MUSCAT: A Final Investment Decision (FID) for a multi-billion-dollar low-carbon steel complex planned by Brazilian mining conglomerate Vale at the Special Economic Zone at Duqm (SEZAD) is expected this year, with construction scheduled to begin next year.
The project, commonly referred to as a “Mega Hub”, focuses on producing a greener version of Vale’s iron ore concentrates and hot briquetted iron (HBI), which will serve as feedstock for steel mills across the Middle East.
According to Nasser al Azri, CEO of Vale Oman Pelletising Company, the Mega Hub initiative has already progressed in its early development stages and has attracted significant interest from international investors seeking downstream opportunities.
“We’re advancing our Mega Hubs strategy, where Vale not only invests directly but also facilitates downstream investments from our clients. Several MoUs are already in place, clients have been in Oman meeting with the government and we expect to see agreements signed towards the end of this year”, Al Azri said.
“In Al Duqm, we’ve already signed our land agreement — as have many of our clients — which demonstrates real intent. Together with our partners, we expect to invest approximately $5 billion in the first phase, scheduled to reach FID in 2026, with construction targeted for completion by 2029”, he added in a recent interview with The Energy Year, a UK-based business news portal.
First unveiled in November 2022, the Oman investment is one of three Mega Hubs planned by Vale in the Middle East. Under a land lease agreement with the Port of Duqm, an area of 6.78 sq km has been allocated for the project.
Vale intends to develop and operate the iron ore concentration and briquetting facilities at the Mega Hubs to ensure a steady supply of high-quality agglomerated products. Local partners will lead the development of supporting logistics infrastructure, while investors and customers will build and operate the direct reduction plants and purchase the resulting HBI for domestic and export markets. The Mega Hubs aim to serve global markets and advance the decarbonisation of the steel industry.
The Mega Hub will produce HBI and steel products with a significant reduction in CO₂ emissions. Using natural gas, HBI production emits roughly 60 per cent less CO₂ than conventional pig iron production via the Blast Furnace–Basic Oxygen Furnace (BF-BOF) route. In the future, switching to hydrogen and renewable energy could potentially eliminate CO₂ emissions entirely.
At SOHAR Port and Freezone, where Vale’s Oman operations are based, the company is progressing on the Sultanate of Oman’s first iron ore concentration plant, a $600 million joint venture with ACPG Jinnan Steel, a Chinese-based low-carbon steelmaker.
“The plant will enhance operational flexibility, reduce reliance on single ore sources, introduce Chinese technology, create jobs, boost Oman’s in-country value — to which Vale already contributes around $1.9 billion — and position the company for sustained regional leadership”, Al Azri added.
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