Oman Expands Role in Global Iron-Ore Market with 400,000-Ton Valemax Shipments

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Mining and metals giant Vale S.A. (NYSE:VALE) (Rio de Janeiro, Brazil) recorded its 50th Valemax delivery to the deep water jetty in the Port of Sohar in Oman, where it plans to build a steel plant. The company aims to get the maximum advantage out of its fleet of 35 giant Valemax iron ore-carrying vessels, and is seeking the best way to negotiate trans-shipment and delivery to the Chinese market.

The massive Valemax vessels have been built to integrate the company's global logistics strategy. Vale expects the vessels to generate customized solutions for its clients in Asia and strengthen its competitiveness in the iron-ore trade, where Australian companies have a much shorter supply route to China when compared with Vale's trip from Brazil.

A Valemax vessel has a deadweight capacity of 400,000 tons and has been responsible for the delivery of 80% of the iron ore shipments from Brazil to Oman. This represents 25 million tons of ore since operations with the vessel began in Oman in 2011.

Vale Chief Executive Officer Sergio Espeschit said that for every Valemax that calls at the port, approximately $3.3 million is invested in unloading the shipment and preparing the vessel for departure.

Most of these services, including port, shipping-agency and handling services, as well as the provision of bunker fuel, engine cylinder oil and consumable store supplies, are contracted to local businesses, Espeschit said. This represents an effort to develop the local supply chain, and help support and enable secondary and tertiary industries in Oman that seek to engage in international markets.

"The Port of Sohar's strategic location outside the Strait of Hormuz, with the advantage of deepwater seas, has put Oman on the world map of the steel industry, while solidifying its frontier market status and competitiveness in the global economy," Espeschit said. "Being one of 10 ports around the world equipped to receive Valemax's impressive capacity, the port has achieved global maritime prominence and allowed us to establish a worldwide production and logistics system that enhances our capability to generate customized solutions for clients.

He added: "Over the last three years, Vale in Oman has exported 20 million tons of iron ore pellets to its network of clients in the Middle East, North Africa and India with efficiency and just-in-time services, while contributing to Oman's Economic Vision for 2020."

A fully laden Valemax vessel carries as much iron ore as 11,150 trucks, enough to produce steel for three Golden Gate bridges.

For related information, see October 12, 2011, article - Vale Positions $1.3 Billion Malaysian Iron Ore Hub for Competitive Boost.

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