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Vale International enters into an LOI for Supplying Iron Ore Agglomerates to Essar Group’s KSA Green Steel Project


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Dubai: Vale International, a wholly-owned subsidiary of Vale SA, a global mining company and a leading producer of Brazilian iron ore and iron ore agglomerates, entered into a partnership with the multinational conglomerate Essar Group.

This collaboration aims to supply iron ore agglomerates for the Green Steel Arabia (GSA) project.

The Letter of Intent (LOI) was signed on September 1, 2023, according to a media statement here.

Through this partnership, Vale will supply Essar Group with 4 million tonnes per annum (mtpa) of Iron Ore Agglomerates (DR grade pellets and Briquettes). Operating from facilities in Brazil and Oman, Vale is a leading provider of high-quality raw materials to Integrated Steel Producers worldwide.

Commenting on the occasion Vale’s Regional Director, Andre Figueiredo said: “Vale International’s LOI with Essar for the annual supply of 4 million tonnes of high-grade Iron Ore Agglomerated products signifies our long term commitment to meet the growing demand for raw material by the steel industry; especially in the Middle East. Vale’s portfolio of high grade Iron Ore agglomerates will have direct positive impact in terms of added value, price competitively and potential lower Carbon footprint; thus fostering the expansion of the low CO2 emission steel industry. We are immensely excited to associate with Essar Group’s pioneering green steel project in Saudi Arabia.”

Naushad Ansari, Country Head for Essar Group in KSA, commented: “Essar is looking at investing about USD 4.5 billion in setting up an integrated steel plant in Ras Al Khair, Saudi Arabia. Through this LOI with Vale, and the previous LoI with Bahrain Steel, we will have secured 100% of the raw material supply of iron ore feed for the Saudi Steel Plant. Our plan is to start production in the year 2027, and are confident of replacing the flat steel imports into Saudi Arabia and the GCC region with our bouquet of products.”

The Essar project aims to be the first Green Steel initiative in the region, aspiring to set a global benchmark for reducing CO2 emissions. It will consist of a direct reduced iron (DRI) capacity of 5.0 million tonnes per annum (mtpa), comprising two modules of 2.50 mtpa each.

Furthermore, the project will include a hot strip capacity of 4.0 mtpa, along with 1.0 million tonnes of cold rolling capacity, as well as galvanizing and tin plate lines. Aligned with the Kingdom’s growing demand for steel goods and the objectives outlined in Vision 2030, the facility will serve various vital steel-consuming sectors, encompassing Construction, Oil & Gas, Automotive, Packaging, and General Engineering.

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