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CNA Group has signed a non-binding memorandum of understanding to take a 5 per cent stake in a bauxite-processing plant and mine in Shanxi, China.
The value of the investment will be determined after due diligence, the company said on Thursday.
Michael Ong, chief executive of CNA, a building management systems provider, described the move as a "new strategic direction to develop revenue streams from investments to balance cyclical project revenues".
The agreement is with LiuLinxian Senzetengfei Aluminium Industry Co, which will provide engineering expertise and services to operate the business within China.
The mine has estimated reserves of S$600 million and the plant is already generating income of about S$10 million a year, CNA said. The investment, if completed, will have a material impact on 2015 results, the company added.
CNA shares traded at 2.2 Singapore cents on Thursday after the announcement.