred to Cosco and then chartered back by the Brazilian miner for 25 years.

The deal was signed by Murilo Ferreira, ceo of Vale, and Ye Weilong chairman of Cosco Bulk.

Under the agreement Cosco would also build a further 10 VLOCs “of a similar deadweight” for contracts of affreightment with Vale for the transport of iron ore.

The world’s largest ore carriers, built to serve the Brazil – China iron ore trade have been banned from calling Chinese ports, with only two calls made at Chinese ports since the Vale Brasil was launched in 2011. The vessels were banned ostensibly on safety grounds, with the China Shipowners Association particularly strong in its objection to the vessels.

There has been a degree on entente on the issue in recent months with Chinese Ambassador to Brazil Li Jinzhang saying May they had every interest in resolving the matter and then the signing of a port cooperation deal during Chinese President Xi Jinping's visit to Brazil during July.

At present valemaxes, due to the Chinese ban, have to tranship their cargoes from Brazil to smaller vessels either in the Philippines or Malaysia before import of into China. The statement from Vale did not mention if the Chinese ban on the vessels will be lifted.