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Aramco, Baosteel, and PIF collaborate to establish a steel manufacturing facility in the Kingdom of Saudi Arabia.
A shareholders' agreement has been signed between integrated energy and chemicals company Aramco, steel conglomerate Baosteel, and the Public Investment Fund (PIF) to build the first integrated steel plate manufacturing complex in Saudi Arabia. Pending customary regulatory approvals and closing conditions, the joint venture will be situated in Ras al-Khair Industrial City, a Special Economic Zone recently announced by Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud.
The facility, which will merge Aramco's energy and industrial services, Baosteel's steel plate industry know-how, and PIF's financial capabilities, will be the first of its kind in the Kingdom and the GCC region. This project aims to bolster the domestic manufacturing sector by localizing heavy steel plate production, facilitating knowledge transfer, and opening up export opportunities.
With a planned steel plate production capacity of up to 1.5 million tons per year, the facility will also feature a natural gas-based direct reduced iron (DRI) furnace and an electric arc furnace. These innovations aim to reduce CO2 emissions from the steel-making process by up to 60% compared to traditional blast furnaces. Furthermore, the DRI plant's compatibility with hydrogen could potentially reduce CO2 emissions by up to 90% in the future.
Aramco President & CEO Amin H. Nasser stated, "This joint venture is expected to create jobs and contribute to economic growth and diversification." Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF, added that this partnership aims to "strengthen Saudi Arabia's industrial development and enable its role as a supplier within the metal industry."
Zou Jixin, Chairman of Baosteel, expressed that the project signifies "an active practice by Baosteel to explore lower-carbon paths for the steel industry." The facility is expected to serve the local market, with plans to export to the GCC and broader MENA region and will support customers in various strategic industrial sectors.