Aramco, Baoshan Iron & Steel Co., Ltd. (Baosteel), and the Public Investment Fund (PIF) have inked a joint venture (JV) to establish an integrated steel plate manufacturing complex in the Kingdom of Saudi Arabia.

The JV complex is expected to be located in Ras al-Khair Industrial City, one of the four new Special Economic Zones recently announced by Prince Mohammed bin Salman, Prime Minister and Chairman of the Council of Economic and Development Affairs.

Up to 1.5 million tonnes of steel plates might potentially be produced annually at the plant. A direct reduced iron (DRI) furnace powered by natural gas and an electric arc furnace, which seeks to cut CO2 emissions from the steel-making process by up to 60% in comparison to a conventional blast furnace, would also be included. Future CO2 emissions from the DRI plant might be reduced by up to 90% without the need for significant equipment improvements because it is compatible with hydrogen.

Amin H. Nasser, Aramco President & CEO, said: “The Kingdom’s first steel plate production facility is expected to enhance Saudi Arabia’s steel industry ecosystem and improve supply chain localization. Under Aramco’s flagship industrial investment program, Namaat, and supported by the government’s Shareek program, this joint venture is expected to create jobs and contribute to economic growth and diversification. This joint venture 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.”

Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF, said: “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. It will also build on PIF’s mandate to establish new strategic partnerships locally and globally; localize technologies and knowledge; enable the private sector; and create more direct and indirect job opportunities in the local market. Since 2017, PIF has invested in 13 strategic sectors and established 77 new companies domestically.”

Zou Jixin, Chairman of Baosteel, said: “This project is an active practice by Baosteel 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 localization of the steel industry chain, job creation and local economic prosperity in Saudi Arabia.”