Brazil's Vale opens 7 mln tonne/yr pellets plant

RIO DE JANEIRO, Sept 22 (Reuters) - Brazil's Vale (VALE.N) (VALE5.SA), the world's largest iron miner, said Tuesday it opened a $1.3 billion pellets plant with a capacity to produce 7 million tonnes per year.

In the wake of the financial crisis, Vale (VALE5.SA) (VALE.N) slashed pellet output in the face of tumbling demand and as of July had only partially restarted its idled pellets operations.

The Itabiritos project is located between two existing iron projects and is associated with an iron mine believed to hold 600 million tonnes of ore -- enough to keep the project in operation for 25 years, the company said.

The project will process 10 million tonnes of iron ore per year.

Vale in July said pellet production in the second semester of 2009 was down around 63 percent below compared to the same period a year earlier. A company official in the press department said he could not provide more recent figures.

Pellet sales accounted for about 5 percent of Vale's revenues in 2008. (Reporting by Brian Ellsworth; Editing by John Picinich)