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Vale signs iron pellets deal with Saudi Arabia

Rio de Janeiro, October 7, 2009

Brazilian miner Vale, the world's largest iron ore producer, said it closed a 10-year contract to supply 3.3 million tonnes per year of iron pellets to Saudi Arabia's Saudi Basic Industries Corp.

'It is an important region to us, a market with long-term growth that is very attractive,' chief financial officer Fabio Barbosa told reporters.

Vale said in a statement the contract for direct reduction pellets was signed by Abdulaziz Sulaiman Al-Humaid, the Saudi firm's vice president for metals, and Jose Carlos Martins, Vale's executive director of ferrous minerals.

The company produced 32 million tonnes of pellets last year but slashed pellet output after the financial crisis in the face of tumbling demand. As of July it had only partially restarted its idled pellets operations.

In September it opened a $1.3 billion pellets plant with a capacity to produce 7 million tonnes per year.
   
Vale in July said pellet production in the second semester of 2009 was down around 63 percent compared to the same period a year earlier. Pellet sales accounted for about 5 percent of Vale's revenues in the first quarter of 2009. - Reuters




Tags: Brazil | iron | Vale |

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