ArcelorMittal, the world's largest steelmaker, wants to acquire a majority stake in a Chinese steelmaker but will probably have to wait at least five years, Chief Executive Officer Lakshmi Mittal said on Tuesday.

China will want to complete the consolidation of its steel industry before it considers allowing foreign investors to acquire control of a strategic sector, he told reporters at a steel conference.

I do not see that in a year or so, the Chinese government will change their strategy where they do not want foreign companies to have a majority control, he said.

In an earlier address to the American Metal Market's Steel Strategies Success conference, Mittal said mergers such as that of Arcelor and Mittal Steel had improved efficiency and growth prospects in the industry at a time of soaring global demand.

We now need to see this regional consolidation replicated in China, he said.

The Chinese steel industry continues to constitute hundreds of small, inefficient producers.

This is not a sustainable model and I hope we will continue to see more progress in the coming years towards a more consolidated local market, he said.

Mittal, who has made no secret of his desire to expand into China, expanded on the subject in a later press briefing.

I still believe the Chinese government is focused more on regional consolidation; they want to consolidate China's steel industry first, he said.

I would not be surprised 2010 or 2012 we will see one Chinese company producing 80 million tonnes (a year) and more companies in the range of 50 million to 60 million, he said. ArcelorMittal produces more than 116 million tonnes.

Once that (Chinese) consolidation is done, perhaps at some point, in five to seven years times, we will see the Chinese government looking for global consolidation and maybe at that time we could be the first foreign company, Mittal said.

He noted that his Europe-based company already had a presence in China.

ArcelorMittal owns one-third of mid-sized Chinese steelmaker Valin Steel Tube & Wire Co and has a stake in Hong Kong-listed China Oriental Group Co.

But last year, a plan by ArcelorMittal to buy into Laiwu Steel Co fell apart.

ArcelorMittal said the parent group of Laiwu, one of China's 10 biggest steelmakers, decided not to extend an agreement to sell a 38.41 percent stake to the global steel giant.

(Reporting by Steve James; editing by Carol Bishopric and Ted Kerr)

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