Vale, one of the world's top three iron ore producers, has partnered with Shanxi Jinnan Iron and Steel Group (Jinnan Steel) of China to establish a new cooperation. The two companies plan to build an iron ore processing plant in Sohar Port and Freezone, Oman. This region is a major maritime and industrial hub located along the Arabian Sea coastline in northern Oman.
The initial investment in the processing plant exceeds $600 million, aiming to supply iron ore for pellet and briquette production in the region, which is crucial for producing steel products via direct reduction. The facility is expected to begin operations in mid-2027, processing 18 million tons of iron ore annually and producing 12.6 million tons of high-grade concentrate.
Vale will invest $227 million to connect the processing plant to local lump production facilities, while Jinnan Steel will invest around $400 million to build, own, and operate the plant. Vale's CEO, Gustavo Pimenta, stated that this project is vital for meeting the global demand for high-grade iron ore and expanding the company's presence in the Middle East.
Founded in 1942, Vale is based in Rio de Janeiro, Brazil, and is a leading iron ore producer and exporter globally, often referred to as the "crown jewel" of Brazil. Jinnan Steel, established in 2014 with a registered capital of 600 million yuan, operates in various sectors, including steel production and renewable energy, and has recently entered the top 50 steel producers worldwide.
This project marks Jinnan Steel's first venture in Oman, showcasing its expertise in magnetic separation technology. This technology is crucial in iron ore processing to separate iron minerals from waste rock, enhancing the ore's quality. Vale plans to replicate this investment model in other strategic locations, including Saudi Arabia and the UAE, as well as in Brazil and the US.
Recently, Vale reported its third-quarter results, showing a net revenue of $9.55 billion, a 10% year-over-year decline, with iron ore production reaching around 91 million tons, the highest since late 2018.
