Brazilian mining giant Vale is set to make new progress with its plan to order 30 tri-fuel (fuel oil/methanol/ethanol) ore carriers. The total value of this order is $3.4 billion (approximately 23 billion yuan), and the contracts are expected to be shared among three Chinese shipyards.
In February of this year, reports indicated that Vale planned to add 30 newly built, high-specification, environmentally friendly ore carriers to its fleet, including 20 Newcastlemax bulk carriers and 10 VLOCs. The new vessels can operate on high-sulfur fuel oil, ethanol, and methanol, with provisions for LNG and ammonia fuel, and are equipped with multiple energy-saving technologies, including desulfurization towers, rotary sails, air lubrication systems, and shaft generators. Vale will provide long-term time charter or block charter contracts of more than 25 years for the 30 new vessels.
20 Newcastlemax bulk carriers
According to TradeWinds, Vale has selected three Asian shipowners to carry out a project involving 20 Newcastlemax bulk carriers.
Industry sources say Vale has selected South Korea’s HMM, South Korea’s Polaris Shipping, and China’s Shandong Shipping as the owners for up to 20 tri-fuel Newcastlemax bulk carriers. Of these, HMM will be responsible for 8 vessels, while Polaris Shipping and Shandong Shipping will each be responsible for 6.
Since South Korean shipyards have virtually no bulk carrier construction business, Chinese shipyards are expected to secure these orders. According to market sources, HMM is in talks with Yangzijiang Shipbuilding, Polaris Shipping has selected Waigaoqiao Shipbuilding, and Shandong Shipping plans to place an order with Qingdao Beihai Shipbuilding.
HMM recently announced orders for two VLGCs and eight Newcastlemax bulk carriers, with a total construction cost of $1.08 billion. The two VLGCs, with a total value of $236.8 million, will be built by HD Hyundai Samho; the eight bulk carriers—part of the Vale project—have a unit cost of $105 million, for a total of $843 million, though the shipyards responsible for their construction have not yet been disclosed.
10 VLOCs of 325,000 Deadweight Tonnage
On April 9 of this year, Vale announced a 25-year charter agreement with Shandong Shipping for two ethanol-trifuel Guaibamax-class VLOCs, while retaining several options that could expand the order to a maximum of 10 vessels.
The two VLOCs are being built by Qingdao Beihai Shipbuilding and are expected to be delivered starting in 2029, with a unit price of approximately $130 million. If all 10 vessels are ordered, the total construction cost will be $1.3 billion (approximately 8.8 billion RMB).
The ethanol-trifuel VLOCs being built by Beihai Shipbuilding are 340 meters long with a deadweight of 325,000 metric tons. This vessel type is part of Vale’s multi-fuel strategy; in addition to ethanol, they can also use methanol and heavy fuel oil, while retaining the capability to run on LNG and ammonia.
Similar to the 10 methanol-dual-fuel VLOCs (also built by Beihai Shipbuilding) that Shandong Shipping will begin delivering in 2027, the new vessels will be equipped with five rotary sails and feature multiple energy-saving technologies to enhance energy efficiency. Compared to Vale’s current Guaibamax class, the application of these energy-saving technologies is expected to reduce greenhouse gas emissions by 15%.
A Vale spokesperson stated: “Using ethanol as fuel on iron ore carriers and employing rotary sails to harness wind energy will position Vale uniquely in the global shipping industry’s energy transition over the coming decades, while also promoting the implementation of similar initiatives within the industry.”