Oman and Etihad Rail Company, the developer and operator of the planned railway network connecting the Sultanate of Oman and UAE, signed a memorandum of understanding (MoU) with Brazil-headquartered global mining giant Vale to transport iron ore and derivative products from the company’s industrial complex in Sohar Port and Freezone to regional markets via the UAe-Oman railway.

A report by the UAE’s state news Agency WAM on Saturday said both parties will work to develop integrated logistics solutions to transport Vale’s products between its Sohar hub and various factories and distribution centres. The report said the MoU also supports Vale’s plans to develop industrial complexes in the UAE and Oman to produce low-carbon products for the steelmaking industry.

In November 2022, Zawya Projects reported that Vale signed MoUs to establish three mega industrial hubs in Oman, UAE, and Saudi Arabia for making low carbon steel products. Under the agreements, Vale will build and operate iron ore concentration and briquetting plants at the hubs, while the local partners, in turn, will provide the necessary logistical infrastructure.

The signing ceremony was witnessed by Suhail bin Mohammed Al Mazrouei, Minister of Energy and Infrastructure and Chairman of Oman and Etihad Rail Company, and Elaina Zugaib, Brazilian Ambassador to the UAE.

Vale operates a $2 billion pellet plant in Oman with annual production capacity of 9 million tonnes and distributes 40 million tonnes of iron ore and pellets using the Sultanate’s deep-water ports, according to its website.

In March 2023, Oman and Etihad Rail Company invited contractors to prequalify for the civil works tenders of the $3 billion mega railway project connecting Oman's Sohar Port to the UAE’s rail network.

(Writing by Anoop Menon; Editing by Bhaskar Raj)

(anoop.menon@lseg.com)