Wuhan Iron and Steel Corp said it is going ahead with a feasibility study for a proposed plant in Brazil despite major obstacles.

The statement was in response to a report saying that China's third largest steel maker dropped its plans in Brazil due to logistics and coking coal issues.

"There are some difficulties and risks that have slowed down our process," said spokesman Sun Jin.

Wuhan Iron and Steel plans to build a factory with a 5 million ton annual production capacity in Brazil with EBX Group. The facility, scheduled to start operations in 2012, would be the Chinese company's largest overseas plant.