OREANDA-NEWS. The installation environmental license (LI) to the iron ore project Carajas S11D (S11D), the highest grade and lowest cost world-class project in the industry, was obtained today, July 3rd. With the issuance of the LI, Vale’s Board of Directors approved the complete S11D program, comprised of investments in the mine, processing plant, railway capacity and port.

The LI was issued by IBAMA (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renovaveis) and is part of the project’s second phase of licensing, which authorizes the plant construction. S11D is the largest project in Vale’s history and also in the iron ore industry, being a major lever for value creation, production capacity growth and for maintaining Vale’s undisputed leadership in the global market in terms of volume, cost and quality.

S11D is the largest project in Vale’s history and also in the iron ore industry, being a major lever for value creation, production capacity growth and for maintaining Vale’s undisputed leadership in the global market in terms of volume, cost and quality.

Consistent with the objective with long-term sustainable value creation, we developed technological solutions focused on environmental protection, with more efficient use of natural resources and reduction of pollutants emission. Get to know more

A high value-adding project

The total capex for S11D is USD 19.671 billion, estimated at a 2.00 BRL/USD exchange rate, encompassing: the development of mine and processing plant (USD 8.089 billion) and logistics (USD 11.582 billion).

The project has a nominal capacity of 90 million metric tons per year (Mtpy) of iron ore with proven and proved reserves of 4.240 billion metric tons with an average ferrous content of 66.7%. S11D will increase our logistics capacity to 230 Mtpy, and involves the construction of a rail spur, new railway sections with dual tracks, rail terminals and onshore and off-shore investments.

The increase in production of high quality iron ore is in line with Vale’s growth and value creation strategy based on a world class asset platform, active portfolio management and discipline in capital allocation.

Status of execution

S11D is expected to start-up in 2H16 and to deliver full capacity production in the 2018 calendar year.

The engineering is almost fully completed and the equipment and services packages for the whole program (S11D and CLN S11D) are 23% contracted and 45% to be hired with firm proposals. As of the end of May 2013, S11D was at 44% of physical progress in the mine and processing plant as a result of our strategy to build modules outside the construction site. The CLN S11D was at 8% physical progress.

Until May 2013, we already executed USD 2.736 billion. Capital expenditures will be executed until the end of the ramp-up in 2018, although they are expected to be more concentrated during 2014-2016.