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Vale to sell eight VLOCs to Cosco and CMES

Vale to sell eight VLOCs to Cosco and CMES
Brazilian miner Vale has sold four Valemax VLOCs to Cosco, and has moved forward on a plan to sell four units to China Merchants Energy Shipping (CMES).

Vale announced on Tuesday it had concluded the deal with Cosco to sell four 400,000 dwt vessels valued at $445m, it also signed an expanded cooperation agreement with CMES.

The Brazilian mining giant said the sale of the VLOCs to Cosco is related to a previously disclosed agreement signed with Cosco in September 2014. In late-April this year, Cosco’s board of directors approved the cooperation framework with Vale.

The Cosco-Vale agreement centered around a 25-year contract of affreightment (COA) where Cosco will build and operate 10 VLOCs, and purchase four from Vale.

The four mega-sized bulkers are expected to be delivered to Cosco in June this year.

Vale also signed a new cooperation agreement with CMES, expanding from a first framework agreement signed back in September 2014.

“According to the expanded agreement, Vale will sell four existing VLOCs to CMES. The detailed terms and contract conditions are still under discussion and the deal with CMES is expected to be concluded in the coming months,” Vale said.

The September 2014 agreement between CMES and Vale was that the Chinese shipowner would order 10 VLOCs for a 25-year COA with Vale.

Vale’s expanded cooperation with the major Chinese shipping groups came as the mining firm faces challenges in securing access for its giant bulk carriers at Chinese ports.

The China Shipowners’ Association (CSA) has vehemently opposed the calling of VLOCs at Chinese ports, citing operational safety issues, as well as criticised Vale for trying to monopolise the seaborne transportation of iron ore sold to China.