Mumbai: ArcelorMittal, the world's largest producer of steel, has teamed up with China's Hunan Valin Group and Hunan Valin Steel Co to set up Valin ArcelorMittal Automotive Steel, an automotive joint venture with annual capacity to produce 1.2 million tonnes of flat carbon steel, mainly for automotive applications.

Products will include cold rolled steel, galvannealed steel and pure zinc galvanized steel, ArcelorMittal said in a release.

The setup of this new joint venture is still subject to regulatory approval.

Hunan Valin Steel Co will own 34 per cent in the new joint venture while ArcelorMittal and Hunan Valin Group will each have a 33 per cent equity stake.

The new facility will be located in Hunan Province next to Hunan Valin Steel Co's subsidiary, Lianyuan Steel, which will supply hot rolled coil to the new joint venture.

''We have been working closely together with Hunan Valin Steel Co for three years now and the cooperation is going very well. We are making a lot of progress and the signing of these joint venture contracts is only further proof of this. This automotive joint venture is part of our global and China strategy, aiming to better serve both our global as well as domestic automotive clients by offering high value added products with the support of ArcelorMittal technology,'' Lakshmi Mittal, chairman and CEO of ArcelorMittal said.

''Hunan Valin's long term development and future really depends on the technological platform jointly set up with ArcelorMittal. Valin is structurally transforming its product portfolio and targeting high added-value products, allowing us to differentiate ourselves from our competitors and to accelerate the transformation of Hunan province,'' said Li Xiaowei, chairman of Hunan Valin Group.

The Valin Group is a large-sized enterprise set up by three steelmakers - Xiangtan Iron & Steel, Lianyuan Iron & Steel and Hengyang Steel Tube - in Hunan province in 1997, currently has 57,000 employees, including 12,000 technical staff.

Valin Group has over 10 subsidiaries under direct or indirect control, including Xiangtan Iron & Steel, Lianyuan Iron & Steel, Hengyang Steel Tube, Nanfang Building Materials, etc.