Vale plans to build more iron ore pellet plants on mainland

Brazilian mining giant Vale, the world's largest iron ore exporter, is in talks with mainland steelmakers to build more pellet plants in the world's largest steel-making country to tap growing demand.

'We're optimistic about China's demand for iron ore as the economy is still undergoing urbanisation and industrialisation,' said Michael Zhu, the president of Vale China.

Mr Zhu said yesterday the company was in talks with its mainland customers on building pellet plants on the mainland and about joint investments in ships to transport ore to China, the world's largest importer.

He said Vale planned to set up several iron ore pellet plants on the mainland, in addition to its plant in Zhuhai, Guangdong province.

The Zhuhai plant, in which Vale has a 25 per cent stake, started production in January with an annual capacity of 1.2 million tonnes and is considering whether to add a further 2 million tonnes of capacity.

Pioneer Iron & Steel Group, the steel empire of 'Iron Princess' Diana Chen Ningning, owns 35 per cent of the Zhuhai plant, while her 66 per cent-controlled Zhuhai Yueyufeng steel mill has an additional 40 per cent stake.

Mr Zhu said the plants Vale planned to build would have annual capacity of 2.5 million tonnes to 5 million tonnes. He declined to disclose the possible partners and investment size.