South Korean ship operator Pan Ocean has clinched a Won 1.98 trillion($1.82 billion) deal to transport iron ore for Brazilian mining major Vale toChina for 27 years from 2020, a company official said Monday.
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The contract with Vale starts from January 1, 2020 and runs to August 31,2047, the official said.
"For carrying out the deal with Vale, Pan Ocean has decided to invest Won483 billion to secure six very large ore carriers [VLOCs]," the official said.
The six VLOCs will be delivered from December 2019 to September 2021 froma Chinese shipbuilder," he said, declining to identify the Chinese shipyard.
The investment plan was approved by the board last week, the officialsaid.
Pan Ocean currently operates eight iron ore carriers.
Vale has awarded long-term freight contracts to transport iron ore tosome seven shipowner-operators including five from South Korea and two fromChina, according to sources.
Among these are South Korea's Polaris Shipping, Korea Lines, SK Shippingand China's Cosco as well as China Merchants Energy Shipping Group.
Vale's latest long-term freight contract will encompass around 30 VLOCsin the 325,000 dwt class, according to one shipowner-operator source.
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