Oman and Etihad Rail Company has signed a memorandum of understanding (MoU) with the Brazilian mining giant Vale to explore the possibility of transporting iron ore between the two neighbouring countries.
The MoU is aimed at exploring the rail network usage for transporting iron ore and its derivatives between Oman and the UAE, connecting Vale’s industrial complex in Sohar Port to its planned mega-industrial complex in the UAE.
The agreement underscores the logistical importance of the rail project to major international players in various sectors, as they stand to benefit significantly from the competitive advantages and economic incentives of the project.
The MoU was signed by Ahmed al Musawa al Hashemi, CEO of Oman and Etihad Rail Company, and Rogério Nogueira , director of business development at Vale. As per the MoU both parties will work together to develop integrated logistics solutions that connect Vale’s industrial complex in Sohar Port and Freezone and transport the company’s iron ore products and derivatives between the company’s Sohar hub and various factories and distribution centers.
Commenting on the development, Suhail Mohammed al Mazrouei, UAE’s Minister of Energy and Infrastructure and chairman of Oman and Etihad Rail Company, said, “The agreement is in line with our desire to continue to work on and establish strategic partnerships with major companies in the UAE and Oman, supporting economic growth, continued development and investment in both countries.”
He said, “We are proud to partner with a leading international company like Vale, which has extensive global experience in the production of iron and utilises rail as a primary means of transportation for its logistical operations.
Agreeing with him, Vale’s Nogueira said that the agreement supports Vale’s plans to develop industrial complexes in the UAE and Oman to produce low-carbon products for the steelmaking industry. He added that Vale’s partnership with Oman and Etihad Rail Company reinforces the regional logistics progress, which enables various economic and trade activities, and provides several benefits, including creating new job opportunities and providing high-quality transport solutions.
Oman and Etihad Rail Company was established in September 2022, as a joint venture equally owned by Abu Dhabi’s Etihad Rail and the sultanate’s Oman Rail Company, with the goal of designing, building, and operating a railway network that links Oman’s Sohar Port to the UAE National Rail Network, with a total project investment of $3bn.