News Global Market Saudi Arabia 02 May 2023
The enterprise is planned to be commissioned by the end of 2026
China’s largest steel producer Baoshan Iron&Steel (Baosteel) has signed an agreement with oil and gas giant Saudi Aramco and Saudi Arabia’s Public Investment Fund (PIF) to establish a joint venture. Reuters informs about it.
Baosteel will receive 50% of the JV’s shares, Saudi Aramco and PIF – 25% each.
As part of the partnership, it is planned to build a steel plant in Saudi Arabia with a design capacity of 2.5 million tons of direct reduction iron (DRI) and 1.5 million tons of rolled steel per year. The project still needs to be approved by regulatory authorities. The enterprise is planned to be commissioned by the end of 2026.
The steel plant plans to install a direct reduction iron unit and an electric arc furnace that will run on natural gas. This will reduce carbon emissions by more than 60% compared to blast furnace steel production.
As GMK Center reported earlier, in January 2023, PIF signed the agreement with the state-owned Ma’aden on the creation of a new company. The company, 51% of which will be owned by Ma’aden, will aim to invest in mining assets around the world to provide Saudi Arabia with strategic raw materials, including iron ore, and strengthen the country’s position as a link in the global supply chain. The initial capital of the new company will be $50 million.
As GMK Center reported, last September Saudi Arabia announced its intention to implement three steel production projects worth $9.32 billion. The country’s government held negotiations with local and international investors. It was planned that the total production capacity of the new steel enterprises would be about 6.2 million tons.