DUBAI, (Reuters) – Saudi Basic Industries Corp (SABIC) is considering investments in iron ore mines overseas to reduce the impact of rising prices on its steel production unit, a magazine reported on Wednesday.
Demand for steel in Saudi Arabia has been outpacing supply, and competitors of Hadeed, the steel producer that SABIC controls, have been raising prices, SABIC Chief Executive Officer Mohamed al-Mady said on Tuesday.
SABIC, the Gulf’s largest steel maker, is looking at possible investments in iron ore mining, London-based MEED said, citing a source close to the company.
It gave no further details.
Hadeed can produce as much as 5.5 million tonnes per year of steel, according to the Web site of Arab Steel, an industry association.
Mutlaq al-Morished, SABIC’s chief financial officer could not immediately be reached for comment.
Morished said in November SABIC will almost triple steel output by 2020, but was not seeking steel acquisitions beyond its home region.
SABIC’s sources of iron ore include Turkey and Ukraine, Morished said.
It sold its stake in a Mauritanian iron ore venture last November to Qatar’s Industries Qatar, saying returns would be too low.