Pohang Iron and Steel Corporation (POSCO) and Chongqing Iron and Steel Co Ltd will jointly build a steel mill with a capacity of 3 million tons in Chongqing. They will each contribute 50 percent of the total capital, according to a statement by the Korean company issued on Monday.

POSCO said it will sign the steel mill agreement before the end of the 2014. But it is still waiting for relevant government department approval.

The two companies will build the world's first FINEX-CEM model production line taking advantage of FINEX smelting reduction technology and CEM continuous headless rolling technology.

The Chinese steel company is expected to import advanced technologies through the partnership, China Business News quoted a source from the company as saying.