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Strategies & Market Trends : Fundamental Value Investing

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To: E_K_S who wrote (2826)	2/27/2013 1:05:45 PM
From: bruwin	2 Recommendations Read Replies (2) of 4719

Just thought I'd put forward something about VALE in case you weren't aware of it ... VALE is busy having a major Import/Export Iron Ore hub built about 450kms North West of Singapore on the west coast of Malaysia (See pic below). This site will receive raw iron ore from mines in Brazil which will be delivered via the MS Vale Brasil. This vessel will be larger than the previous largest iron ore carrier, the MS Berge Stahl, which could transport in excess of 364000 tons of iron ore per trip. The MS Vale Brasil will be the largest vessel of its kind in the world capable of carrying about 400000 tons of ore. On shore, VALE is building an iron ore "processing" facility which will convert the raw ore into a semi processed pellet form. Once that conversion has taken place the iron ore pellets will be exported from the same facility to various customers in the Far East. Needless to say, China will be one of the major recipients. I was fortunate to have worked on the original costing and methodology of construction that commenced about 5 years ago, so I've gotten to know something about the background and content of the project. What you see in the photo is a 1.8km long steel piled Access Trestle along which conveyor belts will transport raw iron ore from a vessel at berth to the stacking area on land. The same belts will convey the ore pellets to smaller waiting ore carriers for export. The reason for the 1.8km length of Trestle is to get to a required water depth of about 27m in order to enable the fully loaded MS Vale Brasil to berth and be offloaded. To the best of my knowledge the piles you see in the foreground are 1.8m in diameter with steel wall thicknesses of 25mm. Their overall lengths vary from about 70m to 80m. That length is required due to the poor founding conditions one generally finds in that part of the world, so the pile loads are transferred via skin friction as opposed to end bearing. The facility will be constructed in several phases and the first should come on stream in 2014. So, ... should semi-processed iron ore be in demand in the years ahead, VALE should be well positioned to take advantage of it, especially in that part of the world where so much fabricated steel is made and utilized.

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