MUSCAT: Vale S.A. announced on Saturday that it signed a new 10-year contract with Saudi Basic Industries Corporation (SABIC) to supply Direct Reduction Pellets (DRPs) to its plant in Saudi Arabia. Under this new long-term deal, Vale will supply approximately 3.3 million tons of DRPs.

Abdulaziz Sulaiman Al-Humaid, SABIC Vice President for metals and Hadeed chairman, and José Carlos Martins, Vale’s executive director of Ferrous Minerals, signed the contract, which further strengthens their relationship.

It also highlights Vale’s “unique capability as a long-term reliable supplier of high quality iron ore and pellets,” given its large-scale operations and excellence.

Vale is the world’s second largest diversified mining company in market capitalization. Present in more than 30 countries, Vale is the world’s largest producer of iron ore and pellets, key raw materials for the steel industry, and one of the largest producers of nickel, which is used to produce stainless steel, batteries, special alloys, chemicals and other products. The company also produces copper, manganese, ferroalloys, bauxite, alumina, aluminum and coal, among other raw materials important to the global industrial sector and present in people’s daily lives.

Vale set up its Middle East office in Muscat in December 2007 with a view to expanding its presence in this key market. The company recently broke ground on a new industrial complex in Sohar, which will comprise a pelletizing plant, bulk terminal and distribution center with a capacity of 40 million metric tons. The plant will have an annual nominal production capacity of 9 million metric tons of direct reduction pellets. Operations are scheduled to begin in the second half of 2010, with the estimated total cost of the project at approximately $1.4 billion.