Vale is making headway in its search for a new generation of ore carrier by selecting four companies in Asia with which to work.
Multiple shipbuilding sources said the mining giant has selected South Korea’s HMM and Pan Ocean, and China’s Cosco Shipping Bulk and China Merchants Energy Shipping.
Sources said a total of 24 shipping companies — one South American, one Middle Eastern, four European and 18 Asian owners — participated in Vale’s Guaibamax tender.
Vale is said to be looking to employ up to a dozen 325,000-dwt ore carriers that will be able to run on both methanol and conventional marine fuel.
The Rio de Janeiro-based company will be taking the new ships under long-term contracts of affreightment (COAs).
The new methanol dual-fuel Guaibamax vessels are part of the firm’s “innovative project to increase the flexibility of its fleet and to foster GHG [greenhouse gas] emissions reduction solutions”.
In December 2022, Vale’s technical manager Rodrigo Bermelho told TradeWinds that the COAs would be for 25 years.
“We are hearing they will go for six firm vessels initially and the remaining six are options,” said a shipbuilding source.
The number of newbuildings that each company will be ordering for Vale is not known, but sources said the ore carriers will be constructed in China.
Vale previously said the dual-fuel ships will feature many of the efficiency technologies including five sails on each vessel.
Altogether, the ships will be able to reduce greenhouse gas emissions by 23%, compared to the Guaibamax vessels on the water today.
The new vessels formed part of the research-and-development initiative by the company’s shipping division to cut carbon emissions in line with International Maritime Organization targets.
Vale believes the combination of the alternative fuel and wind equates to a 90% reduction in well-to-wake greenhouse gas emissions, if it can procure green methanol.
Shipbuilding sources said Yangzijiang Shipbuilding, Hengli Heavy Industry, state-owned Shanghai Waigaoqiao Shipbuilding, Guangzhou Shipyard International and Qingdao Beihai Shipbuilding Heavy Industry are competing for Vale’s project.
They said the Chinese shipbuilders are offering 2027 delivery slots for the 325,000-dwt ore carriers.
Brokers estimate Vale’s methanol dual-fuel ore carrier newbuildings are likely to cost in excess of $140m each.
“The high shipbuilding price includes the installation of the rotors…Vale has also made provisions to have the ships for possible retrofit of tanks to LNG and ammonia,” said one source.
Vale is one of the world’s top three minerals producers, and according to its latest market update released on 18 July, its iron ore production during the first half of 2023 increased 6% year on year to 145.5m metric tonnes.
It expects to produce between 310m and 320m metric tonnes of iron ore for the full year in 2023.
The company is also one of the world’s largest bulker charterers. It is said to fix on average 500 large bulk carriers per year.
TradeWinds has requested comment from the Brazilian iron ore giant.
