Baoshan Iron and Steel Company (Baosteel) is making big moves in the Middle East as it announced a significant increase in its investment in a steel plate joint venture with Saudi partners, Aramco and the Public Investment Fund (PIF).
The Chinese steelmaker is set to inject $1 billion for a 50 per cent stake in the steel venture, while Aramco and PIF will each invest $500 million for a 25 per cent stake. This investment increase comes as part of an agreement signed in May 2023 to build a steel plate manufacturing complex in Saudi Arabia’s Ras al-Khair Industrial City.
The joint venture’s manufacturing facility is planned to have an annual production capacity of 2.5 million tonnes of direct reduced iron, 1.7 million tonnes of steel, and 1.5 million tonnes of steel plates. Notably, the facility will utilize environmentally friendly technology that aims to reduce carbon dioxide emissions by up to 60 per cent compared to traditional steelmaking processes.
The products from this venture will primarily cater to industries such as oil and gas, shipbuilding, maritime engineering, and construction in the Middle East and North Africa, with Saudi Arabia being the main target market.
The collaboration between Baosteel, Aramco, and PIF is seen as a strategic move in line with China’s Belt and Road initiative and Saudi Arabia’s Vision 2030 economic reform plan. This partnership highlights the increasing cooperation between the two countries in the realm of infrastructure development and economic growth.
