São Paulo – Brazilian mining company Vale, the Sohar Port and Oman National Investments Development Company SAOC (TANMIA) signed a memorandum of understanding for the developing of a logistics corridor that will allow the exports of minerals mined and processed in the Arab country. The agreement was signed at the end of March. It establishes the creation of the Sohar Dry Bulk Logistics Corridor and enables the logistics structure, until now only used by the Brazilian mining company, to be used by local companies.
“Currently, Vale imports iron ore from Brazil and exports pellets and blended iron ore. The main goal of the Sohar Dry Bulk Logistics Corridor is to immediately enable the exports of minerals that are mined and processed in Oman to enter international markets at competitive prices. Our initial strategy was to keep the deep-water bulk terminal as captive, but now the terminal will be open for commercial operations to allow the opportunity for local enterprises to use and export through Vale’s infrastructure and operations which were established in 2011”, says a statement by the company sent to ANBA.
According to the mining company, thanks to the excellent road connectivity in Sohar and the upcoming cargo railway project, the agreement can immediately support the efficient flow of mining cargo to Sohar Port. Vale’s facilities in the Arab country allows for ships with capacity of up to 400,000 tons each to be berthed at the Omani port.
Vale’s operations in the coastal city of Sohar include a pelletizing plant with a production capacity of 9 million tons of pellets per year and a deep-water bulk terminal with a throughput capacity of 40 million tons per year, with 20 million input and 20 million output. According to the mining company’s statement, the new project will help to increase the utilization of the export capacity of the current facilities.
Vale states that there won’t be any new investments in this corridor. The structure of the mining company in the Arab country, opened five years ago, cost USD 2 billion. The Brazilian company will continue to be the operator of the deep-water terminal in the SOHAR Port.
“Through this agreement, we will be increasing the utilization of our terminal. Overall, this is a win-win scenario for everyone involved: our existing infrastructure investments will be more fully utilized, which can generate more income and more employment, and we can help to support Oman’s diversification away from hydrocarbons, and allow the mineral-rich Sultanate to compete in global markets at competitive rates. Potentially, this will result in a decrease of unit cost that will increase our margin”, says the statement.
*Translated by Sérgio Kakitani
