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Russian steel maker Mechel has got its eye on Oriel Resources (ORI:AIM), a London-listed chrome and nickel specialist. It confirmed on Monday that talks were underway over a potential takeover offer.

Oriel is both a miner and a processing company and is building itself up to become a key supplier to the stainless steel industry. Production began in 2007 at its Tikhvin ferrochrome smelter in Russia. Its Voskhod chrome project should come online in the third quarter of this year.

A third interest, the Shevchenko nickel project, should start plant construction in the second quarter, with production starting in the second half of 2009.

The business is 25.6% owned by non-exec director, Alexander Nesis. The shares in Oriel did not move on Mechel’s confirmation of a potential bid, staying firm at 96.75p.

The natural resources sector continues to be at the centre of M&A activity. Expro International (EXR), which provides services to the oil industry, has received a preliminary proposal, thought to be from private equity group Candover Investments. A bid, once made, is expected to be priced around £14.10 per share. Analysts believes management may hold out for a minimum of £15 per share. As Shares went to press, Expro was trading at £12.26.

Xstrata (XTA) is still in play despite reports that Brazilian iron ore giant Vale may not proceed with a potential £45 per share bid. The company said on Monday that talks continue.

Outside of the London market, Australian metals group Oxiana struck a £2.8 billion deal to buy Zinifex, forming the world’s second largest zinc producer.

Midwest Corporation, which is developing iron and steel feedstock projects, continues to fight off predators. Last month it rejected a £560 million proposal from Chinese iron ore trader Sinosteel as it undervalued the business. Murchison Metals has already failed in its attempt to buy Midwest, recently scrapping its £425 million bid due to low acceptances.