RIO DE JANEIRO, May 2 (Reuters) - Brazilian iron ore mining giant Companhia Vale do Rio Doce (CVRD) VALE5.SA (RIO.N) said Wednesday it entered into a 25-year freight contract with B.W. Bulk, part of the Norwegian BW Group, to expand its Chinese trade.
The contract involves the construction of four ore carriers, each with a capacity of 388,000 tons deadweight (dwt), which CVRD said would be the world’s largest ore vessels. The first carrier is due to start operating in 2011.
It is one of several contracts announced by CVRD to reduce freight costs and increase exports to China, its major iron ore customer.
“These initiatives focused on the development of a dedicated shuttle service to carry iron ore from Brazil to China,” CVRD said in a statement.
CVRD, the world’s biggest iron ore miner, said it also entered into a 20-year contract with Nippon Yusen Kaisha Japan for a 300,000 dwt ore carrier which is also due to be delivered in 2011.
And CVRD signed a separate contract with B.W. Bulk to convert a very large crude carrier (VLCC) into a very large ore carrier (VLOC) to start a Brazil-China shuttle service in 2008.
CVRD added it had revoked its plan to sell its fleet of three Capesize vessels.
The world’s largest ore carrier is currently the 364,000 dwt Berge Stahl which was built for CVRD by B.W. Bulk, one of the world’s leading owners of VLOCs, CVRD said.