Essar Steel [Get Quote] has emerged as one of the potential suitors for the Sparrows Point, Md., mill of ArcelorMittal SA, with leading Russian steelmakers, according to a report.

"The most prominent suitors continue to be Russian producers, although India's Essar Group also has been mentioned prominently, according to market sources," the Metal Bulletin (MB) reported, adding that Essar has been the most recent company to express interest and has begun negotiations with Luxembourg-based ArcelorMittal.

JSC Severstal, Evraz Group SA and OJSC Novolipetsk Steel are all considered in the running for the plant, which the US Justice Department ordered ArcelorMittal to divest as part of anti-trust concerns related to tinplate production in the eastern United States.

"Essar has been in, and so have Severstal and Evraz," one industry source with knowledge of the situation said. "They all want it for the same reason: They see this market as a good one," MB said.

A Essar Steel spokesman told PTI that the company was open to good investment opportunities, but would not like to comment on any specific proposal.

Essar already owns Algoma Steel Inc., Sault Ste. Marie, Ontario, and the Minnesota Steel Industries LLC operations that are set to begin construction this Spring on the Minnesota Iron Range. 

ArcelorMittal had earlier signed an agreement to sell the mill to the Esmark-led consortium, but the deal fell through when the company couldn't pull a financing package together.

It put the mill back on the market, with various potential buyers looking into a purchase, it said.

The Justice Department in August 2006 moved to block the merger of Arcelor SA and Mittal Steel Co. NV based on the contention that it would reduce competition for tin mill products in the eastern United States. Mittal was ordered to sell the Sparrows Point plant to allow its merger with Arcelor to gain Justice Department approval, the bulletin added.