China Merchants Energy Shipping (CMES) has signed a contract of affreightment (COA) with mining group Vale to transport iron from Brazil to China over a period of up to 27 years.
The contract will employ CMES’ fleet of 400,000-dwt Valemax bulk carriers via CMES’ subsidiary Hong Kong Ming Wah Shipping Co.
The agreement was signed in Beijing today by CMES’ president Xie Chunlin and Luiz Meriz, Vale’s executive manager for shipping and marketing iron ore. Li Jianhong, chairman of China Merchants Group, and Murilo Ferreira, president and CEO of Vale, also attended the ceremony.
CMES said the new agreement will implement the strategic cooperation framework agreement signed between the two companies in September 2014, which comprised a 25-year freight contract linked to the order of 10 VLOCs, which would be chartered by Vale.
The 2014 agreement was amended in May 2015 when Vale sold four of its Valemaxes to CMES for an undisclosed sum.
In September 2015, CMES signed a 20-year COA with Vale for the transport of around 6m tons of iron ore from Brazil to China each year, with an option to extend the contract by an additional five years.