China's Anshan Iron & Steel Group Corp. (Ansteel) has inked an agreement with the Mississippi-based Steel Development Co. to jointly build a steel plant in the United States, which could produce 300,000 tons of rebar annually.

The total investment in the plant was estimated at $168 million, with Ansteel taking a 14-percent interest. The plant has entered the pre-construction stage, and will start production by the first quarter of 2012.

Zhang Xiaogang, General Manager of Ansteel, said they planned to continue cooperation to build four other "technologically advanced and environment-friendly steel mills" if the first venture was a success.

The deal, first proposed in May this year, hit a bumpy road in the United States with 52 U.S. congressmen in early July urging the Obama administration to block the investment, claiming it would hurt U.S. jobs and threaten national security.

"The deal has support from the U.S. Government, and the joint venture will increase job opportunities and local tax revenue," said John Correnti, Chairman and CEO of Steel Development Co.

The national security concerns are unfounded, said John D. Watkins, Chairman of the American Chamber of Commerce in China.

"Steel Development will produce rebar from recycled steel, and while the company's approach is innovative, the process itself is low-tech," he said. "Ansteel will take no more than a 20-percent stake and have no management control."