A subsidiary of the world’s largest
steelmaker, China Baeowu Steel Group, will have a 50% stake in a major new
Saudi-based venture.
A former steel mill is
illuminated at an industrial heritage site in Beijing's Shougang Park on July
17, 2024. — ADEK BERRY/AFP via Getty Images
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.