Biopalma will commence production in 2011 and anticipates 500,000 tons of palm oil per year in 2019, when the trees reach maturity, the company said.
Vale will use most of the oil to make B20 – a blend of 20% biodiesel and 80% regular diesel – to power locomotives, heavy-duty machinery and equipment at the Brazilian operations.
The company claims that it wants to build an energy supply chain using more renewable sources to be a global sustainability agent.
The company’s strategy led Vale to associate with Biopalma in April 2009 to produce palm oil.
To expand the business, Vale has negotiated the dissolution of the consortium and the acquisition of 70% of Biopalma.
Biopalma has six oil palm plantations covering 18,400 hectares (45,467 acres) in Para, and Vale expects this to expand to 60,000 hectares in 2013.
