April 25, 2013 / 6:08 PM / in 5 years

UPDATE 1-Vale says giant Valemax ships gain access to Asian ports

* Valemax ship that docked in China was no fully loaded

* Vale opened second floating transfer ship in Philippines

* Malaysia on-land ore distribution center to open in 2014

By Jeb Blount

RIO DE JANEIRO, April 25 (Reuters) - Brazil’s Vale SA said it has increased access of its “Valemax” iron ore carriers to Asian ports and has even docked one of its ships in China where a ban on the giant vessels has been in effect for more than a year.

The Vale Malaysia docked at China’s port of Lianyungang April 15 and left April 17 after unloading its cargo, Reuters reported on April 18. The 402,285 deadweight tonne (dwt) ship, one of the world’s largest bulk freighters, was only partly loaded, Jose Carlos Martins said on Thursday.

Martins made the comments in a conference call to discuss Vale’s first quarter financial results, released late Wednesday. Profit fell 18 percent in the quarter from a year earlier but beat expectations.

The company is counting on the giant ships to help slash costs of shipping ore to China, the world’s largest iron ore market, and compete with Australian rivals BHP Billiton Plc and Rio Tinto Plc, whose mines are closer to Chinese customers.

China banned the Brazilian miner’s mega ships in early 2012 over alleged safety concerns. Most of the vessels were built in China with Chinese government finance. A Korean-built Valemax developed a hull crack on its maiden voyage.

The ban was also made to protect China’s own ocean-freight industry as a glut in vessels dragged down global shipping rates. No bulk cargo vessels of more than 300,000-dwt have clearance for Chinese ports under the ban.

Before this week, the last time a Valemax entered a Chinese port was in late December 2011 when the 388,000-dwt Berge Everest called at the port of Dalian in what shipping sources said then was probably a fluke. Deadweight tonnes refers to the amount of passengers fuel and cargo a vessel can carry. The Valemaxes decks are big enough to hold up to three regulation size soccer pitches.

The 35 Valemax vessels afloat or under construction — the last is scheduled for delivery this year — can reduce transport costs by up to a third and produce far fewer greenhouse gasses. Vale owns part of the fleet and has given third-party owners long-term contracts to ship ore with the rest.

In April, Vale opened a second floating iron ore distribution station in the Philippines to keep the Valemax ships working despite the Chinese ban and to make sure Valemax ore can move to ports that are not deep enough or properly equipped to handle them.

The stations, floating bulk freighters with ore-moving equipment, can transship ore from the Valemaxes to smaller vessels for the final trip to Asian ports. Vale is also working to open new ports to Valemax ships in Japan and Korea.

The company’s permanent iron ore storage and distribution center in Malaysia is expected to start operations early in 2014, Martins said.

Vale preferred shares, the company’s most-traded class of stock, rose 2.7 percent to 34.48 reais and its common shares rose 2.2 percent to 32.80 reais.

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