Vale's huge iron ore ship back in service after maiden accident

Mon Jul 16, 2012 4:56am EDT

* Ship damaged while loading first iron ore cargo in Dec last year

* Vale Beijing due to arrive in Brazil port on Aug. 8

* China port readying berths to receive up to 40,000 T vessels

By Joyce Lee and Randy Fabi

SEOUL/SINGAPORE, July 16 (Reuters) - Vale Beijing, one of the world's largest dry bulk carriers, is back in service seven months after being damaged while loading its maiden cargo, amid indications that China eventually plans to allow similar huge vessels to dock at its ports.

The Dec. 6 accident at the Brazilian port of Ponta da Madeira was a major setback for Vale SA, the world's second-largest mining company, in its campaign to cut freight costs to China using an unprecedented fleet of 35 Valemax very large ore carriers (VLOC).

Chinese shipowners, who fear Vale's large ships will push them out of the market, used the incident to successfully lobby Beijing to ban the vessels the following month because of safety concerns and their potential threat to the domestic maritime industry.

China's transport ministry in May approved plans to build berths for iron ore vessels of up to 400,000 tonnes at its eastern Ningbo-Zoushan port, an indication Beijing may eventually lift its ban on Vale's ships.

"We believe some ports are preparing themselves in the form of dockside equipment and dredging to be able to receive the ships without any qualifications," said Janet Lewis, a shipping analyst with Macquarie Securities. "There seems to be some pressure from the steel industry to push from it. I think you will eventually see it allowed."

Shipping data showed the 400,000-deadweight-tonne ship, owned and operated by STX Pan Ocean Co Ltd, was due to arrive at the Brazilian port of Ponta da Madeira on Aug. 8 after completing repairs at a South Korean shipyard. The reason for the accident was still unclear.

"Vale Beijing underwent repairs and inspection between late April and late June and is now running smoothly," said a spokesman for STX Pan Ocean, which is due to deliver six more mega ships by the end of 2013.

China's ban has forced Vale to transport iron ore to China via a trans-shipment hub in the Philippines. Vale, the world's top iron ore exporter, will also open a hub in Malaysia in 2014 and is considering projects in South Korea and Japan.

The first and only Valemax allowed into China, the 380,000-tonne Berge Everest, docked at Dalian port in December last year. (Editing by Chris Lewis)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

A tourist takes a plunge as she swims at Ngapali Beach, a popular tourist site, in the Thandwe township of the Rakhine state, October 6, 2013. Picture taken October 6, 2013. REUTERS/Soe Zeya Tun (MYANMAR - Tags: SOCIETY) - RTR3FOI0

Where do you want to go?

We look at when to take trips, budget considerations and the popularity of multigenerational family travel.   Video