Chinese shipowner China Merchants Energy Shipping has secured a 25-year transport agreement through wholly owned Hong Kong Ming Wah Shipping covering six VLOCs for Guinea’s Simandou iron ore project, with the contract expected to be worth at least $2.8bn.
Hong Kong Ming Wah signed the long-term transportation agreement with an unnamed iron ore trading company. The customer’s identity was withheld under Chinese disclosure exemption rules and the terms agreed between the two parties.
The contract marks Hong Kong Ming Wah’s first step towards deeper participation in Simandou. Revenue will be recognised over the 25-year term, with no material impact expected on current-period profit and only a limited effect on the company’s financial position and results in any single year.
The agreement had been outlined in a July 21 company filing as a proposed 25-year contract of affreightment with a Chinese mineral resources supply-chain company holding shipping rights for Simandou ore. Hong Kong Ming Wah had already transported about 600,000 tonnes of mineral cargo linked to the project.
The planned freight mechanism was tied to a relevant Baltic Exchange route index, with an additional cost-adjustment mechanism.
CMES separately plans six 343,000-dwt VLOC newbuildings with investment capped at CNY4.93bn ($735m at the current exchange rate), for delivery in 2029 and 2030. The September contract filing does not explicitly identify those newbuildings as the six vessels covered by the transport agreement.
Simandou is an open-pit hematite project in southeastern Guinea with about 4.4bn tonnes of proven high-grade iron ore containing more than 65% iron. The project is designed for capacity of up to 120m tonnes per year and began production and ore shipments in November 2025.
China Merchants Energy Shipping Co Ltd, established in 2004 and affiliated with China Merchants Group, operates tanker, LNG, dry bulk, ro-ro and container shipping businesses.
Hong Kong Ming Wah Shipping Co Ltd was established in Hong Kong in 1980 and is CMES’s specialist dry bulk shipping management company. Its operations include the group’s VLOC business.