By Ruby Lian and David Stanway
SHANGHAI Jan 22 Vale SA, the world's
second-largest mining company, is considering setting up an iron
ore distribution centre in a southern Chinese port where
Baosteel is building a 10 million tonne-per-year
steel project, industry sources said on Tuesday.
Baosteel, China's leading steelmaker, and Zhanjiang port
signed a memorandum of understanding with Vale in early December
during a visit to the mining giant's headquarters in Brazil,
said one source with direct knowledge of the matter.
"This is just a very initial idea. The distribution centre,
if built, can meet demand from small clients which may not be
able to buy a whole cargo of iron ore but can buy a small
volume," the source said.
Vale's spokeswoman in China declined to comment. Baosteel
and the Zhanjiang government were not immediately available for
Baosteel Group expects to complete construction of the
Zhanjiang steel project by 2015.
The distribution centre would improve Vale's access to its
top market China, which has not allowed the company's giant iron
ore carriers, or Valemaxes, to berth at its ports after one
vessel docked at Dalian port in December 2011.
Vale built the Valemaxes to slash shipping costs to China,
the world's largest importer of iron ore, and better compete
with Australian rivals BHP Billiton and Rio
The vessels have, however, faced stiff opposition from
influential Chinese ship owners who fear the miner will use the
ships to monopolise both the shipping and iron ore markets at
Vale has already built a floating iron ore storage vessel at
the Philippine-based Ore Fabrica, which serves as a platform to
transfer iron ore from Valemaxes to smaller vessels for
transport to China and other Asian destinations.