The Ministry of Commerce, Industry and Investment Promotion (MoCIIP) signed a memorandum of cooperation with Vale SA, in partnership with the Public Authority for Special Economic Zones and Free Zones (OPAZ) and Oman's National Program for Investment & Export Development (Nazdaher).
In the memorandum, the parties agreed to conduct a feasibility study to explore the prospects of developing an integrated industrial complex (mega hub) in Oman that will contribute to achieving carbon neutrality by 2050, in line with international priorities set forth in the Paris Agreement.
The memorandum was signed by Qais bin Mohammed al Yousef, Minister of Commerce, Industry and Investment Promotion, and Rogerio Nogueira, the Global Marketing Director at Vale, during a signing ceremony attended by senior government officials, including Dr Saleh Said Salem Al Masan, MoCIIP Under-Secretary for Commerce and Industry, and Eng Ahmed Hassan Al Dheeb, Vice Chairman of OPAZ.
With several long-term impacts, this cooperation aims to attract foreign direct investment to Oman, unlocking new prospects in manufacturing and creating opportunities for support industries revolving around the Mega Hub, while contributing to the national economy and environmental sustainability. Moreover, the memorandum is closely aligned with the national plans and target of achieving carbon neutrality by 2050, as approved by His Majesty Sultan Haitham bin Tarik.
MoCIIP’s growth strategy seeks to harmoniously integrate the industrial and energy sectors, while keeping pace with major energy developments in Oman, primarily in green hydrogen. Plans made under this strategy focus on driving the manufacturing industry towards using renewable energy and reducing emissions in line with the global carbon neutrality agendas; the emphasis will be on industries such as cement, steel, methanol, urea, aluminum, petrochemicals and refineries, to name a few.
“We believe that this important partnership with the Ministry of Commerce, Industry and Investment Promotion will be key to support the decarbonisation of the steel industry in Oman,” said Rogerio Nogueira, Vale Global Marketing Director.
“Vale has always been a keen contributor to Oman’s economic and environmental agenda. As a low-carbon solutions company, we believe that the green briquette used in direct reduction will revolutionize steel production. This Agreement is just the first step in realizing the incredible potential in direct reduction as the demand for HBI is expected to grow at a rapid pace over the next 20 years.” The initiative is a key enabler to the successful decarbonisation of the steel industry, as it carves a new path for the provision of high-quality materials with a reduced carbon footprint at a competitive cost to the industry. Additionally, it contributes to Vale’s commitment to reduce 15% of net Scope 3 emissions by 2035. The company seeks to reduce its absolute Scope 1 and 2 emissions by 33% by 2030 and achieve net zero by 2050, in line with national and global priorities.
MoCIIP and Vale will cooperate in developing a Mega Hub to produce direct reduction metals, build concentration facilities and integrate processes. The production of HBI using natural gas emits around 60% less CO2 than the iron production; therefore, by achieving integration and using hydrogen, carbon emissions could be eliminated.
With roles and opportunities being explored by both parties, Vale is expected to invest, build, and operate a concentration and briquetting plant in Oman, ensuring a reliable supply of iron ore. Meanwhile, MOCIIP, in cooperation with Vale, is expected to support the Mega Hub development by building the necessary logistics facilities and invest in building and operating the direct reduction plants. In the future, new parties may be invited to join the Mega Hub as partners, and the Hub is expected to supply markets across the globe while promoting decarbonisation in the steel industry.