SBMA: Measures in place to avert ore spill in Subic Bay

The top official of the Subic Bay Metropolitan Authority (SBMA) said the agency has institut­ed measures to avert the recurrence of iron-ore spill following complaints from local fishermen that the off­shore terminals of a freeport-regis­tered company polluted the waters of Subic Bay last week.

SBMA Chairman Roberto Gar­cia said in a media forum here on Wednesday that he ordered the management of Vale, which operates two floating transfer stations (FTS) in Subic Bay, to stop transshipment during heavy rains to avoid spillage.

The company has also committed to increase the capacity of the rain­water collection tanks in its floating terminals so that excess rainwater will not wash down whatever iron ore is left on the deck of the ships, Garcia added.

The firm, Brazil-based Vale In­ternational SA, is the world’s largest producers of iron ore and controls the largest share of the seaborne trade in iron ore. The company expanded its operations in Subic Bay after one year by deploying another FTS in April.

Garcia said some iron ore on the deck of the floating terminals “were washed away” when it rained hard on July 25.

“We have monitored the spill, which caused discoloration of the waters around the vessels, and by the third day, it has already dissipated,” Garcia said.

The discoloration, however, alarmed residents, particularly fish­ermen, in the Subic Bay area. They initially thought the discoloration was due to rust coming off the hulls of the two floating terminals.

But a resident who recently opened a page called “Stop Vale Ore Operations in Subic Bay Now” in the Facebook social-networking site pointed out that the reddish water around the ships was the result of iron sediments.

The Facebook activist also assert­ed that Olongapo City should earn money from the multimillion-peso income of SBMA from Vale opera­tions because “it is clear that the part of Subic Bay where Vale ships operate is under the jurisdiction of Olongapo, and not of SBMA.”

“The SBMA enjoys huge income while Olongapo gets the damage,” the Facebook page also said.

Garcia, however, gave the assur­ance that Vale operations do not pose a threat to the environment, as well as the health of residents, adding that the firm is “very much safety-conscious.”

He also said it would not be pos­sible for any local government unit (LGU) to collect more fees from Vale operations “because the SBMA is re­leasing revenue shares regularly to all LGUs affected by Subic Bay Freeport operations.”

The Subic agency had just an­nounced on Tuesday it would re­lease a total of P93.7 million to eight LGUs in the Subic Bay area. This includes Olongapo, which will get the lion’s share of P22.7 million as revenue share from Subic Bay Freeport operations for the first semester this year.

On concerns about the environ­ment, Garcia said iron ore is not a toxic substance and that because it is a naturally occurring element, “does not react to the environ­ment.”

The only possible hazard that iron ore may pose, Garcia said, “is when you inhale it in dust form.”

He said, however, that Vale is wetting the iron ore slightly during transshipment to prevent the forma­tion of dust that may be blown by the wind into the sea.

“We have done due diligence here in coordination with Vale even before they started operating,” Garcia said.

Garcia, however, may not be ready for an offshoot of the alarm raised by the reddish waters seen around the Vale ships last week.

Olongapo City Councilor Noel Atienza said he will file two separate resolutions about the issue: The first to urge the Office of the President and the Department of Environment and Natural Resources to conduct an investigation into the Vale iron-ore spill, and the second, to urge the SBMA to stop Vale operation to pre­vent further spillage.(Henry Empeño, BusinessMirror)

PHOTO: VALEMAX OF BRAZIL

http://www.businessmirror.com.ph/index.php/en/news/regions/36405-sbma-measures-in-place-to-avert-ore-spill-in-subic-bay

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Biggest Ore Carrier Calls In Subic

Vale SA, the iron ore producer operating the world's biggest ships, said one of them called at the port of Subic in the Philippines, extending the number receiving the vessels to seven.

The Vale Minas Gerais, with capacity to carry 400,000 metric tons of iron ore, arrived at Villaneuva port yesterday, Vale said in an e-mail today. The company is spending more than $8 billion to build and control a fleet of 35 of the carriers to lower its freight costs and better compete with Australian miners, who are closer to the biggest consuming region.

