A nonlinear observer, with the feedback gain weighted by the sensitivity of the output with respect to the state, is developed for systems with nonlinear output map.. The observer can be obtained from the extended Kalman filter by a special choice of time-varying weighting matrices. It is shown that the estimation error dynamics are asymptotically stable and a region of attraction is derived. The observer is applied to the top blown converter process for estimating the content of impurities in the liquid metal. Using plant data from the converter at SSAB Oxelosund AB, the observer is shown to provide accurate estimates of the carbon content. (C) 2003 Elsevier Science Ltd. All rights reserved.