Construction work on a new low-carbon industrial complex, planned by Brazilian mining conglomerate Vale at Duqm in the Sultanate of Oman, could commence as early as from 2027, according to a top company executive.

Oman is among a trio of Gulf countries tipped to host what Vale has described as ‘Mega Hubs’ designed to produce a greener version of its iron ore concentrates and hot briquetted iron (HBI) as feedstock for steels mills operating in the wider Middle East region.

In November 2022, Vale signed an agreement with Omani authorities to jointly study the development of one such Mega Hub at the Special Economic Zone in Duqm. A land lease agreement, covering a 6.78 sq km site, was also signed with the Port of Duqm for the establishment of the proposed industrial complex. Similar pacts were also inked with authorities in Saudi Arabia and the UAE for the development of Mega Hubs in those countries.

Plans for these ambitious Mega-Hubs are currently being firmed up, said Vale CEO Eduardo Bartolomeo. “We are maturing our agreements with authorities in the United Arab Emirates, Saudi Arabia, and Oman and a partner in Brazil for joint assessments on the construction of Mega Hubs, with works for a first facility starting in 2027,” he stated in Vale’s newly published 2023 Annual Report.

According to Vale, hot briquetted iron (HBI) and other commodities produced by these Mega Hubs will enjoy a far lower carbon footprint than current types of feedstock supplied to steel mills.

“The parties aim to cooperate in the development of these Mega Hubs to produce hot briquetted iron (HBI) and steel products to supply both local and transoceanic markets, with significant reduction of CO2 emissions. The production of HBI using natural gas emits approximately 60% less CO2 when compared to the production of pig iron using the integrated Blast Furnace-Basic Oxygen Furnace (BF-BOF) route. In the future, replacing natural gas with hydrogen and using renewable energy could eliminate CO2 emissions,” said Vale in the report.

“Vale expects to build and operate the iron ore concentration and briquetting plants at the hubs, ensuring the supply of high-quality agglomerated products; that local partners promote the construction of the necessary logistical infrastructure; and that investors and/or customers build and operate the direct reduction plants and are the purchasers of HBI for the export and domestic markets. These Mega Hubs are supposed to supply different markets around the world, supporting the decarbonization of the steel industry,” it further stated.

When eventually implemented, the new Mega Hub will add to Vale’s already sizable investments in Oman. The mining giant currently operates a pair of iron ore pelletising plants with a total capacity of 9 million tonnes per year (Mtpy) at Sohar Port and Freezone. Wholly owned by Vale, the complex is integrated with a 40 Mtpy capacity distribution centre which supplies DRI pellets as feedstock to steel mills in the Middle East, among other markets.