Vale to Offload Its Remaining Valemaxes for USD 1.1Bn

first_imgzoom Brazilian mining giant Vale SA plans to dispose of its remaining 11 Valemaxes though a lease-back deal estimated to be worth around USD 1.1 billion, the company announced on Friday at an investors conference in London.The move comes as Vale pushes to cut transportation costs between Brazil and Asia in an already challenging market which has seen iron ore drop to below USD 40 per tonne on the spot market.The major driver for Vale in this transaction is to get competitive freight rates on the lease-back agreements, Vale’s CFO Luciano Siani disclosed at the conference.Without disclosing potential buyers of the ships, Siani said that there continues to be a lot of interest in the ships.According to Peter Poppinga, head of Vale’s ferrous metals division, the ships are also expected to reduce its carbon footprint as Valemaxs burn 35 percent less fuel per tonne of ore moved.The iron ore carrying giants have been priced by Vale at USD 110 million each within efforts to offload its 35-vessel fleet.Valemaxes are among the biggest iron ore carriers ever built, boasting 1180 feet in length and from 380,000 to 400,000 tonnes in carrying capacity.The announcement comes on the back of a recent dam collapse in Samarco, Brazil that has flooded the area releasing mine waste into the local communities and destroying thousands of local homes and killing at least 15 persons. Vale is working together with Samarco Mineração SA and BHP on relocating the local population to new homes and damage control.The Brazilian government has filed a USD 5.2 billion civil lawsuit against the three over the dam disaster.World Maritime News Stafflast_img

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