Freshly rehabilitated South Korean shipping company Pan Ocean Co. has entered into a Contract Of Affreigtment (COA) with Brazilian mining conglomerate Vale, for the shipping of iron ore of approximately 32 million tons.
The contract is signed for 20 years from the fourth quarter of 2016 to the fourth quarter of 2036 and is valued at KRW 419 billion (USD 359 million)
As stipulated by the contract, the loading of the iron ore will take place in Brazil, from where the cargo will be transported to China and Malaysia etc.
“The main objective of the company for entering into the COA is to secure a stabilized source of revenue and profit,” Pan Ocean said in a stock exchange filing.
The deal comes as Vale ramps up efforts to secure shipping capacity for its cargo, targeting China in particular. Namely, the company has just inked a 27-year long deal with China Merchants Energy Shipping’s (CMES) subsidiary, Hong Kong Ming Wah Shipping to transport iron ore from Brazil.
Completion of Pan Ocean’s rehabilitation procedure was cleared by Seoul Central District Court in July 2015 after the company wrapped up its restructuring process which saw repayment of the claims of creditors and other interested parties, along with the merger with Harim Group & JKL Consortium that was sealed on 12 February, 2015.
World Maritime News Staff