Vale and Ningbo Zhoushan Port set up a joint venture company to build the project of West third area.

SMM: the board of directors of Vale has approved the establishment of a joint venture between its subsidiary (Vale International S.A.) and Ningbo Zhoushan Port Co., Ltd., a subsidiary of Zhejiang Seaport Investment and Operation Group (Ningbo Zhoushan Port Group) to build, own and operate the West District 3 project located at the Shaolang Lake Wharf in Zhoushan City, Zhejiang Province, China.

The West Zone 3 project includes the construction of a storage yard and loading dock with a handling capacity of 20 million tons at the Moulang Lake wharf. By participating in the project, Vale will ensure that the company's total annual processing capacity at the Rat Wave Lake terminal reaches 40 million tons, which will help Vale reduce overall supply chain costs.

The total investment in the West Zone 3 project is 4.3 billion yuan (US $624 million, 100 per cent equity), including access to land use rights. and through the construction of a new yard and two shipping berths (subject to the approval of the relevant regulatory authorities) to increase the port's annual handling capacity to 20 million tons.

Vale will own 50 per cent of the joint venture. Both parties plan to obtain third-party loans with a ratio of not less than 50% but not more than 65% of the total investment. Under the plan, Vale's contribution will be between US $109 million and US $156 million. The construction of the project will begin after the two sides have passed centralized declaration and review and other relevant regulatory approval in China, and the construction period is expected to be three years.

As the Rat Lake Terminal can dock with Valemax freighters, the West Zone 3 project will strategically ensure Vale's port handling capacity in China, while optimizing Vale's shipping and distribution costs.

On the strategy of ore mixing

In 2015, Vale launched the "Brazilian mixed Powder (BRBF)", which is a mixture of iron ore powder from the Caracas region of the northern Vale system and iron ore powder from the southern and southeast systems, so that the iron ore powders produced by different systems complement each other in terms of physicochemical and metallurgical properties.

Vale currently produces BRBF, in Malaysian logistics centres and 17 Chinese ports, including Rat Wave Lake, which shortens the time it takes for the company's products to reach the Asian market and boosts its distribution capacity by being able to transport using smaller cargo ships.

The implementation of the ore mixing strategy has also effectively improved the efficiency of the company's mining plan and increased the use of dry mineral processing, thereby reducing capital expenditure, extending the mining life of mines and reducing water consumption in operations. gives the company more flexibility to respond to short-term challenges.

About partner

Ningbo Zhoushan Port Co., Ltd. (stock code: 601018) is the main operator of the public wharf of Ningbo Zhoushan Port, which ranks first in the world in terms of annual cargo throughput for 11 years in a row. The company is one of the largest terminal operators in China, mainly engaged in container, iron ore, crude oil, coal, liquefied oil products, grain and other cargo port loading and unloading and related business. Ningbo Zhoushan Port has two berths capable of berthing 400000-ton mining ships. The partnership between Vale and Ningbo Zhoushan Port Co., Ltd. has been strengthened in recent years and has been extended to a number of strategic projects.