High River Gold Mines Ltd HRIVF

Severstal MERGER POSSIBLE

[1marketmaker]

(Reuters) - Evraz (EVRE.L) has raised the possibility of a merger with Severstal (CHMF.MM) in a deal that would unite Russia's two biggest steelmakers to create the world's eighth-largest producer by output, the Financial Times reported on Tuesday.

Alexander Abramov, Evraz's chairman and founder, said in an interview with the newspaper that uniting the two businesses, with a combined market capitalization of 12 billion pounds ($18.7 billion), would be a "good idea."

"I guess that this <the idea of an Evraz/Severstal combination> would have several advantages," Abramov is quoted as saying in the article.

Evraz's main business is in construction and steel pipes for oil and gas, while Severstal has a stronger focus on flat steel sold to the white goods and car sectors.

Evraz and Severstal could not be reached for immediate comment.

(Reporting by Stephen Mangan; editing by Carol Bishopric)