Sino-Brazilian investment flows in the natural resources sector continue to expand, and the increased interest is now spilling over to the shipping industry. King & Wood, Norton Rose and Brazilian firm Machado Myer Senchez Opice have recently advised the Export-Import Bank of China and Bank of China on their combined US$1.2bn loan to Rio de Janeiro-based company Vale, the world’s largest producer of iron ore.

Vale intends to borrow US$1.2bn from the two Chinese lenders to finance the construction of 12 vessels. The Brazilian conglomerate commissioned Rongsheng Shipbuilding and Heavy Industries to build the vessels back in August 2008. The vessels, which will be owned by Vale Shipping Singapore, will be used to transport iron ore to China from Brazil. Each ship will be able to carry 400,000 deadweight tonnes of ore.

“We are currently seeing increased activity in the shipping sector and this loan agreement is an indication of the potential in the market,” said Nigel Ward, Beijing-based banking partner at Norton Rose.

China's direct investment in Brazil soared to a projected US$12bn this year and as commercial ties continue to flourish, shipping and finance lawyers in both regions can also expect more work to come from the logistics sector as well as the dominant resources sector. ALB

Brazilian firms in China

 Recent Sino-Brazilian deals

Related stories:

• International alliances key to outbound M&A (23 September 2010)
• BRIC: Sino-Brazilian energy deals to drive new firm alliances (9 September 2010)