Business

Vale to spend $52m on new facility

BRAZILIAN mining powerhouse Vale, which has a stake in three Central Queensland coal mines, is taking on BHP Billiton in a battle to lure some of the company's Chinese iron ore customers.

Vale will spend $52 million to build a second "floating iron ore transfer station" in Subic Bay off the Philippines coastline

These ports have no connection to land, but allow Vale to unload its fleet of iron ore-laden ships - the largest in the world - on to smaller and faster ships.

The plan is to have its armada of "Valemax" vessels shipping massive amounts of the mineral which can then be split up and speedily delivered to Chinese ports.

One of BHP Billiton's competitive advantages is that Australia's closeness to China means it pays less for freight so the Chinese pay less for its coal and iron ore.

This is Vale's way to challenge that.

The new floating stations are mobile enough to be moved to wherever is necessary.

According to Vale, the Valemax ships will take minerals from Brazil "85% of the way", before being put onto smaller ships that will travel the remaining distance.

"Both the existing station and the one to be built are mobile, making it possible to move them to operate in different offshore regions. They will be always close to our main consumer markets in Southeast Asia and other parts of Asia," Vale said in a statement.

A spokesman for BHP Billiton said it was inappropriate to comment on a competitor's activities.

Topics:  bhp billiton vale



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