China's largest steelmaker, Baoshan Iron and Steel (Baosteel), has announced plans to more than double its investment in a joint venture for flat product production in Saudi Arabia, raising the total to $1 billion from approximately $437.5 million. This decision follows an agreement signed in May with Saudi Aramco and the Saudi Public Investment Fund (PIF), where Baosteel will hold a 50% stake, while both Saudi entities will each hold 25%.

In a regulatory filing, Baosteel also revealed a reduction in the principal amount of collateral for financing the joint venture, lowering it to nearly $1.1 billion from $1.3 billion. The new facility, located in Ras al-Khair, is expected to have an annual capacity of 2.5 million tons of direct reduced iron and 1.5 million tons of flat products, catering primarily to the oil, shipbuilding, and construction sectors in the Middle East and North Africa.

This investment aligns with Saudi Arabia's efforts to attract foreign investments across various industries, including metals, while China seeks to strengthen economic ties with Gulf nations amidst declining domestic demand for steel. Additionally, the Indian conglomerate Essar Group has confirmed a $4 billion investment for an environmentally friendly steel production facility in the same region.