Lenders for Essar Steel India Ltd., the biggest steel mill on the block under India\u2019s new bankruptcy law, have selected ArcelorMittal as the preferred bidder for the asset, bringing the world\u2019s largest steel maker a step closer to gaining a foothold in India\u2019s growing market for the alloy. Arcelor, controlled by billionaire Lakshmi Mittal, will now begin final negotiations with creditors, the Luxembourg-based producer said in a statement. The move by lenders comes after Arcelor on Wednesday agreed to clear about 74.69 billion rupees ($1 billion) in outstanding dues of two of its group companies to become eligible to bid for Essar. The battle for the 10-million-metric-tons-a-year steel asset has been one of the most hotly contested under the nation\u2019s insolvency resolution process. Essar Steel \u201crepresents a unique and compelling opportunity\u201d for Arcelor to establish a significant footprint in a fast growing market that\u2019s poised to become the second-biggest producer of the alloy, Arcelor had said in another statement earlier this week. India\u2019s Supreme Court had given Arcelor and a rival bidder Numetal Ltd. a deadline of two weeks that expired Thursday to pay off dues in group companies. VTB Capital-led Numetal had failed to pay their dues by the deadline, paving the way for Arcelor to be declared as the preferred bidder. ArcelorMittal and Numetal had both offered to pay 420 billion rupees for the mill. India\u2019s Supreme Court had given Essar\u2019s lenders eight weeks to choose the best bid once the dues are cleared. Billionaire Anil Agarwal\u2019s Vedanta Ltd. And JSW Steel Ltd. had also expressed interest to buy the mill.\u00a0However, legal challenges by other bidders such as Russia\u2019s VTB Capital could pose risks to any potential deal.