Lakshmi Mittal is “optimistic” that Beijing will eventually approve a plan to allow him to take a majority stake in a China-based steel supplier.

The comments by the Indian steel billionaire, chief executive and main owner of Arcelor Mittal, the world’s biggest steel company, are the strongest sign yet of his wish to become a big force in what is by far the world’s biggest steel-consuming country.

Mr Mittal, who stressed his desire to be a “long-term player” in the Chinese steel industry, has been talking to Beijing government officials for some time about a project based around uniting minority stakes that Arcelor Mittal is poised to take in two Chinese steel makers – Hunan Valin and Laiwu – and then taking a majority control of the business.

It is thought that Mr Mittal has his sights on controlling about 50m tonnes of steel output in China within about five years – a goal that, if attained, would make his company almost certainly one of the largest steel suppliers in China.

“We would like to be long-term player in China and an actor in this consolidation [in the Chinese steel industry],” Mr Mittal told the FT. “I am optimistic that eventually we will be permitted to play a part but [getting government approval for consolidation] is a prolonged process and you have to be patient. We have to be able to demonstrate that we can bring value to the Chinese producers.”

The Indian entrepreneur is aware that foreign ownership of companies is acutely sensitive to the Chinese leadership, which regards steel as a strategic industry and up to now has been unwilling to countenance non-Chinese interests taking more than a minority stake in steel producers.

But he is hoping he can demonstrate that Arcelor Mittal can bring new technologies and management methods to the country.

According to the International Iron and Steel Institute, a Brussels-based trade body for the steel industry, China will continue for at least the next two years as the world’s strongest expanding steel market. Demand for the material in China will increase 13 per cent in 2007, followed by 10 per cent in 2008, taking demand next year to 443m tonnes, 35 per cent of the projected world total, according to the institute.

In other comments, Mr Mittal conveyed an upbeat view of the prospects for the steel industry for this year, saying steel prices would remain “stable”.

For a transcript of Mr Mittal’s comments, go to: www.ft.com/steel

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