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Vale and Biopalma Launch $500M Palm Oil Biodiesel Project in Brazil to Fuel Vale’s Locomotives and Mining Equipment

Vale S.A., a Brazil-based global mining company, and Biopalma da Amazônia S.A., a company with expertise in growing dendê palm to produce oil, have formed a consortium to produce biodiesel from dendê palm oil from 2014 onwards.

The consortium will be the biggest producer of palm oil in the Americas, and will invest a total of around US$500 million in the project, US$305 million provided by Vale.

Vale will use a share of the consortium’s dendê oil output to make biodiesel to power the entire fleet of 216 locomotives of the company’s North System rail network, as well as heavy-duty machines and equipment in the Carajás mines.

It is estimated that annual output of dendê oil will be 500,000 tons, part of which will be transformed into 160,000 tons of biodiesel. This will cut Vale’s carbon dioxide emissions by 12 million tons over the course of the project.

In addition, the consortium, in which Vale has a 41% stake, will generate around 6,000 direct jobs and benefit 2,000 families of small rural producers.

The project covers approximately 130,000 hectares in the northern-central region of Pará State, in an area with one of the lowest Human Development Index scores in the country. Of the total area, 60,000 hectares will be used for dendê palm tree plantations. The remaining 70,000 hectares will be allotted for native habitat, to be restored and protected by the consortium.

Eight hundred thousand trees have already been planted on 5,000 hectares, and a further 2.3 million palm tree saplings are being grown to plant on 12,500 hectares in early 2010.

Harvest of the first crop and the beginning of oil production will be in 2011. In 2014, biodiesel production begins. Vale intends to become self-sufficient in production of the fuel, and will use B20 (blend of 20% biodiesel and 80% regular diesel) well in advance of the schedule established in legislation.

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