Vale and Jinnan Iron & Steel Group, a renowned Chinese steelmaker, have announced a joint partnership to establish an iron ore concentration plant in Sohar Port and Freezone, in Oman. With an initial investment exceeding US$ 600 million, the state-of-the-art facility will supply high-quality iron ore for production of pellets and briquettes in the region, which will be key for the manufacturing of low-carbon steel products via direct reduction route.

The Sohar Concentration Plant, scheduled to commence operations by mid-2027, will process 18 million tons of low-grade iron ore annually, producing 12.6 million tons of high-grade concentrate. Vale will invest US$ 227 million to connect the plant to its agglomerate facilities in the region. Jinnan will invest approximately US$ 400 million to build, own and operate the plant.

At the heart of this collaboration is a commitment to innovation; iron ore will be upgraded into a higher-grade concentrate to produce high-quality pellets and, in the future briquettes, with reduced environmental impact. With its strategic location, the new plant will therefore strengthen Oman’s role as a key supplier to regional and international steel markets.

Gustavo Pimenta, President of Vale, emphasized the significance of this investment saying, “The Sohar Concentration Plant represents a key investment for Vale as we enhance our ability to meet the increasing global demand for high-grade iron ore and further build our presence in the Middle East. This project brings together Brazil’s capacity of producing high-quality iron ore and Oman’s prime location and infrastructure to amplify the integration between the two countries, while it also reinforces our partnership with China through Jinnan. We are confident that this partnership not only strengthens our operations in the region but also creates long-term value for the global steel industry”.

The joint partnership between Vale and Jinnan represents a significant milestone for both companies and the Sultanate of Oman. As Jinnan’s first project in the country, this collaboration highlights Oman’s appeal as a destination for high-value industrial investments. Jinnan, with its leading edge in magnetic separation technology, brings a wealth of experience that will integrate seamlessly with Vale’s expertise, creating a world-class production process in Sohar.

Zhang Tianfu, CEO of Jinnan Iron and Steel Group said, “This partnership is a unique opportunity to blend Jinnan’s rich experiences in modern low-carbon steelmaking with Vale’s proven expertise in iron ore production. By working together in Sohar, we aim to redefine steelmaking in the Middle East, bringing efficiency and quality to the forefront. We are proud to play a role in supporting Oman’s industrial ambitions and look forward to the long-term impact of this project.”

Emile Hoogsteden Sohar Port CEO and Deputy CEO of Sohar Freezone commented, , “Sohar stands as a destination connecting businesses to the world. This investment is a key step in our long-term strategy to attract high-value projects to Oman and fostering a business-friendly environment. Through our fully integrated industrial and logistics ecosystem, we are driving sustainable growth and solidifying Oman as a key player in the global steel industry, enhancing trade efficiency and boosting economic development.”

Vale intends to replicate this investment model for the Mega Hubs. In these industrial hubs, Vale is expected to build and operate concentration and briquetting plants; local parties are expected to promote the construction of the required logistics infrastructure; and investors and/or clients to construct and operate the direct reduction plants and be off takers of HBI. Vale has announced three Mega Hubs in the Middle East (Oman, Saudi Arabia and United Arab Emirates) and has signed agreements to develop the same model in Brazil and the USA.