Steel baron Lakshmi Mittal is on the takeover trail once again, targeting a steel mill in Bosnia, but he is facing a challenge uncomfortably close to home -- his own family.

Ispat India, controlled by Lakshmi Mittal's brothers and father, is the only other contender for state-owned BH Steel, the largest steelmaker in Bosnia, which went on the block a few months ago.

The two wings of the family clashed six months ago over a steel company in the Philippines, which was finally snapped up by Ispat India after the LNM Group pulled out of the bidding war.

BH Steel, which has been hit by the conflict in the region and its aftermath, currently makes about 200,000 tonnes of steel annually but can produce up to around 2 million tonnes a year.

Last week the LNM Group also became the frontrunner to buy Huta Czestochowa, a large Polish steel mill with an annual capacity of around 1.2 million tonnes. It has just signed a deal with the Polish government for exclusive negotiating rights.

If the LNM Group clinches the Bosnian deal it will add muscle to its unrivalled position in eastern and central Europe where it already controls steel companies in Khazakhstan, Romania, the Czech Republic and Poland.

Clinching the Bosnian deal will also bring the LNM Group closer to becoming the world's top steelmaker. It currently makes about 42 million tonnes of steel annually compared to global leader Arcelor, which makes 46 million tonnes.

The LNM Group has also put in a bid for iron ore and limestone mines in Bosnia as a part of the deal. Says an LNM Group spokesman: "Our overall objective would be to re-establish the metallurgical complex of Cenica, consisting of the iron ore mines at Ljublja, the lime stone quarries at Doboi and the steel plant at Cenica (BH Steel)."

Spurred by the worldwide steel boom, Ispat Industries, which struggled through a sea of debt in the '90s, has suddenly developed global ambitions. It has also recently struck a deal to run a 2 million tonne steel plant in Libya.

Ispat Industries is run by Lakshmi Mittal's two brothers Pramod K Mittal and Vinod K Mittal. Lakshmi Mittal was sent abroad by his father Mohan Lal Mittal in 1975 to run the family-run plant in Indonesia.

He split from the family in the early '90s soon after taking over a steel plant in Trinidad & Tobago.

However, steel industry analysts report that the India-based Ispat group is now on the prowl for more acquisitions in eastern Europe and this could bring them into conflict with the LNM Group once again.

The LNM Group is already the largest steelmaker in eastern and central Europe, with a capacity to turn out around 14 million tonnes a year. Its deal to buy Polskie Huty Sthali, Poland's largest steelmaker, is expected to be formally completed on March 5.