Bank of China contributes to $1.229 billion buyer's credit loan to Brazil's Vale for construction of 12 VLOCs (linked to Record ID#38278)

Project narrative

In September 2010, Vale Mining Company signed a $1.229 billion buyer's credit (loan) agreement with a syndicate composed of the Bank of China and the Export-Import Bank of China. The proceeds of the loan were to be use by the borrower to finance 80% of the cost of a commercial contract for the construction of 12 very large ore carriers (VLOC) from Jiangsu Rongsheng Heavy Industries Co., Ltd. ordered in 2008. The ships estimated total cost is $1.6 billion. Record ID#38278 captures the estimated financial commitment of China Eximbank, while Record ID#100723 captures the estimated financial commitment of Bank of China. Vale began shipping ore to China in 2011 and 2012. The last one of the 12 ships was finished and started its trial trip in January 2015. The loan is payable over 13 years and is disbursed over three years. According to Vale Mining Company, as of December 2016, Vale sold the 12 very large ore carriers for $445 million from China Ocean Shipping Company in June 2015, $448 million from China Merchants Energy Shipping Co. Ltd. in September 2015, and $423 million from a consortium led by ICBC Financial Leasing in December 2015. Vale used part of the proceeds to repay debt to the Export-Import Bank of China and the Bank of China Limited, reducing the total debt by $284 million.