UAE-Oman rail venture signs agreement with Vale to transport iron ore products

Partnership paves way for Brazil company to connect its Sohar Port industrial zone to planned UAE complex

Ahmed Al Hashemi, chief executive of Oman and Etihad Rail Company, and Rogerio Nogueira, director of business development at Vale, sign the agreement, witnessed by Suhail Al Mazrouei, Minister of Energy and Infrastructure and chairman of Oman and Etihad Rail Company, and Elaina Zugaib, Brazi's ambassador to the UAE. Photo: Etihad RailShow less

Oman and Etihad Rail Company, the developer and operator of the train network linking the two GCC countries, has signed a preliminary agreement with Brazil's mining industry major Vale to transport iron ore products.

The sides will explore transporting iron ore and its derivatives by train between the Emirates and the sultanate, Etihad Rail said on Saturday.

Etihad Rail and Oman Rail formed the Oman and Etihad Rail Company to build the $3 billion railway project.

This will connect Vale’s industrial zone in Sohar Port and Freezone to its planned major complex in the UAE, it said.

The agreement was signed by Ahmed Al Hashemi, chief executive of Oman and Etihad Rail Company, and Rogerio Nogueira, director of business development at Vale.

It was witnessed by Suhail Al Mazrouei, Minister of Energy and Infrastructure and chairman of Oman and Etihad Rail Company, and Elaina Zugaib, Brazi's ambassador to the UAE.

“The agreement is in line with our desire to continue to work on and establish strategic partnerships with major companies in the UAE and Oman, supporting economic growth, continued development and investment in both countries,” Mr Al Mazrouei said.

The transport link between the UAE and Oman, which was first announced in September, is aimed at bolstering trade and tourism between the two countries and the region.

The rail line will serve both passenger and freight trains. Passenger services will operate at up to 200kph, with freight trains reaching 120kph.

It will reduce journey times between Abu Dhabi and Sohar, to the north of Muscat, to 100 minutes, and trips from Sohar to Al Ain to 47 minutes. Plans include connecting the UAE's existing freight services line to Sohar, the sultanate's deep-sea port.

The railway is also expected to boost industrial sectors in the UAE, which has launched several programmes to boost its contribution to the economy.

The agreement “highlights the interest of potential users in utilising the UAE-Oman railway network and benefitting from its fast, sustainable, reliable and cost-effective services”, Mr Al Hashemi said.

It will also support Rio de Janeiro-based Vale's plans to develop industrial complexes in the UAE and Oman to produce low-carbon products for the steelmaking industry, Mr Nogueira said.

The partnership “reinforces regional logistics progress, which enables various economic and trade activities, and provides several benefits, including creating new job opportunities and providing high-quality transport solutions”, he said.

Etihad Rail is set to boost growth in regional trade and promote economic integration while attracting more investment into key industries, Emirates NBD previously said.

The D50 billion ($14 billion) unified rail network, which was completed in March, will help to maintain the country's attractiveness as a destination for investment and business, according to a study released by the research arm of Dubai's largest bank by assets.