Anshan Iron & Steel Group on Wednesday inked an agreement withSteel Development Company (SDC) to jointly build a steel rebar plant in the United States, ending doubts on whether the deal would go forward due to opposition from US lawmakers.

Total investment in the Mississippi steel rebar project is $168 million, with Anshan Steel taking a 14 percent stake in it, said John Correnti, chairman of SDC.

"The plant has entered the pre-construction stage and will start production by the first quarter of 2012, " he said.

Zhang Xiaogang, president of Anshan Steel, said the project has to be approved by the Chinese and US governments.

The investment, first proposed in May this year, got off to an acrimonious start with the US Congressional Steel Caucus urging the Obama administration to obstruct the proposed joint venture, claiming it would imperil US jobs and threaten national security.

Nearly 50 lawmakers wrote to the US Treasury Department in June to investigate whether Anshan Steel's investment could be blocked.

Earlier reports said Anshan Steel would exit the project due to opposition in the United States. But the company said last month that it was committed to working closely with US partners to push forward the SDC project.

"Only 52 Congressmen signed the proposal, while the other 400 Congressmen didn't," said Correnti. He said nothing has changed from the previous agreement despite the objections.

SDC plans to build and operate four rebar mills and one mill to produce electrical and silicon grades of steel used in energy applications, it said in a statement.

Zhang said that Anshan Steel will wait for the first steel rebar mill to start operations and moves by other investors before deciding on whether to increase its investment.

The statement said the environmental and other necessary permits for the first rebar mill are already in place, and construction work has commenced.

Correnti said the first rebar plant will create 1,000 construction jobs and 150 permanent jobs.

Analysts said steel rebars are mostly used in concrete and masonry structures. The project, with an annual capacity of 300,000 tons of rebar, is unlikely to have any impact on the US steel market.

Steel rebar demand in the US market is around 9 million tons a year. Of this, 7 million tons come from local mills, while imports from Turkey, Spain and South Korea make up the balance, said Correnti.

John D Watkins, chairman of the American Chamber of Commerce in China, said the total output of the project represents 0.3 percent of the US steel market. In addition, Anshan Steel will have no management control, so the national-security concerns are unfounded.

Protests over Chinese investment projects in the US market began in 2005 when China National Offshore Oil Corp offered $18.5 billion to acquire Unocal Oil Co.

The bid faced strong opposition from US lawmakers who claimed it was a national-security threat and was scrapped.