Prague  - Indian steel giant ArcelorMittal and the Czech state have settled their dispute over a minority stake in the group's steel mill in the north-eastern Czech Republic, the Czech Finance Ministry said Thursday.

The state agreed to sell to ArcelorMittal the remaining 1.36 million shares in the group's Czech steel mill for 5,000 koruny each, for a total of nearly 6.8 billion koruny (457 million dollars), while the global steel maker pledged to withdraw its legal claims against the state.

ArcelorMittal had demanded nearly 26 billion koruny (1.75 billion dollars) in compensation from the Czech Republic in two international arbitration proceedings.

The metallurgical group had sought 5.79 billion koruny for the disputed minority stake in the mill it bought from the state in 2003.

The Czech Republic agreed to transfer the shares under the privatization deal but the transaction had been blocked by the state's legal dispute with a Czech firm, which had made claims to the stake.

In another dispute, ArcelorMittal had sought a compensation of 20 billion koruny for being excluded from the privatization of the Vitkovice Steel manufacturer, currently Russian-owned Evraz Vitkovice Steel.

ArcelorMittal is the country's largest steel maker, which produced 3.06 million tons of steel in 2006 and has 7,450 employees. (dpa)