Baoshan Iron & Steel Co Ltd (Baosteel), China’s biggest listed steelmaker, said on Wednesday it had signed an initial pact with the world’s top crude oil producer Saudi Aramco to study building a steel plate factory in Saudi Arabia.
The nonbinding memorandum of understanding was one of a number of agreements state-controlled Aramco inked on Tuesday in a major expansion of its industrial investment programme.
In a filing to the Shanghai Stock Exchange, Baosteel said the companies planned to carry out a feasibility study on building a plant to make heavy steel plates, which are widely used in the construction industry.
Aramco signed a similar agreement with South Korean steel giant Posco last year.
The intended cooperation is “in line with Saudi Arabia’s ‘Vision 2030’ and the Chinese government’s ‘One Belt, One Road’ initiative”, Baosteel said.
Saudi Arabia’s Vision 2030 is a plan to diversify the Middle East kingdom’s economy away from oil, while the Belt and Road Initiative is Chinese President Xi Jinping’s flagship trade and infrastructure scheme.
Going international and building steel plants overseas has always been part of Baosteel’s long-term strategy, the company said.