Vale signs agreements with Chinese companies to reinforce strategic agenda in Asia

Aerial view of the Indonesian Morowali Industrial Park. Credit: IMIP

Vale announced on Wednesday seven agreements with different Chinese partners to reinforce its strategic agenda in Asia.

Vale’s subsidiary in Indonesia (PT Vale Indonesia), together with Taiyuan Iron & Steel Co. Ltd. (Tisco) and Shangdong Xinhai Technology Co. (Xinhai), have signed a Project Investment Agreement for a project to build a Rotary Kiln-Electric Furnace (RKEF) ferronickel processing plant with a minimum annual production of 73,000 metric tons of nickel and other supporting facilities in the district of Morowali, Indonesia.

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The project, expected to start up in 2025, will utilize gas-fired power to supply electricity and is anticipated to be a green and low-carbon project.

The company also signed a cooperation agreement with Baoshan Iron & Steel, a subsidiary of China Baowu, relates to the development of biochar in the steel industry.

Biomass energy is increasingly seen as a strategic route to low-carbon metallurgy. The agreement is part of Vale’s efforts to reduce scope 3 emissions by 15% by 2035.

The miner and major construction machinery group XCMG also signed a greenhouse emissions MOU to co-develop the world’s first zero-emission motor grader for mining. 

The machine, which is used to level mine accesses, will be tested at mines in the states of Minas Gerais and Pará. If tests turn out positive, Vale will buy several models. Currently, the company has 90 motor graders.

In addition, Vale has signed multi-year MoUs with the Industrial and Commercial Bank of China (ICBC) and with Bank of China (BOC) respectively.

According to the MoUs, the two Chinese banks intend to provide credit support to Vale through loan facilities, project finance, trade finance, asset finance, and bank guarantees among others.

Vale also announced that it has signed a cooperation agreement with Central South University (CSU) to strengthen technical cooperation.

Under a donation agreement, Vale will donate $5.81 million to support CSU in establishing a new lab occupying a total area of about 3,000 square meters for low-carbon metallurgy and hydrogen.