Vale: New Carbon Emission Regulations Will Drive Up Freight Costs

Brazilian mining giant Vale recently stated in a report to investors that the new greenhouse gas emission regulations to be introduced by the International Maritime Organization (IMO) may "significantly impact" its global logistics costs, particularly putting pressure on its iron ore seaborne shipping business. Although the specific details are yet to be finalised, Vale has already listed this as an important strategic consideration. The company stated that it has not yet assessed the specific impact of the new regulations on overall freight costs, but its shipping-related expenses last year amounted to as high as $4.75 billion. "Based on the latest developments of these measures, the company will reassess medium and long-term scenarios and financial impacts in its strategic planning review, and it is expected that carbon pricing mechanisms will drive up freight costs."