The firms will work together to develop an innovative steel plate manufacturing complex in the Kingdom
Aramco and the Public Investment Fund (PIF) have joined forces with Baosteel, the world’s largest steel conglomerate, to establish an integrated steel plate manufacturing complex in the Kingdom. It is set to provide a production capacity of up to 1.5m tonnes per year.
Subject to customary regulatory approvals and closing conditions, the joint venture (JV) complex will be built in Ras Al-Khair Industrial City, one of the four new special economic zones recently announced by His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince, Prime Minister and Chairman of the Council of Economic and Development Affairs.
It will be the first facility of its kind in the Kingdom (as well as in the GCC region), and is expected to strongly advance the regional steel industry ecosystem. The project aims to enhance the domestic manufacturing sector through localising the production of heavy steel plates, transferring knowledge, and creating a raft of new export opportunities.
The plant will be equipped with a natural gas-based, direct reduced-iron (DRI) furnace and an electric arc furnace, which aims to reduce CO2 emissions from the steel-making process by up to 60% compared to a traditional blast furnace.
In early January 2023, Dana Steel announced a major new facility in Abu Dhabi.
The DRI plant would be compatible with hydrogen without the need for major equipment modifications, potentially reducing CO2 emissions by up to 90% in the future.
Aramco President & CEO, Amin H. Nasser said, “The Kingdom’s first steel plate production facility is expected to enhance Saudi Arabia’s steel industry ecosystem and improve supply chain localisation. Under our flagship industrial investment programme, Namaat, and supported by the government’s Shareek programme, this JV is expected to create jobs and contribute to economic growth and diversification. This JV is also an example of bringing together expertise from other sectors. With Baosteel and PIF supporting in-capacity building in the Kingdom’s industrial sector, Aramco aims to create additional value for our company and our partners.”
PIF Deputy Governor and Head of MENA Investments, Yazeed A. Al-Humied added, “PIF is diversifying the Saudi economy by unlocking opportunities and enabling key strategic sectors in the local market. This partnership aims at establishing an integrated steel plate manufacturing facility that will strengthen Saudi Arabia’s industrial development and enable its role as a supplier within the metal industry.”
The investment aligns with PIF’s strategy of resourcing promising sectors and technologies, and the most strategically important industries, in order to drive the diversification of the local economy.
In mid January 2023, Emirates Global Aluminium announced the Aluminium Recycling Coalition.
Baosteel Chairman Zou Jixin commented, “This project is an active practice by our group to explore lower-carbon paths for the steel industry, a major achievement in promoting the international development strategy of Baosteel. The project aims to contribute positively to the localisation of the steel industry chain, to job creation, and to local economic prosperity in Saudi Arabia.”
In early February 2023, a Saudi-Korean JV broke ground on a $240mn stainless steel pipes production facility.