Tata Steel [Get Quote], India's second largest steel maker, on Sunday signed a joint venture agreement with an Iranian mining firm for multiple steel-making projects and mining activities in that country, a company statement said.

Tata Steel and Iranian Mines and Mining Industries Development and Renovation Organisation would set up a steel slab making facility and a steel billet unit at the Hormozgan Steel project in Bandar Abbas.

"Tata Steel would partner IMIDRO in the ongoing Hormozgan Steel project, which would establish steel-making operations in the Persian Gulf Special Economic Zone at the port city of Bandar Abbas.

"The first phase of this gas based steel project would establish a steel slab making facility, which would be followed by the second phase to establish a steel billet making capacity," a Tata Steel statement in Kolkata said.

The two companies would also explore and mine unexplored iron ore deposits at Gol-e-Gohar in Iran's Kerman province and set up a gas-based pellet plant using iron ore from these mines.

The financial details of the projects weren't made available immediately.

Tata Steel has also signed an agreement of intent to establish a separate export-oriented steel plant in the port city of Bandar Abbas.

"Tata Steel has, after due consideration and evaluation, decided to move ahead with its proposed projects in Iran.

"Owing to favourable factors in terms of production, the envisaged steel plants would emerge to be amongst the lowest cost producers of steel in the world," the statement quoted company managing director B. Muthuraman as saying in Tehran.

India has become a hotspot for global corporations to set up steel plants. South Korea's POSCO Ltd., the world's fifth-largest steel maker, is all set to ink a deal to set up a $12-billion steel complex in India's eastern, mineral-rich state of Orissa.

Tata Steel has been looking at acquiring steel plants overseas as part of its plans to expand production capacity to 15 million tonnes by 2010.