Nippon Yusen Kaisha, Japan’s largest ship operator, is on the verge of signing a long-term contract of affreightment with Brazil’s largest mining company, Vale.
According to sources, NYK will sign a 20-year contract, requiring the operator to haul 1.3m tonnes of iron ore annually from Brazil to China beginning in 2012.
NYK will order a new very large ore carrier dedicated to fulfilling the contract, which will involve four to five round trips per year between Brazilian and Chinese ports.
NYK signed an almost identical contract with Vale in 2007, which also required the company to order a new dedicated VLOC. NYK will begin iron ore deliveries under that contract in 2010.
NYK is thought to be paying in the region of ¥19bn ($200.2m) for the two VLOCs, but combined revenue from the contracts is said to be as much as ¥4bn annually.
Over the past year or so, Vale has increasingly pushed toward greater self reliance in terms of its transport needs by buying new and secondhand tonnage, most notably with its order for 12 VLOCs worth a combined $1.6bn at Jiangsu Rongsheng shipyard in China. The vessels are scheduled for delivery in 2011 and 2012.
According to sources, NYK will sign a 20-year contract, requiring the operator to haul 1.3m tonnes of iron ore annually from Brazil to China beginning in 2012.
NYK will order a new very large ore carrier dedicated to fulfilling the contract, which will involve four to five round trips per year between Brazilian and Chinese ports.
NYK signed an almost identical contract with Vale in 2007, which also required the company to order a new dedicated VLOC. NYK will begin iron ore deliveries under that contract in 2010.
NYK is thought to be paying in the region of ¥19bn ($200.2m) for the two VLOCs, but combined revenue from the contracts is said to be as much as ¥4bn annually.
Over the past year or so, Vale has increasingly pushed toward greater self reliance in terms of its transport needs by buying new and secondhand tonnage, most notably with its order for 12 VLOCs worth a combined $1.6bn at Jiangsu Rongsheng shipyard in China. The vessels are scheduled for delivery in 2011 and 2012.