New Delhi, March 16 (IANS) ArcelorMittal, the world's largest steel maker, Tuesday said it has joined hands with Dayen of Turkey to set up a steel mill in Iraq at an investment of $130 million.

The two companies have signed a memorandum of understanding to establish a joint venture for building a mini-mill with electric furnace in Sulaimaniyah in Northern Iraq, a company statement said.

The Luxembourg-based ArcelorMittal, led by NRI billionaire L N Mittal, said the two companies will jointly invest $100-$130 million in the plant which will produce per year around 250,000 metric tonnes of steel bars used by builders.

'There is great demand for steel products for the local construction industry, which we aim to meet, working closely with Dayen,' the statement added.