(Yicai) April 14 -- Hailiang, the world's largest supplier of copper tubes and rods, will team up with strategic investment and development company Rawas National Investment Holding to establish a copper materials processing joint venture in Saudi Arabia for USD566 million, expanding the Chinese firm's overseas footprint.

Hailiang plans to ink an investment agreement with Rawas to set up the JV to oversee the investment, construction, and operation of the copper project, the Zhejiang province-based company said in a stock exchange filing yesterday. The former will own 51 percent of the new firm and the latter the rest, it noted, without disclosing when the deal will be signed.

The project will be built in Dammam Port, the second-largest port in Saudi Arabia, Hailiang noted. It has a planned annual copper processing capacity of 150,000 tonnes, including 30,000 tonnes of copper tubes, 20,000 tonnes of copper busbars, 50,000 tonnes of refined recycled copper, and 50,000 tonnes of copper foil, it added.

The JV will leverage Saudi Arabia's copper ore resources, competitive energy costs, and policy incentives to explore the local market and expand into the Middle East, Europe, and Africa, Hailiang said. It will also help enhance the Chinese company's supply chain stability and overall operational efficiency, create synergies with its existing overseas plants, and improve its global industrial layout, it pointed out.

In addition, the project will fully leverage the government, social, and security resources of Rawas and its shareholders in Saudi Arabia to secure policy support and security guarantees from local authorities and maintain a stable operating environment, Hailiang noted.

Hailiang is closely monitoring potential impacts on project safety and investment returns from geopolitical tensions, regional conflicts, security conditions, and other international developments in the Middle East, it stressed. The company will strictly comply with the Chinese government's risk prevention and control requirements for outbound investment and adhere to a strategy of advancing the project only when risks are controllable and conditions are mature, it added.

Hailiang is a major supplier of copper foil for lithium batteries. It has copper processing factories in Houston, Hungary, Vietnam, Thailand, Indonesia, and Morocco.

Its shares [SHE: 002203] rose 1.8 percent to CNY15.52 (USD2.28) apiece as of 10.20 a.m. in Shenzhen today.

Editor: Martin Kadiev