Talks on the Thamesteel site in Sheerness have been taking place for "many months", said Gordon Henderson MP for Sittingbourne and Sheppey.
He said the new plans for the plant could see the creation of up to 120 jobs.
The new plant would be a rolling mill and would not produce any steel.
Mr Henderson said: "We have some fantastic steel workers remaining on Sheppey, and the company involved knows that there is a strong workforce available to them.
"The negotiations are taking place and if they are successful they will not result in an opening of the steel mill itself," he said.
"Steel will not be produced on Sheppey. This is all about reopening the rolling mill which would entail importing steel billets, rolling them and then shipping them back out again.
"It will still involve creating 100 to 120 jobs which are jobs which we desperately need."
Thamesteel was first bought by the Al-Tuwairqi Group (ATG) in 2002 when its previous owners went into liquidation.
ATG bought back the plant in June 2012, six months after it closed.
An agreement to partly reopen a Kent steel works which closed in 2012 with the loss of more than 350 jobs, could be signed by the end of October.