Strategic Partnership Unveiled During Sustainability Week

In a significant development for industrial decarbonization in the Middle East, Vale has formalized a strategic renewable energy partnership with OQ Alternative Energy through a head of agreement signed during Oman Sustainability Week. The agreement represents a milestone in Vale's ongoing efforts to reduce the carbon footprint of its operations in Oman, particularly at its iron ore pelletising plant in Sohar Port. The timing of the announcement during a high-profile sustainability event underscores the strategic importance both companies place on positioning their partnership within the broader context of Oman's national sustainability initiatives. This collaboration brings together Vale's industrial expertise as a global mining leader with OQAE's renewable energy capabilities as part of Oman's state-owned energy conglomerate. The partnership signals growing momentum for industrial decarbonization in the region, where energy-intensive industries are increasingly seeking pathways to reduce emissions while maintaining operational competitiveness. By formalizing this agreement during a week dedicated to sustainability, both companies have effectively highlighted how public-private partnerships can accelerate the energy transition in industrial sectors traditionally reliant on fossil fuels.

Comprehensive Framework Addresses Multiple Energy Needs

The newly signed HOA establishes a comprehensive framework for collaboration across several critical areas, including renewable energy supply mechanisms, land allocation for energy infrastructure, and long-term planning for sustainable power solutions. Rather than focusing solely on immediate energy needs, the agreement takes a holistic approach by addressing both Vale's existing operations at the Sohar pelletising plant and its future energy requirements for the ambitious Green Metallic Mega Hub planned for Duqm. This forward-looking approach reflects recognition that industrial decarbonization requires systematic planning across multiple timeframes and facilities. The framework encompasses technical aspects of renewable energy integration, financial models for energy procurement, and physical infrastructure development necessary to deliver clean power to industrial operations. By addressing these interconnected elements within a single agreement, Vale and OQAE have created a foundation for coordinated action that avoids the fragmentation often seen in industrial sustainability initiatives. This comprehensive approach acknowledges the complexity of industrial energy transitions, which require alignment across technical, financial, and regulatory dimensions to succeed at scale.

Vale Commits to 100% Renewable Electricity by 2030

A centerpiece of the agreement is Vale's commitment to transition its Sohar pelletising plant to 100% renewable electricity by 2030, establishing a clear timeline and target for the facility's decarbonization journey. This ambitious goal represents a significant advancement for heavy industry in the region, where energy-intensive processes like iron ore pelletising have traditionally relied on fossil fuel-based power sources. The commitment aligns with Vale's global sustainability strategy while responding to increasing market demands for lower-carbon materials throughout the steel value chain. By establishing this public target, Vale has created accountability for its Omani operations while signaling to stakeholders, including customers and investors, its intention to address Scope 2 emissions associated with purchased electricity. The 2030 timeframe provides sufficient runway for the necessary infrastructure development and energy procurement arrangements while maintaining pressure for steady progress. This commitment positions Vale's Omani operations at the forefront of industrial decarbonization in the Middle East, potentially establishing new benchmarks for what's achievable in energy-intensive industrial processes in the region.

Executive Leadership Emphasizes Strategic Importance

Senior executives from both organizations have emphasized the strategic significance of the partnership beyond immediate operational benefits. Saleh Al Muslahi, chief executive of Mega Hubs-Middle East and North Africa at Vale, highlighted how the agreement transcends conventional energy procurement by establishing the foundational conditions necessary for large-scale decarbonization. His comments underscored the importance of demand aggregation, infrastructure readiness, and sustainable long-term supply models as critical enablers for Vale's transition strategy. Similarly, Najla Zuhair Al Jamali, CEO of OQ Alternative Energy, positioned the collaboration within the broader context of Oman's industrial evolution, describing it as a new model for sustainable industrial development powered by renewable energy. This executive-level framing reflects how both organizations view the partnership as strategically significant beyond the immediate technical aspects of energy supply. Their comments reveal a shared understanding that industrial decarbonization requires systemic approaches that address both immediate operational needs and longer-term strategic positioning. By articulating these broader perspectives, the executives have effectively positioned the agreement as a blueprint for industrial-scale energy transitions that could be replicated across other facilities and sectors.

