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Subic Bay Metropolitan Authority (MPD-SBMA)

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07 February 2012

Subic Freeport eyes P70-M income from Vale transshipment project

The Subic Bay Metropolitan Authority (SBMA) expects to generate additional revenue of as much as P70 million with the transshipment operation here of Brazil’s Vale Mining, the world's biggest iron ore producer.

SBMA Chairman Roberto Garcia said the agency, which also administers the Port of Subic, has entered into an agreement with Vale Mining, making this free port the hub of Vale’s iron transshipment operations in Asia and turning Subic into a major player in the maritime logistics industry in the Asia Pacific Region.

“The main reason why Vale has located its operations here is Subic’s strategic location in the Asia-Pacific region,” Garcia said. “And it’s all about economies of scale. Vale will haul its ore products to Subic using its big carriers, then transfer the iron ore to smaller vessels, which the smaller ports in China will be able to accommodate,” he said.

“This is a very fortuitous development for SBMA because Subic will be at the very center of what is expected to be the biggest ship-to-ship transfer operations in the world in terms of volume,” Garcia noted.

“When Vale starts full operations on February 12, we expect the SBMA to earn some P70 million in additional income in the first year alone because of the projected increase in ship calls, as well,” Garcia added.

According to SBMA deputy administrator for port operations Redentor Tuazon, Vale will utilize its Valemax carrier vessels, which have a capacity of up to 400,000 deadweight tons (DWT), to deliver iron ore to several ports in China, now the world’s biggest user of iron ore.

The company will carry out its iron ore transshipment operation from its Valemax mother vessels, supplying ore to smaller daughter vessels, or feeders, which are either Panamax or Capesize types. The especially-designed floating terminal that will supply feeder ships will be anchored in Subic Bay.

Tuazon said that preparations are now underway for the initial transshipment operations with M/V Ore Fabrica, the floating terminal station that arrived here last Monday, January 31, and M/V Vale Brazil, which is set to arrive on February 13.

Owing to the magnitude of the transshipment operation, Tuazon said that various marine safety measures have been put into place, including the conduct of hazard and operability (HAZOP) analysis jointly made by representatives of Vale Brazil, SBMA, and agent companies involved in the operations.

All of the vessels to be used in the operation are insured and covered with protection and indemnity insurance, Tuazon added.

The SBMA has been aggressively pushing for the Port of Subic Bay to be a premier marine logistics hub in the region, as it continues to develop the market for the full utilization of Subic’s container terminals.

Recently, it has also offered various incentives to shipping companies for the development of new shipping routes to Singapore and Hongkong.

The arrival of Vale Brazil here would help Subic secure its place on the map in terms of floating terminal operations, Chairman Garcia said. (SBMA Corporate Communications)

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