Bloomberg News

Vale Say It’s in Advanced Negotiations to Sell 19 Vessels

December 09, 2011

Dec. 9 (Bloomberg) -- Vale SA, the iron-ore producer building a fleet of the world’s largest commodities ships, confirmed it’s in advanced talks to sell 19 of the vessels after the plan spurred opposition from Chinese ship owners.

Rio de Janeiro-based Vale Chief Executive Officer Murilo Ferreira has said he is willing to sell the ships only if the company can lease them back under long-term contracts, according to a Vale official who declined to be named, citing internal policy. The talks were reported earlier by the O Globo newspaper, which cited an interview with Ferreira.

Vale is spending at least $8.1 billion on the so-called valemax vessels, including buying 19 very large ore carriers and leasing another 16 in long-term contracts, as at seeks to lower freight costs from Brazil to China, its biggest market. The China Shipowners Association, whose members control about 80 percent of the nation’s shipping capacity, advised companies not use the vessels, according to Executive Vice Chairman Zhang Shouguo. None of the six vessels already in operation since April have called at Chinese ports.

Vale gained 1.1 percent to 38.92 reais in Sao Paulo at 2:48 p.m. The stock has declined about 20 percent during 2011.

--With assistance from Michelle Wiese Bockmann in London. Editors: Charles Siler, Jessica Brice

To contact the reporter on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net


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