(MENAFN- The Peninsula) Bloomberg
China's Baoshan Iron & Steel Co. has joined forces with Saudi Aramco and the kingdom's sovereign wealth fund to set up a steel plant in Saudi Arabia, as the two countries deepen commercial ties.
The complex in Ras Al-Khair on the kingdom's eastern coast will churn out up to 1.5 million tons of steel plates annually, with output expected to start by 2026. The venture will be Baosteel's first full-process production base overseas and have furnaces designed to cut carbon emissions.
The amount produced will be small - slightly less than the volume of raw steel made in the US each week. But the deal underscores the kingdom's desire to diversify the economy from oil by building up everything from heavy industries to tourism and technology start-ups.
Beijing and Riyadh have bolstered economic and political relations in recent years, with close to $50 billion of investment agreements inked during a China summit hosted by Saudi Arabia in 2022.
In addition, Saudi Aramco announced a brace of deals with Chinese companies earlier this year. The company will invest billions of dollars in Chinese refineries and petrochemical facilities, as well as ship nearly 700,000 barrels of additional oil a day to the country.
Aramco Chief Executive Officer Amin Nasser in March said the firm is "doubling-down” on its strategy to be an "all-inclusive source of energy and chemicals for China's long-term energy security.”
Baosteel didn't specify the companies' financial commitments for the steel plant. It will focus on heavy steel, according to Aramco, which is often used for oil platforms and hulls for tankers.
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