Oman and Etihad Rail Company signed a Memorandum of Understanding (MoU) with the Brazilian mining company Vale to transport iron ore and its derivatives between the Sultanate of Oman and the UAE.
The agreement was signed on May 13 in Abu Dhabi, by the Chairman of the Board of Oman and Etihad Rail Company, Ahmed Al Musawa Al Hashemi and Rogerio Nogueira, Product and Operations Manager of Vale, in the presence of the Minister of Energy and Infrastructure, Suhail Al Mazrouei, and the Brazilian Ambassador to the UAE, Elaina Zugaib.
Under the cooperation agreement, the two companies will explore rail as an additional mode of transport to complement Vale’s activities in port in Sohar. This will improve the connectivity between port’s free zone and the UAE factories and distribution centres for Vale’s iron ore products and derivatives.
“The MoU highlights the interest of potential users in utilising the UAE – Oman Railway network and benefiting from its fast, sustainable, reliable, and cost-effective services. We are proud to partner with a leading international company like Vale, which has a long history and extensive global experience in the production of iron, utilizing rail as a primary means of transportation for its logistical operations,” the CEO of Oman and Etihad Rail Company said.
The representative of Vale said that the agreement will support company’s plans to develop industrial complexes in the UAE and Oman to produce low-carbon products for the steelmaking industry, while reinforces the development of logistics segment in the region, strengthening the economic and trade activities.
“The agreement is in line with our desire to continue to work on and establish strategic partnerships with major companies in the United Arab Emirates and Oman supporting economic growth, continued development and investment in both countries,” the Minister of Energy and Infrastructure.
Vale entered Oman market in 2007 and currently owns a pellet plant and distribution centre in Sohar. The company can produce 9 million metric tonnes of following a USD 2 billion investment to develop the plant.
In November 2022, Vale signed three agreements with local authorities and clients to jointly study the feasibility of developing industrial complexes in Saudi Arabia, the United Arab Emirates and Oman to produce low carbon footprint products to the steelmaking industry. The parties will develop mega-hubs to produce hot briquetted iron and steel products to supply both the local and seaborne markets with significant reduction of CO2 emissions.
The Brazilian company is expected to build and operate concentration and briquetting plants within the hubs, providing secure supply of high-grade agglomerated products. Local parties are expected to promote the construction of the required logistics infrastructure.
Oman and Etihad Rail Company is a joint venture established by the UAE’s rail company and Oman Rail responsible for the design, construction and operation of a 303 km rail line connecting the Sohar Port with the UAE National Rail Network. USD 3 billion is the estimated value of the project under which the line will start from Abu Dhabi, ending in Sohar via Al Ain and will be designed for passenger and freight services. The network will contribute to the development of trade, facilitating fast cross-border transport.
On 23 February, Etihad Rail announced the completion of the rail system and launched freight services along the entire UAE’s rail network operated by 38 locomotives capable to transport 60 million tonnes annually and 1,000 multi-purpose wagons.