The Sohar Industrial Port Company SAOC (SIPC) has signed a Sub-Usufruct Agreement (which is equivalent to a land lease agreement) with the Companhia Vale do Rio Doce (VALE), the global giant in the mining industry.

The agreement, subject to VALE’s board approval, facilitates approximately 1 billion US$ worth of investments in a production facility and distribution centre in the Port of Sohar and was signed in Rotterdam by HE Maqbool bin Ali Sultan, Minister of Commerce and Industry and Chairman of the Board of SIPC and Mr. Eduardo Bartolomeo VALE’s Executive Director of Logistics and Mr. Sergio Leite, Oman Country Manager for VALE.

VALE is planning to construct an iron ore pellet plant and iron ore distribution centre facility in the Port of Sohar. The entire project still is subject to VALE’s Board approval. The production at the Port of Sohar of iron ore pellets is planned to commence in the second half of 2010. This will be the first whole-owned green field investment in the ferrous sector outside Brazil for VALE.

In addition there will be joint investment in related marine infrastructure by the Government of the Sultanate of Oman and the Port of Rotterdam. The strategic location outside the Strait of Hormuz and near emerging markets combined with the fact that Oman is a country with a good environment to develop business are the main reasons for VALE to choose the Port of Sohar for its expansion in the Middle East.

The Port of Sohar also has access to deep water and the investment of VALE can further boost the development of the bulk and steel cluster in the port, next to the petrochemical and logistical cluster.

The distribution centre within the Port of Sohar will allow VALE an easier path for distribution to the Middle East region.

The management of the Port of Sohar, SIPC, is planning to start the construction of a deep water jetty this year to accommodate the very large vessels with drafts of up to 23 metres, bringing the iron ore from Brazil.

The Port of Sohar is also aiming to establish a more extensive handling of bulk cargo facilities and the signing today with VALE gives the Port of Sohar the opportunity to enter the next phase in its expansion.