Vale S.A. - a Brazilian mining and metals corporation and one of the largest logistics operators in Brazil - plans to convert its fleet of very large ore carriers (VLOCs) to run on liquefied natural gas (LNG), according to
Stephen Potter, the company's director of strategic planning.
Speaking at a mining conference last week, Potter said the company's new '
Valemax' ships would cut Vale's production costs and were 35 percent less carbon intensive than the capesized vessels traditionally used in the bulk commodity industry.
"Our new generation of large ships are very important, it is probably our biggest opportunity to reduce carbon dioxide emissions in our value chain," Potter said.
"We do it for money as well, they are much more competitive. Brazil faces a desperate disadvantage compared to Australia being on the other side of the world from China," he added.
On the issue of bunker fuel, Potter remarked: "We hope to take it further, we are hoping to convert our vessels to LNG."
Agreements with Cosco and China Merchants Group
Earlier this month, Vale and the
China Ocean Shipping Company (Cosco) - the largest dry bulk carrier in China and one of the largest dry bulk shipping operators worldwide - signed a framework agreement for strategic cooperation in iron ore shipping.
Under the agreement, four existing 400,000-deadweight-tonne (dwt) VLOCs owned and currently operated by Vale will be transferred to Cosco and chartered by Vale on a long-term basis for 25 years. In addition, both firms are to enter into a similar long-term contract of affreightment which will be serviced by ten VLOCs of similar deadweight to be built by Cosco for the transportation of iron ore from Brazil.
The deal will allow extra large ships to carry Vale's iron ore into Chinese ports under a plan that is designed to cut unit costs through economies of scale and the use of modern, cleaner, more efficient technology.
In addition to the Cosco contract, on Friday Vale signed another framework agreement for strategic cooperation in iron ore shipping with
China Merchants Group - a state-owned corporation headquartered in Hong Kong.
The two organizations agreed to enter a contract of affreightment for a period of 25 years which will be serviced by ten VLOCs to be built by China Merchants for the transportation of Vale's iron ore from Brazil to China.
Image: The ore carrier Vale Brasil
