Vale announced on Wednesday, 29th, the signing of seven agreements with different Chinese partners to reinforce its strategic agenda and strengthen its relationship with China. The announcement was made at the Brazil-China Business Seminar, held by Brazilian and Chinese authorities in Beijing, which was attended by Vale's Executive Vice President of Corporate and External Affairs, Alexandre Silva D'Ambrosio.

Alexandre D'Ambrosio, Executive Vice-President of Corporate and External Affairs

The seven agreements include a Project Investment Agreement for the Morowali project, in Indonesia; two agreements to support the company's decarbonization agenda in partnership with a Chinese client and a Chinese supplier, respectively; two comprehensive strategic cooperation MoUs signed with leading Chinese banks; and two more agreements to strengthen cooperation with Chinese universities.

These agreements come at a time when Vale is celebrating 50 years since its first iron ore shipment to China in 1973.

"As a partner of China for 50 years and a reliable supplier of raw materials for the Chinese steel industry, Vale has a long-term commitment to the Chinese market," says Alexandre Silva D'Ambrosio. "We will continue to offer high-quality iron ore products to the country to support the continued development of its economy and further deepen our strategic partnership in sustainable mining and low-carbon solutions."

Project Investment Agreement for Indonesia

Vale’s subsidiary in Indonesia (PT Vale Indonesia), together with Taiyuan Iron & Steel Co. Ltd. (Tisco) and Shangdong Xinhai Technology Co. Ltd. (Xinhai), have signed a Project Investment Agreement for a project to build a Rotary Kiln-Electric Furnace (RKEF) ferronickel processing plant with a minimum annual production of 73,000 metric tons of nickel and other supporting facilities in the district of Morowali, Indonesia. The project will utilize gas fired power to supply electricity and is anticipated to be a green and low carbon project. Tisco is a world renowned stainless steel producer in China's largest state-owned steel company Baowu.

The Morowali project, formerly known as Bahodopi, was approved by Vale’s Board in July 2022. It is expected to start-up in 2025.
 

Biochar development

Vale has announced the signing of a cooperation agreement with Baoshan Iron & Steel Co., a subsidiary of China Baowu, for the development and application of biochar in the steel industry. Produced from biomass, biochar is being considered as a substitute for coal in steelmaking process, with the potential to reduce carbon emissions in steel production.
Although there are still no cases of industrial application of biochar in steel mills in China, the sector considers biomass energy as a strategic technical route to low-carbon metallurgy.

For Vale, it is essential to be involved in the development of this technology, which will contribute to its goal of reducing scope 3 emissions by 15% by 2035.

Zero-emission motor grader

Vale has also announced an MoU with XCMG, China's largest group of companies in the construction machinery industry, to co-develop the world's first zero-emission motor grader for mining activities. The equipment, which is used to level mine accesses, will be tested at mines in the states of Minas Gerais and Pará, in Brazil. If it is approved after testing, Vale intends to acquire several models over the next few years. Today, the company has a fleet of 90 motor graders.

Vale is currently testing two electric off-highway trucks manufactured by XCMG, both with 72t capacity - one in Minas Gerais, Brazil, and the other in Indonesia.
The replacement of fuel-powered equipment with electric or low-emission models is fundamental for Vale to achieve its goal of reducing its scope 1 and 2 emissions by 33% by 2030.

Financial cooperation

Vale has signed multi-year Memorandum’s of Understanding (MoUs) with Industrial and Commercial Bank of China (ICBC) and with Bank of China (BOC) respectively. The MoUs are designed to support Vale’s business development and strengthen partnerships between Vale and the two leading Chinese banks.
According to the MoUs, the two Chinese banks intend to provide credit support to Vale through loan facilities, project finance, trade finance, asset finance, bank guarantees among others.

Vale and the two banks also intend to further deepen their collaboration in combating climate change, including green finance, renewable energy and other opportunities that arise from the energy transition.

Technical cooperation

Vale also announced that it has signed a cooperation agreement with Central South University (CSU) to strengthen their technical cooperation. This agreement follows the signing of the donation agreement between Vale and CSU that was announced in February this year. Under the donation agreement, Vale will donate $5.81 million to support CSU in establishing a new lab occupying a total area of about 3,000 square meters for low-carbon metallurgy and hydrogen.

Under the new cooperation agreement, Vale will strengthen the technical cooperation with CSU in various aspects such as research on low-carbon sintering and pelletizing, high efficiency ironmaking and H2 utilization.

Economic research cooperation

Vale and Tsinghua University have signed a four-year partnership agreement, under which Vale will continue to support the Academic Center for Chinese Economic Practice and Thinking (“ACCEPT”) at Tsinghua University in deepening the understanding of China’s economic practice and thinking and the discipline of Government and Market Economics. The partnership between Vale and ACCEPT began in April 2019.

Founded by Professor David Daokui Li, the renowned Chinese economist, in April 2018, ACCEPT focuses on the research on government and market economics, promotes the economic research with Chinese characteristics.