Hebei Iron and Steel Group, China's largest steelmaker by output, said it had agreed to take 10% stakes in seven private steel mills.

It is part of an agreement that will expand production capacity and enhance consolidation in Hebei province's fragmented steel industry.

The joint ventures were formed with private rivals Jiujiang Wire, Yanshan Iron & Steel, Rongxin Group, Xinda Iron & Steel, Xinjin Iron & Steel, Yuhua Iron & Steel and Jinding Heavy Industry. They are all based in the cities of Qian'an or Wu'an, where a large number of steel mills were ordered to close to meet energy-saving goals last year, Hebei Steel said in a statement.

The seven mills have a combined steel capacity of more than 14Mt/y, the company said.

The move comes after Hebei Steel announced in November that it had acquired a 10% stake in five private steel mills in the province, indicating the giant steelmaker's ambition to get a bigger slice of market share.

Hebei Steel said it will set up a special department to negotiate with the 12 steel mills and help manage the firms, providing the mills with technology and its raw-material purchasing and sales channels.