China’s Baosteel signs deal with Saudi Aramco, PIF to build ‘green steel’ plant as part of Belt and Road Initiative

Baosteel will invest US$437.5 million for a 50 per cent stake in the proposed joint venture with Saudi Aramco and Public Investment Fund

The partners aim to make project the world’s ‘most competitive low-carbon emission thick steel plates’ plant

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China’s Boasteel is setting up a steel plant in Saudi Arabia in a joint venture with Aramco and Public Investment Fund. Photo: Reuters

Published: 5:00pm, 4 May 2023

Baoshan Iron and Steel (Baosteel) plans to build its first overseas “green steel” plant in a joint venture with two state-backed companies in Saudi Arabia, as part of China’s Belt and Road Initiative.

The flagship unit of China Baowu Group, the world’s top steelmaker, has agreed to plough US$437.5 million for a 50 per cent stake in the proposed joint venture, Baosteel said in a filing to the Shanghai stock exchange on Thursday.

Oil and gas giant Saudi Aramco and Saudi sovereign wealth fund Public Investment Fund (PIF) will together invest the same amount and split the remaining 50 per cent stake.

An agreement was signed in Saudi Arabia on May 1. Baosteel has agreed to provide up to US$1.33 billion of financing guarantee to the joint venture, it said in a separate filing.

Representatives from Baosteel, Saudi Aramco and Public Investment Fund attend a signing ceremony in Dammam, Saudi Arabia, on May 1, to set up an integrated steel plate manufacturing complex in Saudi Arabia. Photo: Xinhua

The investors aspire for the project to become the world’s “most competitive low-carbon emission thick steel plates” plant, targeting Middle East and North Africa customers in the oil and gas, shipbuilding, offshore engineering and construction sectors.

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