Vale expected to call for RM3b seaport tender

The Brazilian iron ore producer plans to call for an international tender as early as November to help build a seaport in Perak

Brazil's Vale SA, the world's largest iron ore producer, plans to call for an international tender as early as November to help build a seaport in Teluk Rubiah, Perak, near the Straits of Malacca.


Business Times understands that the value of the contract is slightly more than RM3 billion and its duration is about 30 months.


Construction work is expected to start in the first quarter of next year.


Vale will employ some 3,000 workers, making the project the biggest in Perak in terms of capital investment and labour.

It is further understood that Vale will allocate some portion of the contract to local firms and that KYM Holdings Bhd had started talking with various foreign companies to submit a joint bid. KYM chief operating officer Allan Chin Kong Yaw declined to comment.

Vale has appointed Murray & Roberts Marine Ltd, a South African company, to do the design work for the jetty. The actual design work is being done in Cape Town, South Africa, with local unit Murray & Roberts (Malaysia) Sdn Bhd, acting as the go-between. A joint venture between Murray & Roberts and SNC Lavalin Australia Pty Ltd has been put in charge as construction manager to manage local subcontractors.

Last December, Vale signed an agreement with Integrax Bhd's 80 per cent-owned Lekir Bulk Terminal Sdn Bhd to provide the latter with transhipment services for iron ore cargo at a bulk terminal at Pulau Lekir Satu for over 10 years. People who work closely with Vale on the project say the jetty has been designed to be 2.5km long, with the berth having a 30-metre depth.

The seaport is designed to accommodate as many as four ships of 400,000 deadweight tonnes (dwt) capacity at one go. It will have an additional 10 berths for ships of 100,000 dwt capacity as well as berths for 50 barges.

Vale has placed orders for 12 very large, 400,000 dwt ore carriers from Jiangsu Rongsheng Heavy Industries Co Ltd. The vessels are expected to be delivered by end-2012.

Vale intends to use Teluk Rubiah as its base to ship to China, the world's biggest iron ore consumer, as commercial freight rates from Vale's Brazilian ports to China are double those paid by competitors BHP Billiton plc and Rio Tinto Group from Australia because of the greater distance.