Chinese vice Prime Minister Wang Qishan (L) and
Brazilian President Dilma Rousseff (AFP, Evaristo Sa)
Brazil and China are negotiating access to Chinese ports by large vessels operated by miner Vale SA after the Asian nation tightened rules on giant carriers.
Brazilian Vice President Michel Temer discussed access for Vale's so-called Valemax vessels, the world's biggest carriers of dry-bulk commodities, with Chinese Vice Premier Wang Qishan in a meeting in Brasilia today, said Marco Aurelio Garcia, foreign policy adviser to Brazilian President Dilma Rousseff.
"It will be dealt with at a political level," Garcia said in an interview in the Brazilian capital today.
China, the world's largest iron-ore consumer, on Jan. 31 tightened rules for ports that handle very large ore ships and oil tankers to ensure safety standards, restricting Vale's plans to serve its main customer with lower-cost carriers. The involvement of government officials from both countries indicates the dispute is intensifying after Vale said in December that the Brazilian government wasn't involved in helping the company secure access.
The standoff is part of tense relations between the two largest emerging markets. Intent on slowing a flood of cheap goods from China, Brazil imposed tariffs on a series of Chinese goods last year and slapped a tax on car imports affecting Chinese manufacturers.
Brazil wants more access to the world's second-biggest economy for companies such as aircraft manufacturer Embraer SA and Marcopolo SA, Brazil's biggest bus maker, Temer said in a joint statement to the press after meeting Wang.
China surpassed the U.S. as Brazil's largest trading partner in 2009, with total imports and exports growing 16 percent to $77.1 billion last year. Iron ore is Brazil's main export.
Rio de Janeiro-based Vale, the world's largest iron-ore producer, is spending at least $8.1 billion buying 19 very large ore carriers and leasing another 16 in long-term contracts, as it seeks lower freight costs from Brazil to China.
China is excluding the Valemax, able to carry about 400,000 metric tons of iron ore, because they lack port-entry permits, Jose Carlos Martins, Vale's head of ferrous and strategy, said in December. China buys about 45 percent of the iron ore sold by the Brazilian company.
"They're not opposed to opening those ports, they want to look at some security issues," Clodaldo Hugueney, Brazil's ambassador to China, said today in an interview in Brasilia.
A Vale official in Rio de Janeiro, who declined to be named citing corporate policy, said today the company didn't have an immediate comment.
The five Valemax ships in operation haven't reached Chinese ports since they began operating in May. The Berge Everest, another large vessel used by Vale with capacity to carry 388,000 metric tons, arrived at the Chinese port of Dalian Dec. 28.
Vale this month established a so-called transshipment vessel in the Philippines's Subic Bay as a way of bypassing the exclusion. The floating transfer station will unload ore from the largest carriers and place the commodity on smaller vessels for shipment to ports elsewhere in Asia.
Vale rose 2.6 percent to 43.73 reais in Sao Paulo today, the most since Jan. 17. The stock gained 16 percent this year, in line with the gains of the Brazilian benchmark