Japan's Sojitz Corporation, a major trading enterprise, has signed an agreement to study the production of steel sheets in Iran's southeastern port of Chabahar in Sistan-Baluchestan Province, a report said.

The project would be a milestone in Iran’s bid to raise its steel product output to 55 million tons per year, Mehdi Karbasian, managing director of Iran's Industrial Development and Renovation Organization (IDRO) was quoted as saying in the Iran Daily report, which cited Irna.

Karbasian said that Sojitz would present its research findings to IDRO by September, adding that this would be followed by two months of negotiations to seal a final agreement on production of steel sheets.

The agreement would be implemented under a credit line of above $10 billion that Japan has allocated for Iran, he added.

Another Japanese company — Kobelco — is developing Mokran Steel Complex in Chabahar with a production capacity of three million tons of sponge iron per year, he noted.

The project that Sojitz is studying will be launched once Mokran Steel Complex reaches the production capacity of 1.6 million tons per year, he added.