Monday, June 25, 2012

[biofuelwatch] Massive palm oil biodiesel production planned in Amazon region

<<The Brazilan Vale mining company reported on here was voted the world's worst corporation earlier this year at 'Public Eye Awards' in Davos, Switzerland

now they are going green by using palm oil biodiesel...>>

By Samantha Pearson (Financial Times) in Moju, Brazil 24 June 2012

Vale is preparing to build the world's largest single processing plant for palm oil by 2015 in an effort to cut its vast fuel costs and help develop the struggling Amazon region, the Brazilian mining company told the Financial Times.

Under the project, which will cost more than $500m, Vale has acquired an area of cleared land in the Amazon rainforest bigger than London where it will grow palm oil and then convert it into biodiesel to run the company's machinery, ships, trains and trucks.

After opening its first palm oil factory this month in Brazil's Amazonian state of Pará, Vale will initially sell its produce to food producers in the market until it completes the facility capable of converting that oil into fuel in 2015, said Eduardo Ieda, head of the miner's biodiesel company Biopalma.

The project comes at a sensitive time for Vale as it faces pressure to focus on its core mining business. Concerns that the government is pressuring the company to further its own development agenda at the expense of investors have helped knock Vale's shares down by about 20 per cent since the beginning of last year.

As well as reducing the carbon emissions of Vale, which consumes about one in every 33 litres of diesel in Brazil, the project will also help boost the region's economy, creating 6,000 jobs in Pará and using local farmers to produce about a quarter of the required palm oil fruits. "We're helping these families to make the transition from poverty to the middle classes," Mr Ieda said, adding that participating farmers would be eligible for loans at Banco da Amazônia and soon Banco do Brasil.

However, he said the project was also in Vale's own financial interests. After probably breaking even next year, Biopalma's plant will allow the miner to reduce its huge energy bill by producing biodiesel at a cost that is about 30 per cent cheaper than current market prices, he said.

Energy accounted for 13.4 per cent of the company's total cost of goods sold last year, according to a recent filing to the US Securities and Exchange Commission.

On Friday last week, Vale also announced plans to invest R$650m (US$315m) jointly with Australia's Pacific Hydro to build two wind farms in Brazil's northeast to help meet the miner's electricity needs.

The palm oil plant will also prepare the company for an expected change to Brazilian legislation that will require diesel to be composed of 10 per cent biodiesel by 2020, up from 5 per cent currently. By 2017, Vale said it plans to already operate on "B20", composed of 20 per cent biodiesel.

Mr Ieda said Vale's palm oil plant would be capable of processing 560 tonnes of "fresh fruit bunches" per hour – making it the largest single processor in the world – within three years.

Mr Ieda said he expected the project, which is spread out over a total area of 175,000 hectares in Pará, to be producing about 600,000 tonnes of palm oil per year by 2019.


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Biofuels are a wide range of fuels which are in some way derived from biomass.

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