Fortescue Negotiating More Ships

Australian miner Fortescue has launched talks for the construction of four highly efficient very large ore carriers (VLOCs) for a total investment value of US$275 million, the company said.

 
Construction is expected to commence in the second half of 2014 and delivery is scheduled for November 2016 through to May 2017 with the majority of payments due on delivery.

In addition, advanced negotiations are underway to secure four additional VLOCs with another major Chinese ship builder, the company announced.

These ships are expected to be delivered in late 2017 and early 2018 with the majority of payments also due on delivery.

“Fortescue’s shipping strategy is to lock in construction of these VLOCs which are being designed to complement the port infrastructure to improve load rates, efficiencies and reduce operating costs.

Flexibility has been built into the ownership structure of these VLOCs which will allow Fortescue to explore alternative financing structures at a later date, ” the company said.

The investment will initially be funded by existing operating cash flows, according to Fortescue, which expects the operating cost of these vessels to be well below the current forward market rates for large capesize vessels.

This, together with expected through- put benefits and operational savings at the port, support the investment in these vessels,” the company concluded.

Only a month ago, Fortescue signed a contract with a Chinese shipyard for the construction of four VLOCs valued at around US$275 million.

The vessels will be delivered from November 2016 through to May 2017.

World Maritime News Staff; July 17th, 2014

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