China’s Baosteel ups investment in Saudi steel plate venture to $1B
A subsidiary of the world’s largest steelmaker, China Baeowu Steel Group, will have a 50% stake in a major new Saudi-based venture.
China-based company Baosteel announced Thursday it had more than doubled its investment in a steel plate venture in Saudi Arabia to $1 billion.
Baosteel, a subsidiary of the world’s largest steelmaker, China Baowu Steel Group, said in Shanghai Stock Exchange statement that it will have a 50% stake in the Saudi venture, based in the kingdom’s special economic zone Ras Al-Khair Industrial City on the northeast coast of the country.
The venture will process commodities and supply construction, gas, oil and shipping industries across the Middle East and North Africa, Baosteel said in the statement.
In May, Baosteel signed agreements with state-run oil company Saudi Aramco and the Saudi Public Investment Fund to establish the venture. The Saudi companies will each hold 25% stakes.
Baosteel had originally agreed to pump $437.5 million into the venture before announcing Thursday it would increase that figure to $1 billion.
Saudi Arabia is deepening its economic ties with China as the kingdom seeks foreign direct investment to help it achieve its ambitious Vision 2030 plan to diversify its economy away from reliance on oil by investing in other sectors.
China is also looking to ramp up steel exports as domestic demand has been sluggish.
Ras Al-Khair is one of Saudi Arabia’s five special economic zones and will serve as a minerals and metals hub for the kingdom. The zone is also involved in providing facilities for the global maritime industry.
Many of these minerals and precious metals are crucial in the energy transition and Saudi Arabia is looking to become a global hub for the commodities it works with.
