Cosco has safety concerns about the Valemax vessels, which are almost as big as the Bank of America Tower in New York, Ma said. The miner’s plan to spend at least $8 billion on a fleet of 35 mega-ships has also hit shipowners’ earnings by creating new competition, and stoked tensions between Brazil and China according to Johnson Leung, a Jefferies Group Inc. analyst.
The state-owned company, known as Cosco, expects a “big” impact on operations from the boycott and it’s considering filing a complaint with China’s Ministry of Commerce, President Ma Zehua said in an interview in Beijing. Vale, the world’s biggest iron-ore producer, has shunned Cosco’s fleet for about two months, even if it meant using more expensive ships from other owners, he said. Unit China Cosco Holdings Co. fell to the lowest in almost four months in Hong Kong.
“Many recent steps taken by Vale aren’t rational,” Ma said. “We believe their decisions are based on their perception that Cosco is doing something to lobby the government and not allow Valemaxes into Chinese ports.”