Vale S.A., the world’s largest producer of iron ore and pellets, has invested $305 million to produce biodiesel--with palm oil as a raw material--to supply its operations in Northern Brazil from 2014 onwards.

Vale has partnered with Biopalma da Amazônia S.A. for the $500 million biodiesel project. Vale holds a 41% stake in the consortium, which aims to produce 500,000 tons of palm oil annually. The oil produced will be used to power Vale’s biodiesel plant in Brazil, which has an estimated annual production capacity of 160,000 tons of biodiesel. Both companies expect oil production to begin in 2011 and biodiesel production to begin in 2014.

The plant will produce biodiesel using the B20 mix, which is made up of 20% of biodiesel and 80% of ordinary diesel, to power Vale’s entire fleet of 216 locomotives in the company’s North System rail network and bulk equipment in the Carajás mines. The biodiesel will reduce carbon dioxide (CO2) emissions by 12 million tons over the course of the project, which is equivalent to removing more than 200,000 cars from the road.

The project covers 130,000 hectares in the northern-central region of Pará, Brazil, with 60,000 hectares to be used for palm tree plantations and the remaining 70,000 hectares to be allotted for native habitat. The project will also create 6,000 jobs, benefiting 2,000 families of small rural producers.

The biodiesel plant is part of the company’s strategy to diversify its energy matrix through exploring the use of other potential energy sources such as thermal coal, renewable fuel, and natural gas.

Vale S.A. is the second largest diversified metals and mining company in the world, with approximately $70 billion in market capitalization. The company is also the largest producer of iron ore and pellets, and the second largest producer of nickel in the world. Vale also produces copper, manganese, and other key raw materials for the steel industry. Its headquarters is located in Rio de Janeiro, Brazil.

-  Natassia Y. Laforteza

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Source:

¹ http://www.vale.com/vale_us/cgi/cgilua.exe/sys/start.htm?infoid=2629&sid=610
² http://www.vale.com/vale_us/cgi/cgilua.exe/sys/start.htm?sid=620&infoid=2633