Sao Paulo, Brazil, 13 Sept – Brazilian mining giant Vale has announced it will take on loans of US$1.23 billion from Chinese banks to fund construction of 12 cargo ships for transporting iron ore from Brazil to China.
According to a market statement, the loans granted by the Bank of China and by the China Export-Import Bank (Eximbank) will cover 80 percent of the project, will have a 13-year maturity and will be paid out over the next three years.
Vale, a large state company that was privatised in 1997, also said that the new ships would become part of its cargo fleet in order to provide a “shuttle” service between Brazil and China and also establish distribution centres in Asia in order to better serve its customers.
In August 2008, Vale, which sells most of its iron ore to steel makers in China, contracted Chinese company Rongsheng Shipbuilding and heavy Industries, of Jiangsu, to build 12 cargo ships, which will be partially paid by loans.
Each of these cargo ships will have capacity to transport 400,000 tons of ore and their delivery will take place between the beginning of 2011 and the end of 2012. (macauhub)