Oman Oil Company, the state investment arm of the non-Opec producer, has signed an agreement to buy 30 percent of a subsidiary of Brazil's Vale in the sultanate, a statement said.

"Oman Oil Company signed an agreement to buy 30 percent stake in Vale Oman Pelletizing Company (VOPC)," the statement said.

The Vale plant, based in Sohar, has an annual production capacity of 9 million tonnes of iron ore pellets. It will be fully commissioned by mid-2011.

Oman is banking on foreign companies to set up projects in the country to diversify its economy, which depends heavily on oil exports.

On Saturday, Oman said France's GDF Suez is building two power projects worth $1.82 billion. GDF Suez will own and operate the power plants in a 15-year agreement signed with the government. - Reuters