Vale project may cost up to RM14b

By TEE LIN SAY 

The Star

Friday January 21, 2011

IPOH: Brazilian mining giant Vale International SA's construction costs in its iron-ore transshipment project will be between RM9bil and RM14bil over a five-year period, and the project will likely start in July or August this year, said Perak Mentri Besar Datuk Seri Dr Zambry Abdul Kadir.

Vale has received the necessary planning and statutory approvals. It is now in the midst of drawing up the engineering plan.

While the Perak government has no equity participation in the project, it will participate in the port and logistics operations. There will also be co-sharing with local companies on the downstream activities. The multiplier effect of the downstream activities is expected to triple Vale's initial investment.

“Vale has agreed to bring more economic growth along that area. Local companies will be subcontracted to participate in the trickle-down activities. They will include Malaysian companies involved in iron ore, steel, fabrication, shipbuilding, canning and tin,” Zambry said.

Datuk Seri Dr Zambry Abdul Kadir … ‘Local companies will be subcontracted to participate in the trickle-down activities.’

Under the project, Vale will develop an iron-ore complex, including its own jetty in Teluk Rubiah, Lumut. Zambry said this would serve as an impetus for the development of iron ore and steel-related industries.

“This will be Vale's largest factory outside Brazil. All the necessary acquisitions have been made; it is just a matter of coming out to do it now,” he said.

He said the shipbuilding activities would take place along the beachfront from Lumut to Bagan Datok.