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Shanxi Taigang Stainless Steel Co, China's largest stainless steel mill, and its State-owned parent will invest about 8.8 billion yuan ($1.27 billion) to develop a large iron mine, Taigang said on Monday.

The mine, in northern China's Shanxi Province where the company is based, will have the capacity to produce 7.5 million tons of high-quality iron ore concentrate a year, the company said in a statement.

Taigang said it will establish a joint venture for the project with its parent, Taiyuan Iron and Steel Group, and will hold at least a 35 percent stake in the venture.

The mine will supply more than 2.6 million tonnes of iron ore concentrate to Taigang a year, it added.