(Bloomberg) -- Cleveland-Cliffs Inc. is in talks to acquire the US Midwest assets of Russia’s largest steelmaker Novolipetsk Steel PJSC, according to people familiar with the matter.

New York-listed Cliffs has expressed interest in a potential deal to NLMK, as the steelmaker is also known, the people said, asking not to be identified because the matter is private. Some of the people said that Cliffs has signed a non-disclosure agreement.The assets, which consists of steel-mill facilities in Indiana and Pennsylvania, could be valued at more than $500 million in a potential sale, they added.

If negotiations are successful, it would mark Cliffs’ first move in dealmaking since its failed attempt to buy United States Steel Corp., which announced a $14.1 billion takeover by Japan’s Nippon Steel Corp. last December. 

Discussions between Cliffs and NLMK could still be delayed or even fall apart, the people said. A representative for NLMK, based in Lipetsk, Russia, declined to comment, while a representative for Cliffs declined to comment.

Cliffs, under Chief Executive Officer Lourenco Goncalves, has shown an appetite to do deals even before it became a bidder for US Steel. It bought AK Steel Holding Corp. as well as the US assets of ArcelorMittal SA in 2020.

Goncalves has been critical about Nippon Steel’s takeover bid for US Steel and has expressed interest in doing another deal for his American rival if US authorities block the Nippon Steel transaction. Cliffs has the support of the influential United Steelworkers union, which also opposes the Japanese steelmaker’s acquisition. President Joe Biden has said US Steel should remain American owned.

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NLMK’s Pennsylvania plant is the company’s largest US facility. The operation, which dates back to 1899, produces hot rolled and cold rolled coils as well as galvanized products. NLMK became involved with the plant in 2007 as part of a joint venture with Duferco Group before taking over full ownership in 2011, according to its website. In that same year, NLMK signed a labor agreement with the United Steelworkers for the facility.

NLMK’s Indiana site, on Lake Michigan, converts slabs into coils in its mill, according to its website. The facility is a prime supplier of hot rolled and hot rolled pickle and oil products, servicing major markets including pipe and tube, energy, agriculture, construction and automotive.

While many Russian political figures and entrepreneurs are subject to sanctions after President Vladimir Putin ordered troops into Ukraine in 2022, neither NLMK nor its billionaire owner Vladimir Lisin are sanctioned by the US, the UK or the European Union. Lisin has a net worth of about $29.3 billion, according to Bloomberg’s Billionaire index.

Shares of Cliffs have risen about 19% in the past year, giving it a market value of about $8 billion. NLMK shares traded at 218.30 rubles as of 4:22 p.m. in Moscow on Tuesday, valuing the company at about 1.32 trillion rubles ($14.7 billion).

--With assistance from Yuliya Fedorinova.

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