MEED reported that Brazil's Vale has invited at least one strategic partner to participate in its USD 1.35 billion iron ore pelletizing plant located at Sohar Port in Oman due to concerns regarding gas allocations.
The source said that the mining conglomerate has approached Kuwait's Gulf United Steel Holding Company about potentially taking a shareholding in the self funded complex which on completion will house a two train iron ore pelletizing plant with an initial production capacity of 9 million tonnes per year.
He said that "Vale is worried about the gas allocation and has approached Foulath to discuss joining forces with them. However, Foulath told them it was too late and they did not want to be involved.
Foulath could offer a solution to Vale's fears that it might not get a full gas allocation because Foulath's main shareholder is the Gulf Investment Corporation, an asset management company that is equally owned by the member states of the GCC including Oman.
The pelletizing plant, which will make iron pellets essential to the steel making industry will be supplied with iron ore from Vale and cover an area of 1 million square metres. The complex will also include a distribution centre with a throughput capacity of around 40 million tonne per year.
Foulath's reluctance to be involved may stem from the fact that the company is planning its own USD 700 million, 7 million tonne per year pelletizing plant in the sultanate, located at the southern port city of Salalah. However, the source adds that the Foulath plant will use oil and not gas as its primary fuel source and work will only press ahead when it secures enough markets for its pellets. The plant is a JV with Japan's JFE Steel Corporation.
GIC owns 50% of Foulath. A further 25% is owned by Qatar Steel, 10% each by the Kharafi Group of Kuwait and the National Industries Group of Kuwait and 5% by the Kuwait Foundry Company. Vale is one of the largest mining companies in the world as well as one of the largest producers of iron ore pellets.
(Sourced from MEED)
