COSCO Group began making payments for Vale’s large vessels in the first week of June.

On May 19, local time, witnessed by Chinese Premier Li Keqiang and Brazilian President Rousseff, Vale signed cooperation agreements with COSCO Shipping, China Merchants Ship, the Industrial and Commercial Bank of China, and the Export-Import Bank of China. Under these agreements, Vale sold to COSCO Shipping four ultra-large ore carriers—each with a deadweight tonnage of 400,000 tons—that are owned and operated by Vale. The total transaction amount is US$445 million, with deliveries expected to begin in June 2015 and payment to be made after delivery. Additionally, Vale has sold another four ultra-large ore carriers to China Merchants Ship; these transactions are set to be completed in the coming months.

In addition to the successful sale of ships, Vale has also secured financial support from China. As a complement to the two agreements mentioned above, the Export-Import Bank of China will provide loans of up to US$1.2 billion each to COSCO Group and China Merchants Group, respectively, to support these two shipping companies in providing iron ore transportation services for Vale. Furthermore, the Industrial and Commercial Bank of China will offer Vale financing arrangements and financial services totaling up to US$4 billion through syndicated loans, bilateral loans, export credits, and trade finance facilities.

These agreements were all signed during Premier Li Keqiang, the “super salesperson,”’s visit to Latin America. These agreements have finally made possible Vale’s long-held aspiration, nurtured over many years, and the Big Ship Project is finally beginning to break the ice.

The successful breakthrough in the Great Ship Initiative has occurred against the backdrop of significant strides made in recent two years in strengthening economic and trade relations between China and Latin America, as well as in building mutual trust between the two governments. According to the report “Promoting Trade and Investment with China,” released in January 2014 by the United Nations Economic Commission for Latin America and the Caribbean, China has become the most important trading partner for countries such as Brazil, Peru, Chile, and Colombia.

2014 7 Moon 17 Date to 23 On that day, Chinese President Xi Jinping visited Brazil, Argentina, Venezuela, and Cuba. That year... 7 Moon 17 The day, initiated by the Chinese side, China - The first collective meeting of Latin American and Caribbean leaders was held in Brasília, the capital of Brazil. And less than... 10 A month later, Premier Li Keqiang embarked on a visit to Latin America. The outcomes of this visit covered areas such as infrastructure development, finance, and trade and investment. Premier Li Keqiang stated that an important objective of this trip to Latin America was to promote capacity cooperation with Latin American countries.

2015 5 Moon 27 On [date], Gu Dawei, Director-General of the Foreign Investment Department of the National Development and Reform Commission, led a working group to Brazil and Peru, where they held consultations with relevant authorities in those countries on advancing the Two-Ocean Railway project and fostering capacity cooperation between China and Brazil and Peru. Soventix Chile SPA Hesheng and JA Solar announced that the two companies will establish a joint venture in Santiago, Chile, to jointly develop large-scale solar photovoltaic power generation projects. Xiamen Lans. X600 Self-service card-swiping machines and X100 Top-up machine in Ecuador LojaBRT The station has officially gone into operation. This is Ecuador’s first implemented electronic fare collection system for buses and carries landmark significance.

Earlier in April, cooperation agreements between China and Latin America had already begun yielding frequent good news: Petrobras announced the formal signing of a $3.5 billion financing agreement with the China Development Bank; the Ecuadorian government handed over 709 vehicles of various types—branded as Sinotruk—to end-users; China’s first export batch of diesel multiple units destined for Argentina rolled off the production line; and China Construction America, the largest overseas subsidiary of China State Construction Engineering Corporation, officially established China Construction America Panama as its headquarters for the Latin American market...

Among these developments, Vale’s large-ship initiative reflects the warming relationship between China and Brazil—and indeed, between China and the entire Latin American region. As one of the world’s three largest iron ore producers, Vale, like Rio Tinto and BHP Billiton, regards China as its largest consumer market for iron ore.

However, compared to Rio Tinto and BHP Billiton mines located in Australia, Vale of Brazil faces a natural disadvantage: its geographical distance from China is significantly greater than that of the other two companies. The direct consequence is extremely high transportation costs: according to available data, the freight cost for iron ore shipped from Vale of Brazil to China stands at $29 per ton, whereas the cost for similar iron ore exported from Australia to China is around $9 per ton.

The disparity in transportation costs has long been a pressing issue that Vale is eager to address. The solution Vale has come up with is: building larger ships.

Under Vale’s “Valemax” project, the company will build 35 ultra-large vessels with a capacity of 400,000 tons each, designed to transport iron ore from Brazil to China. Compared to today’s sand-carrying vessels, which typically have a capacity of 100,000 tons, these new ships will significantly reduce transportation costs. Murilo Ferreira, President of Brazil’s Vale, told Economic Observer, “In terms of transportation between Brazil and China, Valemax offers substantial advantages, and we are highly confident in its potential. Valemax is more efficient, helps lower costs, and can also cut emissions by as much as 35%. Valemax represents the future direction for the mining industry—especially in the field of bulk cargo transportation.”

This ambitious plan began to take shape several years ago, but has consistently faced opposition from Chinese shipowners.

