MUSCAT: Oman Oil Company, the state investment arm of the non-OPEC producer, signed an agreement to buy 30 percent of a subsidiary of Brazil’s Vale in the Gulf Arab state, an Oman Oil Company statement said on Sunday.

"Oman Oil Company signed an agreement to buy 30 percent stake in Vale Oman Pelletizing Company LLC (VOPC)," the statement said. The Vale plant, based in Sohar, has an annual production capacity of 9 million tons of iron ore pellets.

It will be fully commissioned by mid 2011.

Oman is banking on foreign companies to set up projects in the country to diversify its economy, which depends heavily on oil exports.

On Saturday, Oman said France’s GDF Suez is building two power projects worth $1.82 billion. GDF Suez will own and operate the power plants in a 15-year agreement signed with the government.