The project calls for a plant with capacity to produce 9 million tonnes a year (t/y) of pellets and the supply of material handling equipment for 40 million t/y of imports and exports, Gomes said.

The scheme is being financed entirely through Vale’s own financial resources, he added.

The Sohar Industrial Port Company is providing the quay Vale will use for importing ore and exporting pellets.

The pelletising plant is due to be completed at the end of 2010 but the company’s operations at the site could be expanded in the future.

“We are studying the possibility of building a second plant in Sohar with capacity of 10 million t/y,” said Gomes

Vale has the world’s largest proven iron ore reserves. Sohar is its first greenfield pelletising project outside Brazil.

Gomes was speaking at MEED’s Middle East Steel 2008 conference in Dubai on 13 October.