China buys about 65 percent of the world’s seaborne iron ore. Vale said in June its biggest ships were restricted from calling at the Asian country’s ports. The vessels already called at ports in Brazil, Oman, the Netherlands, Japan and Italy, the miner said today.

They have also discharged at a floating transfer station at Subic Bay in the Philippines.

JFE Steel Corp. took delivery of the cargo, the fourth steelmaker to do so from one of the so-called Valemaxes, according to Vale.

The ships are lowering transport costs for steelmakers in Asia with “advanced” negotiations with other customers and ports to use

them, Vale’s Executive Director for Ferrous and Strategy Jose Carlos Martins said in the statement.

Vale paid $4.20 a ton to hire a vessel to ship ore to China from Subic Bay, according to an Oct. 11 list of charters published by the Baltic Exchange, the London-based assessor of freight costs.

Vale declined to comment on that charter in an emailed response to questions on Oct. 16.

Rates for Capesize vessels carrying the commodity slid 1.7 percent today to $13,430 a day, according to the Baltic Exchange. The ships have less than 50 percent of the capacity of Valemaxes. Panamaxes, the biggest to navigate the Panama Canal’s locks, fell 1 percent to $7,142 a day.

Costs as measured by the Baltic Dry Index, a wider measure of raw materials freight rates, declined 1 percent to 989 points. (Bloomberg)

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Vale, SBMA launch Subic Bay iron ore transshipment operations

Brazil’s Vale Shipping Holdings Pte. Ltd. (VSH), along with the Subic Bay Metropolitan Authority (SBMA), formally launched a partnership for the transshipment of iron ore from this free port.

In a ceremony held at the Lighthouse Marina Resort here on June 1, VSH executives led by Jose Carlos Martins, executive officer for ferrous minerals operations, and officials of the SBMA led by Chairman and Administrator Roberto Garcia, announced the start of Vale’s transshipment business here.

VSH is an affiliate of Vale SA, the world’s largest producer of iron ore, which also controls the largest share of the seaborne market for iron ore.

The company will carry out iron ore transshipment operations from its Valemax mother vessel to be anchored in Subic Bay, and then supply ore to smaller daughter vessels or feeders, which are either Panamax or Capesize types.

The project is expected to boost Subic’s port revenues by up to P70 million in the first year of operations alone.

In his message during the project launch, Martins thanked the SBMA for its warm reception of the project and expressed hope that the partnership between his company and the SBMA would continue to grow and benefit both the Philippines and Brazil.

“The Philippines is growing now at almost the same pace with China, and the Philippines is emerging in the world economy,” Martins noted. “With this opportunity, now is our time — now is the time for countries like Brazil and the Philippines.”

Garcia, meanwhile, said that the Vale project will help thrust the Philippines forward in the maritime industry and stressed its importance to the SBMA.

“In our strategic plan, we were very dead-set in continuing to promote the maritime business, and the Vale project is an important pillar of our strategy to maximize the use of Subic Bay,” he said.

“We have a very good future here,” Garcia added, pointing out that the Philippines is in a current state of rapid development, having achieved a 6.4 per cent GDP growth rate this first quarter compared to 4 per cent last year. “And what is outstanding is the fact that it is the second highest growth rate in the region, second only to China,” he added.

For his part, SBMA director and treasurer Joven Reyes said that the agency is much honored that VSH had chosen Subic Bay as its major transshipment port.

“We hope even more that your business continues to move from success to success and that this partnership, which we are officially launching today, would lead to better and greater developments for Vale, Subic Bay, and of course our country down the road,” Reyes said.

The Vale project began in late 2010 when SBMA and Vale proposed a solution that matched Vale’s transshipment operations model with SBMA’s logistics business model.

Stefani Saño, SBMA senior deputy administrator for business and investment development, said that Vale needed to optimize its large-scale iron ore distribution and delivery system and the SBMA offered the bay as a suitable offshore location.

