AD Ports and Brazil's Vale to develop mega hub for steel industry in Abu Dhabi

The hub's industrial complexes will produce low-carbon products

An aerial shot of Khalifa Port. Photo: AD Ports Group

AD Ports Group, the operator of industrial cities and free zones, has signed a preliminary agreement with Brazil's mining industry major Vale, which produces iron ore and nickel, to develop a mega hub in Abu Dhabi for industrial complexes that produce low-carbon products for the steel industry.

The products from the hub will reach both local and seaborne markets, AD Ports said on Wednesday.

Under the agreement, land and related services will be allocated from Kezad ­– a subsidiary of AD Ports Group – for the mega hub.

It will also involve the development and management of an advanced handling facility at Khalifa Port, which will be capable of accommodating Valemax vessels with a handling capacity of up to 50 million tonnes of cargo every year.

“The UAE is committed to not only finding ways to reduce carbon emissions, but also to supporting all efforts aimed at positively affecting the global environment,” said Capt Mohamed Al Shamisi, managing director and group chief executive of AD Ports.

The agreement with Vale represents AD Ports’ commitment to the UAE’s sustainability objectives and signifies “a key step in our contribution towards meeting the UAE Net Zero 2050 strategic initiative”, he added.

As part of its net-zero ambitions, the UAE plans to invest Dh600 billion ($163 billion) in clean and renewable energy sources over the next three decades. The country is gearing up to host the UN climate conference Cop28 in November, when up 70,000 delegates from all over the world will gather to tackle climate change.

Established in 2006, AD Ports Group, which owns and operates 10 ports in the UAE, has been expanding its operations globally.

As part of its agreement with Vale, AD Ports will develop and manage conveyor infrastructure to transport iron ore and finished products to and from Khalifa Port and Kezad, it said.

The Abu Dhabi-listed company will also explore commercial collaboration with Vale on the marketing and sale of various bi-products of the manufacturing process in the UAE and the wider region.

The agreement, which is aimed at using the collective strengths of the two companies to enhance the overall efficiency of the global supply chain, includes a maritime collaboration to explore opportunities related to management and operation of very large ore carriers (VLOCs) as well as other possible avenues of partnership.

“We are encouraged by this opportunity to build a mega hub in the UAE, a country which is strategically positioned to positively influence our drive to significantly reduce CO2 emissions around the globe,” said Eduardo Bartolomeo, chief executive of Vale.

The initiative contributes to Vale’s commitment to reduce 15 per cent of net scope 3 emissions by 2035. Additionally, Vale is aiming to reduce its absolute scope 1 and 2 emissions by 33 per cent by 2030 and achieve net zero by 2050, in line with the Paris Agreement, leading the evolution process towards sustainable mining, the statement said.

Scope 1 and 2 are those emissions that are owned or controlled by a company, while scope 3 emissions are a consequence of the activities of the company, but occur from sources not owned or controlled by it.