UPDATE 1-Vale wants iron ore talks start in Nov, builds vessels

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By Humeyra Pamuk

LONDON, Nov 17 (Reuters) - Brazilian mining giant Vale (VALE5.SA: Quote, Profile, Research) wants to start benchmark iron ore negotiations for 2010/2011 by the end of this month, a company executive said on Tuesday.

Renato Neves, Vale's Global Iron Ore Director, spoke to reporters on the sidelines of a steel conference in London organized by Metal Bulletin, but did not give further details.

He also said the company was building 16 vessels with a capacity of 400,000 tonnes each to carry iron ore between Brazil and Asia.

"The first one will come to service by the end of next year. We'll use these vessels to reduce our transportation costs," he said.

Asked if this cost reduction strategy would be reflected in price talks, Neves said: "If you can bring iron ore more competitively to Asia everybody will enjoy it," he said.

Vale last year placed a $1.6 billion order for a dozen of the largest class of ore carriers from a Chinese shipbuilder Jiangsu Rongsheng Heavy Industries Co Ltd.