China Merchants Energy Shipping Co., Ltd (CMES), the dry and wet bulk arm of state conglomerate China Merchants Holdings (International) Company Limited, has set up a wholly owned subsidiary China VLOC Company Limited to operate 400,000 dwt ore carriers in Hong Kong.
The new Hong Kong-based subsidiary will own the four Very Large Ore Carriers (VLOC) or "Valemax" vessels, purchased at a total price of $448m by CMES.
The 400,000-deadweight-tonne ships are some of the largest ships ever built and were sold under accords between Vale and China Merchants.
CMES had earlier entered into a deal for it to order 10 VLOCs against a 25-year contract of affreightment (COA) with Vale.
Vale Shipping Singapore, the vehicle that owns the valemaxes and subsidiary of Vale, will hand over the ownership of the giant ore carriers to CMES some time this month.
China Shipping Development (CSD) and Cosco have also together established a joint venture, China Ore Shipping, in Singapore in May to operate valemaxes.
China Merchants Energy Shipping Co., Ltd., together with its subsidiaries, engages in the ocean transportation activities in China. The company is involved in tanker transportation, bulk cargo transportation, liquefied natural gas (LNG) vessel transportation.
It operates 17 tankers with a total deadweight 3.71 million tons; 21 bulk carriers with a total deadweight 1.96 million tons; 6 LNG ships with a total deadweight 6.17 million tons.