Vale (NYSE: VALE) and Chinese steelmaker Jinnan Iron & Steel Group announced on Monday a joint investment of $627 million in an iron ore concentration plant in Oman.
The facility will be located in Sohar, a port city about 200 km north of the capital, Muscat. It will have the capacity to process 18 million tonnes of low-grade iron ore a year starting in 2027. The aim is to produce 12.6 million tonnes of high-grade concentrate annually.
Vale will invest $227 million to connect the plant to its pelletizing facilities in the region. Jinnan will invest about $400 million to build and operate the plant, which it will own.
“This project brings together Brazil’s capacity to produce high-quality iron ore and Oman’s prime location and infrastructure to enhance integration between the two countries, while also reinforcing our partnership with China through Jinnan,” Vale’s new CEO Gustavo Pimenta said in a release.
The iron ore is to be transformed into a higher-quality concentrate for the production of premium pellets and, in the future, briquettes, with a reduced environmental impact.
This marks Jinnan’s first project in Oman, supporting the country’s industrial ambitions. The company is known for its leading edge in magnetic separation technology.
Vale intends to replicate this investment model across its mega hubs. The miner has announced three mega hubs in the Middle East (Oman, Saudi Arabia, and the United Arab Emirates) and has signed agreements to develop similar projects in Brazil and the United States.
Shares in Vale gained 1.7% to $62.76 apiece by mid-Monday afternoon in New York, valuing the company at $284.8 billion.
