China ministry says to bar giant ships from ports

SHANGHAI Tue Jan 31, 2012 6:56am EST

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SHANGHAI (Reuters) - China will no longer allow large ships exceeding approved capacities to dock at its ports, the Ministry of Transport said, effectively snuffing Brazilian miner Vale SA's hopes of sending its mega-ships to China.

Ships exceeding approved capacities were previously assessed on a case-by-case basis, but the ministry said in a statement on its website on Tuesday that giant dry bulk vessels and oil tankers were prohibited with immediate effect.

The statement comes just a month after Vale managed to unload its 388,000-tonne vessel Berge Everest at Dalian port -- swiftly drawing an outcry from the influential China Shipowners Association, which has been actively lobbying Beijing to ban Vale's giant iron ore carriers.

At present, no Chinese ports have regulatory approval to receive dry bulk carriers of more than 300,000 tonnes and industry sources have said Berge Everest's entry to Dalian's Port was likely a bureaucratic fluke since one-off permissions for such large ships could be issued by provincial authorities.

The transport ministry said its decision to bar giant ships was in part a result of the severe downturn in the shipping industry as well as maritime safety issues.

With Beijing keeping its ports closed to Valemax very large ore carriers, the Rio de Janeiro-based miner will have to rely on a costlier transshipment hub in the Philippines to supply the world's biggest iron ore consumer.

The China Shipowners Association and steelmakers have said that Vale's fleet of giant iron ore carriers could be a "Trojan horse" that would allow the miner to monopolize the shipping and iron ore markets at China's expense.

China Shipowners Association Executive Vice-President Zhang Shouguo is also a former deputy director of the water transport division of the Ministry of Transport.

(Editing by Chris Lewis)

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