Vale breaks ground in Port of Sohar.

Vale is the world’s largest producer of iron ore and pellets and the world's second largest diversified mining company and present in more than 30 countries. In May 2008 an agreement was signed between Vale and Sohar Industrial Port Company SAOC (SIPC), a 50/50 joint venture between The Government of the Sultanate of Oman and the Port of Rotterdam to construct a production facility and distribution centre in the Port of Sohar. This is Vale’s first iron ore venture outside Brazil and the total investment is estimated to US$ 1.356 billion. The contracts were executed during the visit in Brazil in November 2008 by HE Ahmed Macki, Minister of National Economy & Deputy Chairman of the Financial Affairs & Energy Resources Council and HE Maqbool bin Ali bin Sultan, Minister of Commerce and Industry and Chairman of Sohar Industrial Port Company.

Today Vale celebrates the laying of the first cornerstone at its new industrial complex in the Port of Sohar, Oman and the start up is planned for the second half of 2010.

The Oman project comprises the construction of a pelletizing plant with initial production capacity of 9 million ton per year (mtpy) of direct reduction pellets and a distribution center with capacity to handle 40 Mtpy at the Sohar Industrial Port.

The Sohar Industrial Port is a deep water harbor and in addition to Vale’s construction of the pelletizing plant, SIPC will develop a new jetty with a draft of 23m that for vessels up to 400 dwt. Its strategic location outside the Straight of Hormuz fits well with Vale’s growth plans in the Middle East, offering several logistics advantages for the supply of direct reduction pellets to the Middle Eastern, North African and Indian steel markets.

Another advantage is the fact that Oman is a country with an excellent business environment. Even in times of the financial crisis, Sohar and Oman is furthering its development.

To support the transportation of iron ore from Brazil to the Sohar industrial complex, Vale has signed a framework agreement with Oman Shipping Company (OSC) for the construction of four Very Large Ore Carriers (VLOC with 400,000 tons capacity) to be hired by Vale through a long term charter.