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. Last Updated: 07/27/2016

Severstal in Bidding for Brazil Firm

HONG KONG -- Severstal, India's Essar, China's Shagang Group and a Japanese consortium are among the groups that are in the second round of bidding for Brazilian steelmaker CSN's iron ore unit, according to sources close to the matter, in what could be a $10 billion deal.

CSN hired Goldman Sachs earlier this year to sell some or all of its Namisa subsidiary, taking advantage of raging demand for iron ore.

One source said Goldman had put a $10 billion price tag on the asset, the top end of analysts' range of values, although several investment bankers mentioned a value of $7 billion to $8 billion.

The feverish interest in Namisa reflects a white-hot market for iron ore. As miners race to supply China's steel boom, global steelmakers are desperate to secure their own supplies.

Indian rivals Tata Steel, JSW and ArcelorMittal have all pursued bids, sources said, though it was unclear which, if any, were still in the process.

The Japanese consortium is led by a trading house and includes domestic steelmakers. Two sources confirmed that a Japanese group was bidding, but did not identify the companies.

Two separate Chinese consortia are also bidding. One is a steel consortium including state-run Baosteel Group and Shougang Group, the other is top private steelmaker Shagang Group.

The second round of bids is expected in the next few weeks, although sources described a somewhat fluid process.