Vale Oman Reports Slump in Output Last Year

Vale Oman Pelletizing Company, the Omani-Brazilian joint venture behind the world-scale pelletizing plant and stockyard at Sohar Port, has reported a 17.5% slump in output last year, attributable largely to reduced raw material supplies from its Brazilian mines, among other pandemic-related constraints.

Production of direct reduction iron (DRI) pellets — the feedstock for steel mills in the GCC and Middle East — dropped to 7.625 million tons in 2020 versus 9.245 million tons in 2019. Output during the fourth quarter of 2020 fell 27.3% to 1.748 million tons, down from 2.404 million tons in Q4 2019.

Commenting on its performance, Rio de Janeiro-headquartered Vale, one of the largest mining companies in the world, said that while supplies of iron ore feedstock from its mines in Brazil were partially restored in 2020, after the halt in operations during the previous year, the outbreak of Covid-19 posed new challenges.

“Although the pandemic-related impacts and measures reduced productivity in all businesses and postponed, in 2020, the start-up of two new iron ore assets, Vale remains confident to achieve 400 million tons per year (mtpy) by the end of 2022,” it stated in a report of its Q4 2020 and Year 2020 performance.

Set up with an investment of around US$2 billion in 2011, Vale Oman’s giant pelletizing plant at Sohar Port features two pelletizing trains each with a capacity to produce 4.5 million tons per annum of direct reduction pellets (DRI).

Iron ore for the plant is shipped in from Vale’s Brazilian mines by Very Large Ore Carriers (VLOCs) of a capacity of around 400,000 metric tons.

The Valemax vessels use a 1.4km long deep water jetty at Sohar to discharge their feedstock, while smaller bulk carriers ship the DRI pellets to markets around the GCC and Middle East.

Sohar also serves as a major distribution center for the Brazilian miner in the Middle East. Vale’s Sohar Industrial Complex features a massive stockyard with a capacity to handle around 40 million tons of raw iron ore to supply steel plants across the Middle East, North Africa and Asia, including India.

Vale Oman is 70% owned by Vale SA, with OQ — the Omani government’s integrated energy flagship —holding the balance 30%.