SEOUL--South Korean steelmaker Posco (005490.SE) said Tuesday it and its partners have agreed to purchase a 15% stake in an ArcelorMittal (MT)-controlled iron ore mining company in Canada for $1.1 billion.

Posco and its partners agreed on Monday to acquire the stake in ArcelorMittal Mines Canada Inc., a Seoul-based Posco official Kim Ji-young told Dow Jones Newswires. She declined to identify Posco's partners and say how much each partner would be investing.

South Korea's Yonhap news agency earlier Tuesday reported China Steel will invest $540 million for the acquisition, while Posco will put in $270 million. Yonhap didn't cite sources for its report, which also said Posco is looking for other potential investors, including a Korean pension fund, to join the consortium.

The acquisition would give Posco, the world's sixth-largest steelmaker by output, greater access to a key raw material for its steel production.

Write to Kwanwoo Jun at kwanwoo.jun@dowjones.com

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