Luxembourg: ArcelorMittal, the world's biggest steelmaker, Wednesday said it has signed a joint venture agreement with Hunan Valin Steel Group of China to produce and sell electrical (silicon) steel.

The new joint venture, named Valin ArcelorMittal Electrical Steel, has a registered capital of RMB 2.6 billion (about $379 million), each party retaining 50 percent of the shares.

It will build cold rolling and processing facilities for the production of non-grain oriented (NGO) and grain oriented (GO) electrical steels, the company said.

The total investment is estimated at RMB 6.5 billion ($948 million), aiming for an annual production of 400,000 tonnes non-grain oriented and 200,000 tonnes grain oriented steel. ArcelorMittal will transfer its latest NGO and GO technologies to the joint venture.

Alongside, Valin Lian'gang, a subsidiary of Valin Steel Tube & Wire, signed a supply agreement with the joint venture.

In order to supply high-quality hot-rolled substrate to the electrical steel joint venture, Valin Lian'gang also signed a Technology License Agreement with ArcelorMittal for the transfer of NGO and GO upstream technologies.

ArcelorMittal's R&D centres in Brazil and Europe are dedicated to continuing product improvement as well as development of new, higher performance grain oriented grades.

Gonzalo Urquijo of ArcelorMittal said: "This electrical steel joint venture will allow Valin and ArcelorMittal to produce the latest generation and very high performance electrical steel grades in China, thanks to the technology transfer and the continuing R&D efforts from ArcelorMittal."

"It is a significant step forward in ArcelorMittal's strategy for supplying the market worldwide with high-quality electrical steels," he added.