A pleasant visit to the Chinese ambassador to Brazil, Chen Duquing, led us to recall those decisive negotiations that led to the great opening of the Chinese market to Vale do Rio Doce's Brazilian ore, in the late 1970s.
At that time, we had a difficult period of trying to enter the Chinese market, already in frank import of Australian ore, in a more favorable condition for them, logistically. The main advantages of the Australians were: the precariousness (draft) of Chinese ports, in addition to the geographical distance much smaller than ours. Even so, the first trial sale was made in 1973, in very adverse conditions, as the ships used were very small (3 shipments of 2"-8" lump ore).
The story was very similar to the Japanese of the early 60s. The Chinese coast of the Pacific Ocean is shallow and presents rocky areas of difficult dredging, which made the use of large bulk carriers practically unfeasible under those conditions, and the freights, very high .
During this period, the Chinese were already vaguely familiar with the Brazil-Japan Konzept of the 1960s, and were getting closer and closer to the Australians, who offered them advantageous shares in exchange for long-term contracts. The possibility of Brazil as an exporter remained unfeasible, from the Chinese perspective. Almost impossible.
We didn't give up, and insisted on providing the technical operational details of Konzept Japão Japão to them. It was not just the scale of the ships, but also the versatility of their use, with the return of oil from the Persian Gulf, an operation that worked for several years with Petrobras. (China, at the time, was already an exporter of heavy oil).
Where Japan and the Philippines come in
After talking to Japanese mills, we proposed using a port in the Philippines, as it represented the worst bottleneck in the equation. We asked Kawasaki Steel to use a large port that served that company's sintering plant in the Philippines, and that used fine ore from CVRD, following the Brazil-Japan model. This port with a romantic name, Cagayan de Oro, already received large Brazilian bulk carriers.
At a reasonable rate, Kawasaki accepted our proposal to use the port to stock the ore that was destined for China, being reloaded on smaller ships (30 thousand DWT) destined for Dailan (Dairan of the Japanese) for the Ansham plant. It was then that we made the proposal to China, which accepted the challenge.
As President of Vale (1979), I was in the Philippines alongside Brazil's minister of mines and energy Shigeaki Ueki, whose support was decisive with President Ferdinando Marcos, of the Philippines, thanks to his position as an importer of heavy oil from China.
The problem with the Philippine government has been satisfactorily resolved. In addition, Petrobras continued to import Chinese heavy oil, using the i/-ore carries of 250,000 DWT (type of versatile vessel) that transported iron ore and returned with 1961 Gulf oil, under the CVRD - Usinas Japonesas contract. Thus were made the first shipments to China, inside this Konzept.
In the meantime, the Chinese developed the port of Beilung (in the Shanghai area, near Nimbo), where they began to dock these ships, and then re-transport the ore to BaoSteel in Shanghai in small ships.
At this time, the influence of the Brazil-Japan Konzept in the development of port infrastructure and its consequences in China could be noted. BaoSteel's consolidation in Shanghai took place with the construction of the port of Magishan (an island close to Shanghai) for ships of 200,000 DTW and with possibilities for expansion, thus becoming the largest steelmaker in China.
The opening of the Chinese market
The Port of Beilung (transshipment) received Cape Size class ships. However, it was only in 1985, with the expansion of Baosteel, that large ships began to operate directly with Shanghai and, thus, ended the triangulation with Mindanao (Cagayan de Oro). The great Chinese steel boom in recent years, and the new Port of Majishan, consolidated our position in China, today the largest steel complex in the world, with 300 million tons in 2006.
The proactive initiatives on our side and the healthy collaboration between Vale, Petrobras and Itamaraty, represented by Ambassador Paulo de Tarso Flexa de Lima, allowed us to compete with the Australians, who in the meantime, increased the depth of their ports (background coral), becoming even more aggressive.
Thus, today's Vale, in a bold and strategic initiative with the Chinese, is already thinking of increasing the size of ships above 300,000 DWT to establish a kind of "shuttle service", similar to that carried out by Bergstahl (380,000 DWT) between the Port of Madeira Rotterdam. But this would require additional work in Majishan.
Thus, a polygon of navigation legs with multiple benefits was created, which shows that healthy competition can be an instrument to stimulate the acceptance of challenges, and thus, transform an obstacle into an advantage, as the Chinese say. This is what the transformation of a physical distance into an economic distance represents. Similar to the Japanese case, the export of a product of very low value (at the time), the longest commercial distance in the world, becomes economically viable. For China, its maritime logistics are now applicable to all higher value products such as bulk and containers. For other countries in the world, the reduction in agreements provided by the new maritime logistics is still used today in ports such as Rotterdam, in the Netherlands; Foz Sur Mer, in France; Bakar, Croatia; Hamburg, Germany; Constantza, Romania and Toronto, Canada.
Eliezer Batista held the presidency of Vale twice, built the Port of Tubarão and was responsible for implementing the Carajás project. He was minister of mines and energy in the government of João Goulart and secretary for strategic affairs of Fernando Collor.