China Access for Vale's New VLOCs 'Within Months'

The 400,000 dwt Valemax vessels are the largest bulk carriers ever built

Brazil's Vale S.A. (Vale), expects to win permission to unload its massive new iron-ore ships at Chinese ports "within months", according the Vale’s Chief Financial Officer, Tito Martins.

"The big vessels are here to stay, this is a technical thing...It’s going to happen soon."

The metals and mining multinational says the very large ore carriers (VLOCs) will help it compete with Australian ore producers such as BHP Billiton and Rio Tinto whose proximity advantage means they have roughly half the product transportation costs.

China has been reluctant to grant the 400,000 dwt Chinamax sized vessels access to its ports and the China Ship owners' Association (CSA), whose members control some 80% of China's shipping capacity, has questioned the safety of the mega ships.

On its maiden voyage, the Vale Beijing, one of the first of the VLOCs, was discovered to have a cracked hull and a ballast tank leak.

There are also concerns that Vale could use the huge volumes of the massive ships to undermine the country's control of imports.

The new VLOCs, also known as Valemax class vessels, are being built by Rongsheng Heavy Industries Group Holdings Ltd (Rongsheng) and will be more efficient, using less fuel per tonne carried.

Vale, the world's largest iron-ore producer delivering some 250 million metric tonnes of sea-borne iron-ore exports a year, hopes to have a fleet of 35 VLOCs by the end of 2013 at a cost in excess of $4 billion.

Rongsheng Chief Executive Officer, Chen Qiang, has said they plan to deliver up to 10 of those vessels this year.