SEOUL - South Korean steel maker Posco along with its partners have agreed to buy a 15 per cent stake in ArcelorMittal MinesCanada Inc, a subsidiary of the global steel giant ArcelorMittal, for $1.1 billion.

While confirming the news, Seoul based spokeswoman of Posco Kim Ji-young declined to identify Posco's partners.

The Korean steelmaker, which is the third largest in Asia, hasn't decided on the amount of stake it will purchase or for how much, Chung said .

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

The Maeil Business Newspaper however said Posco and its partners would buy a 15 per cent stake in the Canadian mine for $1.1 billion.

South Korean news agency Yonhap News on Tuesday also claimed that a group that includes Posco and China Steel Corp., would buy the stake for $1.1 billion.

While China Steel is expected to invest $540 million, Posco will put in $270 million, the report added.

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.

ArcelorMittal is said to be considering the sale of 30 per cent of its Canadian iron ore unit.

The unit has annual output of around 15 million metric tons of iron ore concentrate and 9 million tons of iron oxide pellets,according to its website.

The Canadian subsidiary of the ArcelorMittal operates two open pit mines, producing around 40 per cent of Canada's iron ore output.

Last month ArcelorMittal said it expects to take about $4.3 billion as non-cash impairment charge in the fourth quarter, related to a write down of goodwill in its European businesses, amid a weaker macro economic and market environment.

Earlier in October, ArcelorMittal slashed its dividend, after reporting a loss for the third quarter, as steel shipment volumes fell and revenues declined amid a slowdown in China.

The company's board reduced the annual dividend payment to $0.20 per share from $0.75 per share in 2012, citing the challenging global economic conditions and the priority to cut debt.