Rio de Janeiro, October 9th,
2020 - Vale S.A. (“Vale”) informs that its Board of Directors approved
the establishment, by its subsidiary Vale International S.A., of a Joint
Venture (“JV”) with Ningbo Zhoushan Port Company Limited (“Ningbo
Zhoushan Port”), a subsidiary of Zhejiang Provincial Seaport Investment
& Operation Group Co. Ltd. (Ningbo Zhoushan Port Group Co. Ltd.), to
build, own and operate the West III Project ("Project") in Shulanghu
Port, Zhoushan City, Zhejiang Province, China.
The West III Project consists in
expanding the Shulanghu Port facilities, developing a stockyard and
loading berths with additional 20 Mtpy capacity. By participating in the
Project, Vale will secure a total port capacity of 40Mtpy in Shulanghu,
which will help Vale to optimize its overall supply chain costs.
The Project has total multiyear
investments of RMB 4.3 billion (~US$ 624 million, full equity, 100%
basis) and it includes acquisition of land rights and the development of
port capacity of 20 Mtpy, including the construction of a new stockyard
and two loading berths, subjects to regulatory approvals.
Vale will own 50% of the JV and
both parties intend to obtain third-party loan of up to 65%, but not
less than 50% of the total investment. With these assumptions, Vale’s
capital contribution to the project will vary between US$ 109 million
and US$ 156 million, approximately. The construction of the project,
which is expected to take up to three years, will start after both
parties obtain the anti-trust and other regulatory approvals in China.
The Project secures strategic
port capacity for Vale in China, as Shulanghu Port berths Valemaxes and
allows Vale’s shipping and distribution costs optimization.
Figures - West III Project
About the blending strategy
In 2015, Vale launched the
Brazilian Blend Fines (BRBF), a product resulting from blending fines
from Carajas, in the Northern System, with fines from the Southern and
Southeastern Systems, which complement each other in terms of physical,
chemical and metallurgical characteristics.
The BRBF is produced at the
Teluk Rubiah Maritime Terminal in Malaysia and at seventeen ports in
China, including Shulanghu. This process reduces the time needed to
reach Asian markets and increases our distribution capillarity by
allowing the use of smaller vessels.
The blending strategy also
allows more efficient mining plans and increases the use of dry
processing methods, which in return reduce capital expenditures, extend
the life of our mines and reduce the use of water in our operations: a
key flexibility to cope with the short-term challenges.
About the partner
Ningbo Zhoushan Port Company
Limited (Stock Code: 601018) is the operator of the public terminals of
the Ningbo Zhoushan Port, which has ranked first in the world for 11
consecutive years in terms of total cargo throughput. As one of the
largest terminal operators in China, Ningbo Zhoushan Port Company
Limited is engaged in the loading and unloading of containers, iron ore,
crude oil, coal, liquified oil, grains among other cargos. It owns two
berths that can receive 400,000-DWT vessels. The partnership between
Vale and Ningbo Zhoushan Port Company Limited has been continuously
strengthened over the past years and expanded to many strategic
projects.
Source: Vale |