A container vessel offloads its cargo at Dapukou container wharf at Ningbo Zhoushan Port in East China’s Zhejiang Province on September 5, 2020. Photo: cnsphoto

Brazil's Vale, the largest producer of iron ore and nickel in the world, signed a contract of investment with Ningbo Zhoushan Port Company, the busiest port in the world in terms of cargo tonnage, on Thursday. 

The Brazilian iron ore maker will jointly set up a company with Ningbo Zhoushan Port, with each investing 50 percent in the company's establishment and operation, according to media reports. The company will be based in Shulanghu in Zhoushan, Ningbo in East China's Zhejiang Province. 

The two companies have already launched a project with a total investment of 4.3billion yuan ($624million) and will develop a new stockyard and two loading berths. Following establishment, the project will significantly reduce Vale's overall supply chain costs, according to the mining firm. 

Brazil's Vale is an important provider of iron ores to China. In the first nine months of this year, China imported around 128 million tons of iron ores from Vale, accounting for 65.6 percent of total sales of the company, up 59 percent from last year. 

In 2019, 190 million tons of iron ores were exported from Brazil to China, and the volume is expected to remain at least the same this year, a Vale representative was quoted as saying in media reports, 

The project aims to strengthen the capacity of the Zhoushan Port and is also Vale's biggest investment in China so far. According to the Ningbo-Zhoushan port, Shulanghu terminal posted 58.5 million tons of iron ore throughput in the first 10 months of this year, an increase of 20 percent year-on-year.

Vale has been in commercial cooperation with China for 47 years. Earlier in August the company began producing high-grade iron ore fines at the new grinding hub at China's Shulanghu Ore Transfer Terminal with an annual capacity of three million tons. The project was carried out in cooperation with Ningbo Zhoushan Port Group and will partially feed the growing demand for pellets in China's steel sector.