Vale’s Milestone: First VLOC Reaches China

Brazilian mining giant Vale SA cleared a major (and long awaited) hurdle today.  The BERGE EVEREST, one of the VALE’s massive VLOC’s, has finally done what it was built to do; transport nearly 400,000 tonnes of iron ore from Brazil to China.  The BERGE EVEREST reached the Dalian port in China sometime on Wednesday and is now unloading its cargo, a process that is expected to take 2 1/2 days.

Getting to China has been a tough battle for Vale and its 400,000 tonne very large ore carriers, the largest ships in the world.  The vessels have encountered tough opposition from Chinese shipowners and influencers for fear that the massive vessels will cripple China’s own shipping industry.  In June, Vale’s first delivered VLOC, the VALE BRASIL fully loaded and destined for China, was turned around somewhere in the middle of the Indian Ocean at China’s demand and forced to call on an Italian port instead.

Since then, Vale has been squared off with Chinese officials including the highly influential China Shipowners Association (CSA), who control 80% of China’s shipping capacity and think the very idea of the Vale-owned fleet is an intention to monopolize or at least control a majority of China-bound iron ore transportation.

An incident involving the Vale Beijing, which was damaged at berth while preparing for its maiden voyage, has lead to further speculation about whether or not Vale’s $8.1 billion investment, which includes a total of 35 of the behemoths, is strategy that is going to pay off.  That incident involving the VALE BEIJING is still being investigated.  Vale meanwhile remains confident despite these hurdles.

Why China let the BERGE EVEREST in is still unclear.

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