Home Industry Manufacturing Aramco and PIF set up JV to build steel plant with China’s Baosteel The steel manufacturing base has a designed annual capacity of 2.5 million tonnes of direct reduced iron and 1.5 million tonnes of steel plate by Kudakwashe Muzoriwa May 2, 2023 Aramco and the Public Investment Fund (PIF) have signed an agreement with Chinese steelmaker Baoshan Iron and Steel Company (Baosteel) to build a steel plate manufacturing complex in Saudi Arabia. The energy giant said the steel manufacturing base has a designed annual capacity of 2.5 million tonnes of direct reduced iron and 1.5 million tonnes of steel plate. “The kingdom’s first steel plate production facility is expected to enhance Saudi Arabia’s steel industry ecosystem and improve supply chain localisation,” said Amin H. Nasser, Aramco president and CEO. The venture will build a steel manufacturing plant in Ras al-Khair Industrial City, one of the four new special economic zones that were recently unveiled by Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud, Prime Minister of Saudi Arabia. Aramco said the joint venture is combining its unrivalled energy and industrial services ecosystem, Baosteel’s advanced steel plate industry capability and PIF’s strong financial capabilities and investment expertise. The production facility will be equipped with a natural gas-based direct reduced iron furnace and an electric arc furnace, which aims to reduce carbon dioxide emissions from the steel-making process by up to 60 per cent compared to the blast-furnace-based steelmaking process, Aramco said in a statement. رئيس الشركة وكبير إدارييها التنفيذيين، أمين الناصر، يُعلن عن مشرع مشترك مع شركة باوستيل وصندوق الاستثمارات العامة؛ لإنشاء أول مجمع متكامل لتصنيع الألواح الفولاذية في المملكة، والذي يهدف لتوطين سلاسل الإمداد وتلبية الطلب في المملكة والمنطقة وتوليد الوظائف تعرف على المزيد ?… pic.twitter.com/iEISB5n4H6 — أرامكو (@saudi_aramco) May 1, 2023 Baosteel will reportedly own a 50 per cent stake in the joint venture, while Aramco and PIF will take a 25 per cent stake each. The project is subject to customary regulatory approvals and closing conditions. The steel manufacturing project is aimed at enhancing Saudi Arabia’s domestic manufacturing sector by localising the production of heavy steel plates, transferring knowledge and creating export opportunities. Saudi Arabia would be the project’s primary target market, with plans to export to the GCC and broader MENA region. Yazeed A. Al-Humied, deputy governor and head of MENA Investments at PIF said, “PIF is diversifying the Saudi economy by unlocking opportunities and enabling key strategic sectors in the local market.” The investment aligns with PIF’s strategy to unlock the capabilities of promising sectors and strategically important industries that can drive the diversification of the local economy. Aramco, PIF collaborations Meanwhile, the steel manufacturing venture is the latest collaboration between Aramco and PIF following the transfer of a 4 per cent stake in the energy giant to Sanabil Investments, a wholly owned company of the wealth fund. PIF is Crown Prince Mohammed bin Salman’s vehicle of choice to transform Saudi Arabia’s economy and diversify it away from heavy reliance on oil revenues. Similarly, Aramco is among the biggest listed companies in the kingdom that are spearheading several investments including the ‘Shareek program’. Aramco agreed to acquire a 10 per cent stake in China’s oil refining giant Rongsheng Petrochemical for $3.6bn (SAR784bn) in March, a deal that is set to significantly expand the state-owned energy giant’s refining presence in the country. The energy company’s joint venture in China, Huajin Aramco Petrochemical Company, will start the construction of a major integrated refinery and petrochemical complex in the country’s northeastern Liaoning province in Q2 2023. Read: Saudi Arabia transfers 4% Aramco stake to PIF Tags aramco China MENA PIF Saudi Arabia 0 Comments You might also like Riyadh Metro opens green, red lines as network nears full completion FIFA confirms Saudi Arabia as 2034 World Cup host Saudi Arabia’s PIF launches new hotel management company Parsons wins $53m 3-year contract for roads programme in Riyadh