Inner Mongolia Baotou Steel Union (SHA:600010) plans to establish a 3.25 billion yuan joint venture with the power grid assets of its subsidiary, Inner Mongolia Baotou Rare Earth Steel Plate, according to a Shanghai Stock Exchange filing on Nov. 21.

Baotou Steel will partner with its controlling shareholder, Baotou Iron and Steel (Group), and subsidiary, China Northern Rare Earth (Group) High-tech, in establishing the power supplying and generating venture, Inner Mongolia Baogangxin Energy.

The Chinese steelmaker will own 46% of the venture after investing approximately 1.50 billion yuan with Inner Mongolia Baotou Rare Earth Steel Plate's assets. Baotou Steel shares' investment scope includes about 824 million yuan of its own assets, while the other part of the investment assets requires the company to purchase about 673 million yuan of assets from Inner Mongolia Baotou Rare Earth Steel Plate, which will be invested into the venture.

Inner Mongolia Baotou Rare Earth Steel Plate will transfer the 220-kilovolt 82# and 83# substations of the Guankou power grid to the venture, both having a total amount of approximately 300 million yuan.

Baotou Iron and Steel will own nearly 49% of the venture, investing about 1.59 billion yuan into its capital, the filing said.

China Northern Rare Earth will own 5% of the venture after investing 163 million yuan.

The company's shares rose less than 3% in recent trade.