ArcelorMittal Tailored Blanks, a subsidiary of Luxembourg steel producer ArcelorMittal, intends to spend $83 million to set up a new manufacturing plant in Detroit and create at least 120 jobs over five years, on top of 13 employees already in the state, the Michigan Economic Development Corp. said Tuesday.

The Michigan Strategic Fund on Tuesday approved a $2 million performance-based grant for the project.

ArcelorMittal will move into a 317,000-square-foot building in an industrial park near I-94, north of General Motors Co.'s Detroit-Hamtramck assembly plant, the MEDC said. It will be ArcelorMittal's first Michigan manufacturing operation. The Detroit location will produce high-strength, laser-welded steel blanks for use in the automotive industry.

The grant will offset higher costs to locate in Detroit, compared to expanding an existing facility in Pioneer, Ohio, according to the MEDC. Opening a factory in Detroit will raise the cost of infrastructure improvements, on-the-job training and wages, the state said. It's not expected to generate revenue until its second year of operation, the MEDC said.

The city of Detroit is offering a property tax incentive.

"The state's consideration of a performance-based grant to support this endeavor is critical in advancing our business strategy as we further expand our footprint in Michigan," Ben Orler, operations vice president for ArcelorMittal Tailored Blanks, said in a statement.

ArcelorMittal was created in 2006 through the merger of Arcelor and Mittal Steel. Its customers include all major automakers and tier one suppliers.