ArcelorMittal said it has received Chinese government approval for a steel sheet production project with China's Valin Iron & Steel Group that domestic media said would have estimated production capacity of 1.1 million tonnes a year.
The new steel sheet plant, which would supply the auto industry in line with China's target to develop high-end steel products, will be controlled 34 percent by Hunan Valin Steel Co and 33 percent each by Valin Steel Group and ArcelorMittal.
"In terms of when we will start construction, we need to discuss our next moves with Valin since we've just got the green light from the National Development and Reform Commission," an ArcelorMittal China spokeswoman said on Friday. She gave no further details on the deal.
China's 21st Century Business Herald reported that the project would be worth more than 12.3 billion yuan ($1.81 billion) and would include a 50-50 joint venture between Valin Steel Group and Arcelor to produce 500,000 tonnes a year of electrical steel, mainly used in home appliances and electronic goods.
The initial agreement among the three companies, signed almost two years ago, aimed for annual production capacity of 1.2 million tonnes of flat carbon steel, mainly for use in the automotive sector.
Officials from Valin Steel Group and its Shenzhen-listed arm could not be reached to comment.
China's Valin Group, based in Hunan province, has said it aims to boost its annual crude steel capacity to 30 million tonnes over the next two years from 11.8 million tonnes last year.
