Venezuela's government expects Sidor, the country's largest steel mill, will agree to sell steel to local businesses before offering it to international clients, making a possible government purchase of the company unlikely, an official said Monday.

Last week, President Hugo Chávez said his administration would consider buying out Sidor unless it begins to offer steel at low rates to the local businesses before making it available on international markets.

Mining Minister Victor Alvarez said he was confident Sidor representatives would sign the proposed deal within a week.

''We should be signing the contract with Sidor within a week,'' said Alvarez.

The government would only consider buying out Sidor, which was privatized in 1997, if the steel maker refuses to cooperate with policies aimed at reducing the exportation of raw material while boosting domestic production of finished goods, Alvarez said at a press conference.

Sidor, which expects to produce 4 million tons (3.6 million metric tons) of steel in 2005, exports to dozens of countries, including the United States, Mexico, China and Colombia. The company is jointly owned by Mexico's Hylsamex S.A., Argentina's Siderar S.A., Venezuela's Sivensa and Brazil's Usiminas.