Tata Steel has lost the race for acquiring South Africa's Highveld & Vanadium to Russia's Evraz. Mittal Steel had pulled out of the race earlier.

Anglo American, the owner of Highveld that had put its 79 per cent stake on the block in October, today announced the decision to sell Highveld to Evraz for $687 million.

Evraz and investment bank Credit Suisse have purchased 24.9 per cent each from Anglo American. Highveld produced 684,000 tonnes of rolled steel last year.

It was not clear whether Tata Steel, which had announced its interest in Highveld, finally put in financial bids. Merchant banking sources said the steel company had put in a conditional bid for acquiring only its steel business. Tata Steel executives did not comment on the developments.

Sources close to Bombay House, the headquarters of the Tata group, said it did not find merit in bidding aggressively for a company, which had a low steel production capacity.

"Forty per cent of Highveld's revenue comes from the steel business, while the balance is generated from vanadium and ferro-alloys," they added.

In the last two years, Tata Steel has acquired NatSteel of Singapore, and Thailand-based Millennium Steel Ltd. It has also acquired a stake in a coal property in Australia.