June 20, 2009
Bulker orders: New twist in Vale tale
Reuters is reporting that Chinese shipbuilder Jiangsu Rongsheng Heavy Industries has won a $484 million deal to build four ships for Oman Shipping Co. The report says that they will carry exports from an iron ore pellet plant being built by Brazil's Companhia Vale do Rio Doce in northern Oman and expected to begin production in the second half of 2010. The Reuters report cites an the official from Oman's Tender Board as saying "the vessels will be delivered by the end of 2011 or beginning of 2012 and will be chartered to Vale for its exports."
This marks an interesting development in the saga that started last August when Vale reported that it entered into a $1.6 billion contract with Rongsheng for the construction of twelve very large ore carriers, each with a capacity of 400,000 dwt.
Ever since the newbuild bulker market went bad, various European sources have been predicting that the Vale order was set for cancellation. Thus far that hasn't happened.
Details of the Oman deal were first released in November after Oman Shipping Company (OSC) signed a framework agreement with Vale to lease four 400,000 dwt ships for transporting ore pellet from the extraction areas in Brazil to the industrial complex in Oman's Sohar Port.
At that time, Adel bin Abdullah al Raisi, Managing Director of OSC said "though it has been established not long ago OSC now has a fleet of giant ships ; all of them are leased with long term contracts and used in transporting LNG, oil and oil derivatives. A new sector has been added to the scope of the operation of the vessels namely transporting iron ore pellet from Brazil."
All of this would seem to indicate that the four ships are being leased from Vale by OSC and are part of the original dozen announced back in August and not four more.