Brazil mining mammoth Vale SA (VALE) has officially opened an iron-ore pellet plant, capable of producing seven million metric tons of pellets a year, in Minas Gerais State, southeastern Brazil, the company said in a statement Tuesday.

According to Vale, the new 2.3 billion Brazilian real ($1.27 billion) facility is one of the world's largest.

The plant, which will process up to 10 million tons of iron ore a year, is located at Itabaritos, between mining complexes at Nova Lima and Pico.

Nearby mines have 600 million tons of iron-ore reserves, sufficient for at least 25 years, Vale said.

The company's nominal pellet-production capacity now stands at 48 million tons a year.

Vale also has a stake in pellet company Samarco Mineracao, which produces 22 million tons a year.

Samarco is jointly-owned by Vale and its global competitor, Australia's BHP Billiton Ltd. (BHP).

-By John Kolodziejski, Dow Jones Newswires; 55-21-2586-6086; John.Kolodziejski@dowjones.com