Vale reaches $1.8 billion railway concessions deal
The company reached an agreement with local authorities to pay up to some 11 billion reais to renegotiate two railway concession contracts.
Vale has signed an agreement with heavy industrial parts maker Wabtec Corporation for a project that aims to decarbonize the miner’s Carajas iron ore railway (EFC), the Brazilian miner said on Thursday.
The plan includes the development of the first hybrid railway in the country, with battery-powered and diesel electric locomotives, the executives of both companies told Reuters.
Wabtec will supply Vale with three battery-powered locomotives, which will be manufactured at its unit in Minas Gerais state by 2026.
The agreement also includes studies for using ammonium as an alternative to diesel for other locomotives.
The deal comes as Vale makes a billion-dollar investment to reduce their direct and indirect carbon emissions by 33% until 2030.
The railway connects the Carajas mining complex in Brazil’s Amazonian state of Para with the Port of Ponta da Madeira near Sao Luis, on Brazil’s Northeast coast.
It moves a third of Vale’s iron ore output, of about 240 million metric tons a year.
The deal “gives us a very good perspective for our 2050 carbon neutrality goal”, Vale’s head of energy Ludmila Nascimento said, noting that its railway network currently represents 10% of its carbon emissions.
(By Marta Nogueira and Carolina Pulice; Editing by Jason Neely)
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