Vale has reportedly saved $1.3bn on a long-term contract of afreigtment (COA) with Pan Ocean due to lower bunker prices.
In September 2009 Pan Ocean agreed the 25-year COA with the Brazilian mining giant with the first ships starting the contract in 2011.
Now the two companies say they have “mutually agreed” to change the terms of the contract for the remainder of its tenure.
Pan Ocean said the revision, which took effect at the end of December 2018, will apply to the remaining 19 years of the COA.
The South Korean shipowner said the changes were “made at the request of Vale” and will not have any influence on the company.
“The existing terms and conditions regarding freight, cargo quantity, and the others contractual terms remain the same with no material impact to the company’s revenue,” Pan Ocean said.
“However, estimated sales amount will be decreased to about $4.5bn from $5.8bn due to the lower bunker fuel oil price.”
Clarification: This article has been updated since first publication. An earlier draft incorrectly estimated the sales amount would be reduced to $45bn from $58bn.