“This logistics model would allow Vale’s huge vessels to tranship the commodity with maximum efficiency in terms of time and cost, given the scale of operations required,” Saño added.

Saño also said that apart from Vale, the SBMA is also trying to attract more logistics companies to invest in the Freeport. He said that at least two logistics companies engaged in different line of commodities for offshore-based distribution operations have expressed interest in locating at Subic Bay. (FMD/MPD-SBMA)

PHOTO:
SBMA Chairman Roberto V. Garcia welcomes Jose Carlos Martins, executive officer for ferrous minerals operations of the Vale Shipping Holdings Pte. Ltd. ( VSH), during the June 1 ceremonial launch of the Vale iron ore transshipment operations in Subic Bay. Looking on, at left, is SBMA chief operating officer Joven Reyes.

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Brazil’s Vale invests to get around Chinese megaship ban

Brazilian diversified mining major Vale, the world’s number two mining group in terms of market capitalisation, has announced that it is to establish a second floating iron-ore transfer station, in Subic Bay, in the Philippines.

This station will transfer iron-ore from the miner’s giant Valemax bulk carriers to smaller Capesize and Panamax ore carriers, which will then convey the ore to ports in China.

The first of these floating transfer stations, also in Subic Bay, started operations in February and cost the Brazilian group $52-million.

The Valemax ships are the largest bulk carriers in the world. Each of them has a length of 362 m, a beam of 65 m and is able to carry 400 000 t of iron-ore. Each Valemax can carry three times the cargo of a Capesize bulk carrier – Capesize ships currently carry 80% of the world’s seaborne iron-ore.

Vale has ordered 35 Valemax ships, of which eight have been delivered. But Chinese shipowners, alarmed by the competitive threat they pose, have persuaded the Chinese authorities to ban them from that country’s ports.

The floating transfer stations are Vale’s response. They allow the company to deliver its iron-ore some 85% of the distance from Brazil to China on board the more cost-efficient Valemax ships, and then conclude the last 15% on the smaller vessels.

In addition, Vale has an operational land-based distribution centre in Oman and is building a second such centre in Malaysia. Together, these floating transfer stations and the distribution centres will be able to absorb the total capacity of all 35 Valemaxes, which comes to 60-million tons of iron-ore a year.

However, Chinese steelmakers, eager to benefit from the cost reductions the Valemax ships could bring, are reported to be pressurising the Chinese government to lift the ban on the vessels. One of the first Valemax ships successfully docked at Dalian last year, before the ban was imposed.

Moreover, nearly half of the Valemax ships – 16 out of 35 – are being built in China by Rongsheng Heavy Industries, an order worth $2.1-billion. (The rest are being built in South Korea. One of the South Korean ships recently developed cracks in its hull on its maiden voyage, but Rongsheng states its ships are very safe.) Not all the Valemax ships will be owned by Vale, but those that are not owned by the group will be on long-term lease to it.

Should the Chinese government change its policy and allow the Valemax ships into its ports, this will not render the floating transfer stations superfluous. As each transfer station is actually a modified bulk carrier, they will simply be moved to new locations to serve other markets in Asia and South-East Asia.
The development and deployment of the Valemax ships has had a severe impact on the value of Capesize vessels. The website VesselsValue.com last month reported that new Capesize ships that had been worth $69.9-million in April 2010 were now worth $39.9-billion. The website also reported that, as a result of the Chinese ban, the value of Valemax ships had fallen by 36%. But, for Vale, it is the value of the iron-ore and the utility of the ships that are important; the book value of the vessels is a secondary issue.

Meanwhile, closer to home, the Brazilian miner’s Mozambican operation has ordered 33 200 railway sleepers from agriculture and forestry company Montara Continental, which operates in Mozambique and Tanzania and is 75%-owned by the British Obtala Resources group. The railway sleepers will be delivered over the next seven months and will be used in the upgrading of Vale-owned railways in Mozambique and Malawi and in the construction of a new line in Malawi. (Keith Campbell, Creamer Media's Mining Weekly)

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