He said the Saudi Arabian SA Holding (SASAH) investment company would spend the initial capital on feasibility studies for investment in South African agriculture and Saudi Arabian mining and petrochemicals.

"Saudi Arabia has identified gold mining and other base materials. They've chosen not to exploit those previously... but are now moving towards expropriation and looking at South African technology and expertise," Davies said.

The middle eastern country was also looking at investing in South African agriculture for food security and stimulating local job creation.

As a first option, it could be a major shareholder in joint ventures, entitled to free five percent equity in projects initiated and promoted by it.

It would also act as a "government endorsed" facilitator for businesses looking to invest in large-scale projects in their counterpart countries.

Davies said he was hoping investment by Saudi Arabian companies in South Africa would run "into tens of billions of rands" in the next few years.

Saudi Arabia-SA Business Council chairman Iqbal Surve said the Saudi Arabian crown prince Nayef bin Abdul Aziz had formally endorsed the holding company.

"We are ready to tango and waiting for South Africa to join the dance as well." He said that if the company was successful, South Africa could benefit from investment through Saudi Arabia's sovereign wealth fund, "one of the wealthiest in the world".