Dual-Site Strategy Targets Existing and Future Operations

A distinctive feature of the Vale-OQAE agreement is its dual focus on both immediate decarbonization of the existing Sohar pelletising plant and establishing renewable energy foundations for the planned Green Metallic Mega Hub in Duqm. This two-pronged approach demonstrates strategic foresight by addressing current emissions while simultaneously laying groundwork for future low-carbon industrial development. For the Sohar facility, which produces 11 million metric tons of iron ore pellets annually, the focus will be on transitioning existing operations to renewable electricity without disrupting production. Meanwhile, the planning for the Duqm mega hub incorporates renewable energy from the design stage, potentially enabling more comprehensive decarbonization across both direct and indirect emissions. This parallel approach allows Vale to gain practical experience with renewable energy integration at Sohar while applying those lessons to more ambitious clean energy designs at Duqm. The strategy acknowledges the different challenges involved in retrofitting existing industrial facilities versus designing new operations with sustainability as a core principle. By pursuing both simultaneously, Vale positions itself to make near-term progress while establishing more transformative approaches for future developments.

Vale's Evolving Position in Oman's Industrial Landscape

The renewable energy agreement comes amid Vale's expanding footprint in Oman's industrial sector. The Brazilian mining giant recently consolidated its position by acquiring the 30% stake previously held by OQ in the Sohar pelletising plant, making Vale the sole owner of the facility. This ownership consolidation, combined with the new renewable energy partnership, reflects Vale's long-term commitment to its Omani operations and confidence in the region's industrial future. Beyond the Sohar plant, Vale has been actively developing new industrial partnerships in Oman, including an agreement signed last October with Chinese steelmaker Jinnan Iron & Steel Group to establish an iron ore concentration plant in Sohar. This facility is designed to supply feedstock for iron ore pellet and briquette production throughout the Middle East, further cementing Oman's position as a regional hub for iron and steel value chains. These developments illustrate how Vale is strategically positioning its Omani operations within broader regional industrial networks while simultaneously advancing sustainability objectives. The company's expanding investments suggest confidence that decarbonization efforts will enhance rather than hinder its competitive position in the region, potentially attracting customers and partners increasingly focused on supply chain emissions.

Regional Significance for Industrial Decarbonization

The Vale-OQAE partnership carries broader significance for industrial decarbonization efforts across the Middle East, a region where energy-intensive industries have traditionally benefited from abundant fossil fuel resources. By demonstrating that even highly energy-intensive processes like iron ore pelletising can transition to renewable electricity, the agreement establishes an important precedent for other industrial operations in the region. The partnership also highlights Oman's emerging position as a leader in industrial sustainability, leveraging its renewable energy potential to attract and retain global industrial partners committed to decarbonization. This alignment between national energy transition strategies and industrial development creates mutual benefits: global companies like Vale gain access to renewable energy resources, while Oman advances its economic diversification beyond traditional hydrocarbon industries. The collaboration model being established could potentially be replicated across other industrial sectors and facilities in Oman and neighboring countries, creating a template for how traditional energy producers can leverage renewable resources to maintain industrial competitiveness in a carbon-constrained global economy. This regional leadership position could prove increasingly valuable as global markets implement carbon border adjustment mechanisms and other policies that advantage lower-carbon industrial products.

Technical and Infrastructure Challenges Ahead

While the agreement establishes important strategic direction, significant technical and infrastructure challenges remain in implementing large-scale renewable energy for industrial operations like Vale's pelletising plant. The facility's high energy demand and continuous operation requirements necessitate reliable, dispatchable power solutions that can match industrial load profiles. Addressing these challenges will likely require a combination of technologies, potentially including solar generation, energy storage systems, and grid integration strategies to ensure uninterrupted operations. The agreement's framework acknowledges these complexities by addressing land allocation for energy infrastructure, suggesting that new dedicated renewable energy assets may be developed specifically for Vale's operations rather than relying solely on existing grid resources. Additionally, the partners will need to develop technical solutions for integrating variable renewable energy into industrial processes designed around consistent power availability. These challenges highlight why the partnership extends beyond simple energy procurement to include infrastructure planning and technical collaboration. Successfully navigating these complexities will require ongoing coordination between Vale's operational teams and OQAE's energy specialists to develop solutions tailored to the specific requirements of iron ore processing while maintaining production reliability and product quality.

Key Takeaways:

• Vale has signed a strategic head of agreement with OQ Alternative Energy to supply renewable energy for its Sohar pelletising plant and planned Green Metallic Mega Hub in Duqm, committing to transition the Sohar facility to 100% renewable electricity by 2030

• The comprehensive partnership framework addresses multiple dimensions including energy supply mechanisms, land allocation for infrastructure, and long-term planning, creating a blueprint for industrial decarbonization in the Middle East

• Vale has strengthened its position in Oman's industrial landscape by becoming sole owner of the 11 million metric ton per year Sohar pelletising plant after acquiring OQ's 30% stake, while simultaneously developing new partnerships including an iron ore concentration plant with China's Jinnan Iron & Steel Group