RIYADH: Saudi Arabia will soon host the Kingdom’s first integrated steel plant, thanks to an agreement signed by energy giant Saudi Arabian Oil Co., China-based Baoshan Iron & Steel Co., and the Kingdom’s sovereign wealth fund.
According to a press release, the joint venture complex is expected to be located in Ras Al-Khair Industrial City, and the facility would have a steel plate production capacity of up to 1.5 million tons per year.
The press release further noted the Kingdom aims to improve the domestic manufacturing sector with this project.
The business will also localize heavy steel plate production, transfer knowledge and create export opportunities in the Kingdom.
“The Kingdom’s first steel plate production facility is expected to enhance Saudi Arabia’s steel industry ecosystem and improve supply chain localization,” said Aramco President and CEO Amin Nasser.
This joint venture will be equipped with a natural gas-based direct reduced iron furnace and an electric arc furnace, which could reduce carbon dioxide emissions from the steel-making process by up to 60 percent compared to a traditional facility.
The DRI furnace will also have the option to use hydrogen as its fuel, which could further reduce carbon dioxide emissions by up to 90 percent.
The investment aligns with the Public Investment Fund’s strategy to unlock the capabilities of promising sectors and strategically important industries that can drive the diversification of the local economy, in line with the goals outlined in Vision 2030.
Nasser added: “This joint venture is also an example of bringing together expertise from other sectors.”
Yazeed Al-Humied, deputy governor and head of Middle East and North Africa investments at the PIF, said the fund is diversifying the Saudi economy by unlocking opportunities and enabling vital 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,” said Al-Humied.
