China's Anshan Iron and Steel Group <0347.HK>, also known as Angang, confirmed on Monday it would invest in a steel mill in the United States.

The state-owned firm will gain a stake in a $175 million rebar facility now under construction in Amory, Mississippi after signing investment, technology and sales agreements with the Steel Development Company (SDCO) in New York on May 13.

This is our first mill in the United States, although we already have a trading company there, a senior planning official with the company said.

The official, who did not want to disclose his name, did not give any further details on the size of the investment.

The deal will need the approval of the Ministry of Commerce, which said Angang was likely to receive its backing.

We haven't received the application but we support Chinese enterprises investing overseas, said Yao Jian, spokesperson with the Ministry of Commerce, at a press briefing on Monday.

Jia Yinsong, head of the raw materials department at the Ministry of Industry and Information Technology, last week urged Chinese steel mills to make overseas acquisitions in order to circumvent trade barriers.

Chinese steel product exports fell almost 60 percent in 2009 as a result of the global financial crisis, and the China Iron and Steel Association has complained that the recovery this year is being hobbled by growing protectionism in Europe and the United States.

In April, the United States imposed 30-99 percent anti-dumping duties on Chinese steel pipe imports, one of 29 trade disputes involving Chinese steel makers since 2007, according to World Trade Organisation figures.

Angang, based in northeast China's Liaoning province, has already completed a merger with Benxi Iron and Steel Group to form the Anben Steel Group, China's fourth biggest producer with 29.3 million metric tons of output in 2009.

(Reporting by Ruby Lian, Wang Lan and David Stanway, Editing by Jonathan Hopfner)

China U.S.