At the end of 2011, Vale made its first attempt to dock a large vessel at Dalian Port in China. Less than three months later, two senior officials at Dalian Port were successively transferred to other positions. 2012 Year 1 month, the Ministry of Transport issued a 13 Document No. ” (i.e., the “Notice on Adjusting the Berthing Management for Vessels Exceeding Design Specifications”), effectively ending the possibility of Vale’s large vessels calling at Chinese ports. 2013 Year 4 Last month, Vale made another attempt to ship a vessel carrying... 23 A large vessel carrying 10,000 tons of iron ore entered Lianyungang and departed immediately after unloading. Two days later, the China Shipowners’ Association sent a letter to relevant authorities—including the National Development and Reform Commission, the Ministry of Transport, the Jiangsu Provincial Government, and the Lianyungang Municipal Government—expressing its firm opposition to the practice of allowing large vessels to dock in Lianyungang.

With the expansion plan on the verge of completion, Vale must come up with a solution.

Fei Muli introduced that Vale’s expansion plan has entered a critical phase. The S11D project, located in the Carajás region of Brazil, is expected to begin formal production in 2016. This is Vale’s largest project ever, with a total investment approaching 20 billion U.S. dollars and an annual output capacity reaching 90 million tons. Once this project comes online, Vale will achieve an annual iron ore production capacity of 450 million tons, a significant portion of which will be shipped to China.

According to the Big Vessel Plan, Vale’s big vessels will transport over 50 million tons of iron ore annually, and Vale as a whole will ship more than 150 million tons of iron ore to China each year. Faced with various obstacles, Vale has come up with the following approach to realize the Big Vessel Plan: sharing benefits and pursuing win-win cooperation.

2014 3 In the month, Vale began sourcing supplies from China, and one of its orders was placed with the state-owned enterprise China Harbour Engineering Company. 1 A construction engineering contract worth hundreds of millions of U.S. dollars. At the time, Vale’s Chief Financial Officer, Xi Yaning. (Luciano Siani) Also pledged: “ A new phase of Vale’s procurement in China is set to truly begin. In the future, Chinese suppliers will play an increasingly important role in Vale’s global procurement strategy. ”

2014 9 In the month, Vale signed cooperation framework agreements with COSCO Shipping and China Merchants Ship, each of which includes provisions for the sale of large vessels. 2015 Year 5 Based on these two agreements, Vale will sell large vessels to two companies. Meanwhile, Vale has already signed agreements with the two companies, under which each company will build vessels for Vale. 10 A new ship. “ We have established a strong partnership with China. We source many products and services from China, ranging from infrastructure to high-tech equipment. At our logistics hub in Malaysia, much of the equipment comes from China, and it’s here that we can blend different types of ores before shipping our products throughout the Asia-Pacific region. Our projects in Mozambique also involve collaboration with Chinese companies—this includes our Moatize coal mine and the Nacala Corridor, where we’ve undertaken construction. 912 A railway spanning several kilometers, plus a deep-water port. We’ve had a very positive experience collaborating with Chinese enterprises on port equipment, and we’ve also procured other equipment from China, such as ship-loading machinery. ” Fei Muli said.

During Premier Li Keqiang’s visit to Latin America in May, in addition to the four agreements signed with Vale, Chinese companies and Latin American enterprises struck numerous major deals. These include a memorandum of understanding between AVIC International and Colombia for the purchase of Y-12E aircraft; a memorandum of financial services cooperation signed between the Industrial and Commercial Bank of China and Chile’s Pacific Mining Company, under which they will collaborate on the expansion and marketing of the Noord iron ore mine in Chile; a memorandum of cooperation on the Eastern Bogotá Tram Project, jointly signed by Gezhouba Group and the China Development Bank with Colombia’s BENTON Company in Bogotá, the capital of Colombia; a Memorandum of Understanding on Cooperation between Ecuador’s Ministry of Energy and Renewable Resources and China Three Gorges Corporation, signed by Lu Chun, Chairman of the Three Gorges Group, together with Rafael Poveda Bonilla, Minister of Coordination of Strategic Sectors of Ecuador, and Este-ban Albornoz, Minister of Electricity and Renewable Energy; and framework cooperation agreements signed separately by the Export-Import Credit Insurance Corporation of China with Banco de Chile and Banco de Crédito y Comercio de Chile.

Against the backdrop of increasingly comprehensive and in-depth economic and trade exchanges between China and Latin America, it’s hardly surprising that the long-stalled “Big Ship” initiative is finally starting to break the ice. As Feimuli stated to Chinese media: “I’m very optimistic about future cooperation between China and Brazil, as well as between Vale and Chinese companies. Brazil boasts some of the world’s finest metal resources, including iron ore, and we’re also fortunate to have secure supplies of grains and food. There’s significant complementarity between China and Brazil, making our cooperation highly meaningful.” Feimuli added, “We’re delighted to see the relationship between our two countries growing stronger every day, and we’re eager to explore further opportunities for collaboration with China. I’m confident that cooperation between China and Brazil will continue to deepen—day by day, week by week—because this reflects the shared aspirations of both peoples. Moreover, the governments of both countries will continue to support their respective enterprises, paving the way for high-level cooperation between our two nations.”