Emirates Steel (ESI) has signed a four-year iron ore pellet procurement contract with Vale. The deal will see the steelmaker’s Abu Dhabi-based direct reduced iron plant supplied with feedstock through 2021.
“The agreement with Vale comes in line with Emirates Steel strategy, which aims to secure flexible source of iron ore at competitive, stable and long-term prices,” ESI chief executive Saeed Al Romaithi says in a note sent to Kallanish. ESI’s pellet requirement is 6 million tonnes/year to feed DRI production of 4m t/y.
“This new partnership plays a vital role to further strengthening the growth of our steel production in Abu Dhabi, as well as realising our vision of being a world class steel manufacturer providing the highest quality products, services and solutions to our customers and maximising returns to our shareholders,” Al Romaithi continues.
Vale executive director Peter Poppinga adds: “The long-term agreement resembles the two companies’ visions combined in long-term partnership. It also shows Vale’s strong willingness to support the Middle East steelmaking industry through leveraging on competitiveness, productivity and performance with high quality products.”
In 2016 ESI signed a letter of intent to procure 900,000 t/y of pellet from Australia’s Hawsons Iron Project, majority-owned by Carpentaria Exploration Limited (see Kallanish passim). Besides ESI, Vale’s other Middle Eastern customers include Sabic, Qatar Steel and Watani Steel.