Brazilian mining giant Vale SA is developing a "green" blend of iron ore that will reduce carbon emissions from blast furnaces, in a bid to capitalize on Chinese efforts to curb pollution from its massive steel industry, an executive said Thursday.

After China's government unveiled a set of reforms last November that included a newfound environmental focus, Vale said premiums for the high-quality iron ore it produces from some mines in Brazil "spiked at the end of 2013 and will probably remain elevated during 2014."

Analysts say quality is the biggest advantage that Vale, the world's top producer of iron ore, has next to rival companies in Australia that are closer to the Chinese market. China produces around half the world's steel and is by far the largest importer of iron ore.

Jose Carlos Martins, executive director of Vale's ferrous division, said the company will soon begin building inventories at its $1.37 billion Teluk Rubiah distribution center in Malaysia, expected to begin operating in July. Once stocks are in place, the company will start delivering its "green" iron ore.

"We are defining a kind of blend that can reduce carbon emission in blast furnaces in China," Mr. Martins said. "We don't know how the market will see prices for this ore but we really believe that the acceptance will be very good.

Source: Wall Street Journal