POSCO, the world's third-largest steel maker from South Korea, is considering to invest 4.5 billion U.S. dollars in building a hot-rolled steel mill in Vietnam, local newspaper Vietnam News reported Tuesday.

The future plant, expected to be located in Van Phong Bay in the central coastal province of Khanh Hoa and adjacent to a key seaport, will have an annual production capacity of 4 million tons in the first phase and eight million tons in the second one.

The South Korean firm has planned to complete the plant's feasibility study in 2007, start the construction in 2009 and finish it in 2010.

POSCO has planned to cooperate with Vietnam's largest ship builder, the Vietnam Shipbuilding Industry Group to build the mill, in which the Vietnamese side holds 30 percent of stakes.

Earlier this month, POSCO started to construct a 1.1-billion dollar cold-rolled steel plant, scheduled to begin production in 2009 in Vietnam's southern Ba Ria Vung Tau province.