Vale Partners with China's Shandong Shipping for First Ethanol-Powered Vessels

Brazilian mining giant Vale has finalized a 25-year charter agreement with China's Shandong Shipping Corporation for the construction and operation of the world's first ethanol-powered ocean-going vessels. Rodrigo Bermelho, Vale's Director of Shipping, disclosed this development to Reuters. This initiative represents another significant stride in Vale's strategy to decarbonize its shipping fleet. The move comes at a time when global concerns over oil supply and logistics have heightened due to conflicts in Iran and disruptions in the Strait of Hormuz, underscoring the urgency for alternative fuels and greater diversification in maritime transport. Bermelho emphasized that decarbonization is an irreversible trend and central to Vale's strategy, extending beyond maritime transport to all products developed for the steel industry. The two second-generation Guaibamax vessels, measuring 340 meters in length and capable of carrying 325,000 tons of iron ore, are slated for delivery starting in 2029. In addition to being ethanol-powered, these ships will also be equipped with rotary sails to harness wind energy, alongside more efficient engines, hydrodynamic devices, and other energy-saving improvements. Bermelho shared this information in advance during a Wednesday video conference, adding that current geopolitical situations, such as the conflict in Iran, highlight the importance of having a flexible fuel system.