By Ben Tavener, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – The recent collision involving the Vale Beijing super-carrier off Maranhão state in Brazil’s north-east region has reignited debate over Brazilian mining company Vale’s plan to invest over R$8 billion (US$4.4 billion) into expanding its fleet of enormous cargo ships – over which there are currently six in operation – to some 35 Valemax vessels.

Vale Beijing super-carrier, China, Brazil, News
The 360m (1,180 ft) long Vale Beijing ships its cargo from Brazil to China in 45 days, with the most competition Australia-China route covered in ten days, image recreation.

After the collision, the ship – which was en route to the Netherlands on its maiden voyage – was towed to the nearby Baía de São Marcos for repairs to prevent it from sinking.

The super-carriers, which can carry 400,000 tons of cargo, transport iron ore from Brazil to Asia, principally China, and feed trade which Brazil has relied upon heavily in recent years for its economic success.

However, according to O Globo newspaper, none of the ships has authority to land at Chinese ports, pointing towards serious errors in the company’s logistical strategy; the company refutes the claims.

When Vale decided to expand its fleet, iron ore was selling for US$100 a ton, as opposed to US$30 today.

Originally the company used a freight subsidiary (Docenave), but then outsourced its shipping. However, the 2008 crisis  made the company rethink and start investing in its own transportation again.

Vale is the second-largest mining company in the world, and the largest producer of iron ore, and second largest of nickel. The company’s shares and Brazil’s main market index, the Bovespa, have suffered losses as a result of the incident.

Read more (in Portuguese).

* The Rio Times Daily Update is a new feature we are offering to help keep you up-to-date with major news as it happens.


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