Tata Steel, the world's seventh-largest steel maker, will spend £800 million ($1.3 billion) at its Welsh facilities over the next five years.

The move comes after the Indian steel maker said in December that it would mothball its Llanwern hot strip mill in Newport, South Wales, due to weak demand for steel and a poor economic outlook.

The £800-million investment at the Welsh facilities was today announced by the first minister of Wales, Carwyn Jones after meeting senior Tata Steel officials during his visit to India last week.

This investment will be used to improve production, product mix, quality and product range at their plants in Wales.

Tata Steel Europe (formerly known as Corus), the region's second largest steel producer after ArcelorMittal, has plants at Port Talbot and Shotton in Wales and employs 7,500 people in the country.

But a Tata Steel spokesperson said that the company has committed to invest £240 million on projects and could not be more specific about further investment at this stage.

The investment was an expression of intention and vision for Port Talbot and the steel industry in Wales.

The company plans to spend £185 million in the near term on rebuilding a blast furnace at Port Talbot, which is scheduled to start in June, and an additional £53 million on upgrading the steel-making shop.

A blast furnace is normally relined every 10, 15 or 20 years and a complete rebuild, which is an even bigger project than a reline, is an investment with a similarly long-term horizon.

Other near-term investment projects take the investment committed at Port Talbot to almost £250 million.