The Philippine port operator said that Brazil's Vale will begin its iron ore distribution operations in the Philippines this weekend, from where the world's top miner of the raw material will transfer China bound ore carried by big ships.

China barred Vale's giant dry bulk vessels from entering its ports in a bid to protect its shipping industry which has been hit hard by the economic downturn and falling freight rates.

With access to China shut, Vale has set up a transshipment hub in the Philippines' Subic Bay port, where its mega ships which at 400,000 deadweight tonnes each are the world's biggest dry bulk carriers can berth and transfer cargo to smaller vessels to be able to reach Chinese ports.

Mr Roberto Garcia chairman of SBMA in a statement said that "When Vale starts full operations on February 12, we expect the SBMA (Subic Bay Metropolitan Authority) to earn some 70 million pesos (USD 1.64 million) in additional income in the first year alone because of the projected increase in ship calls.”

Vale's Ore Fabrica, the world's largest dry bulk floating storage vessel, arrived in Subic Bay last week. The 280,000 deadweight-tonne vessel will serve as a platform to transfer iron ore from the big ships called Valemaxes to smaller vessels for transport to Asian markets led by China.

(Sourced from Thomson Reuters)