For the second time I'll assume it's a question. Are you referring to the magickal steel you can find in some DWARVEN stores?.
You can buy mithril from the Wheel Clan smith. You can also steal a sheet of mithril from the Junk Dealer in Dernholm and somewhere else (from the blaksmith in Black Root I think). In both cases loot the small chests, not those with goods for trade.
Re: mithril question There are two uses I know of. There is an elven trader named Ellemyn in Quintarra who will give you his über-fast elven longbow if you give him a sheet of it. That, and you can find a custom gunsmithy schematic that uses it (Bronwycks Gun, a pretty cool weapon).
Re: mithril question Making a key that opens the chest in the Zoological society (which eventually leads you to the Iron Clan) also requires mithril.
