Hehe, I do love a good steam punk fantasy. And I figured that magic might have something to do with elves, so hopefully this works alongside them...
A race called Lindals, based on giants, whom live in clans. Reclusive in general, they are inherently spiritual beings and are known for their relationship with nature. Their magics are drawn from the elements, earth and rock and plant and even magma. They have ancient traditions, ceremonies and beliefs, but they are not the stiff, unyielding behemoths some legends draw them up to be. Their ingenuity and creativity can be seen in their workmanship (their homes are one with their environments), their craft and their problem solving. They are larger than humans, (pure-blooded Lindals can be up to 9ft tall if male), but because of their hardworking, generous nature, they can be entreated to assist outside of their homelands. Stonework, construction, earthwork, crops, so on. They are incredibly strong, carry traits of their clans unique to themselves (tree-dwelling clans versus cliff-dwelling clans, et cetera); Lindals are magical, but practical in their use of it. No potion brewing, spell casting from these folk, for the most part. xD It's rare, but half-breed Lindals exist, although they generally prefer not to leave their clans for too long.