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Bulgaria troubled steel mill Remains without permit

Date: 15.10.2008

The troubled steel mill Kremikovtzi is not going to receive its complex environmental permit by the deadline because the mill is still not complacent with ecological requirements, according to the Bulgarian Deputy Environmental Minister Chavdar Georgiev.

The Deputy Minister stated Wednesday that the biggest difficulty before Kremikovtzi has been the unspecified legal entity supposed to lead the negotiations with the mill. He declined to determine the exact extension to be granted to the mill to obtain the permit. The deadline is October 23, 2008.

Georgiev further said that the goal of his Ministry was not to closeKremikovtzi, but to assist in realizing the mill's ecological program, adding that the fact that the permit was not going to be issued was not the Ministry's fault.

The Bulgarian Environmental Minister Dzhevded Chakarov also spoke Wednesday and stated that the complex permit was extremely important to the steel mill and the distribution of quota for the greenhouse gases, but was adamant that Kremikovtzi was not going to receive the permit until the mill complies with all ecological requirements. The minister did, however, promise that the Environmental Ministry would negotiate with the European Commission (EC) to avoid imposing sanctions on the country.

In the meantime, the mill workers declared that they were preparing new protests for next Tuesday. The reason is the failed contract with the Ukrainian company Vorskla Steel for work with raw materials supplied by it.

The Trade Unions at the mill have stated that the government had one week to schedule a meeting between the mill management and the unions to discuss ways to solve the crisis at Kremikovtzi. The Unions are requesting an emergency meeting with Bulgarian Prime Minister Sergey Stanishev and Environmental Minister Dzhevded Chakarov.

The Unions further insist that the contract with Vorskla Steel becomes annulled due to the lack of promised investments and salaries, which have not been paid since August

The Chair of the Steel Workers Federation Vasil Yanachkov, said that the Ukrainian company has not provided the EUR 180 M supposed to lead to the normal functioning of the mill. According to Yanachkov, it was the Cabinet's fault that they have turned down the bigger and better investor ArcelorMittal, who could obtain the complex permit.

The Unions further promised that they would not allow any repressions of workers at the mill due to warnings that some of them might be fired.

During the summer of 2008, ArcelorMittal of the Indian tycoon Lakshmi Mittal, and Vorskla Steel of the Ukrainian billionaire Konstantin Zhevago competed for months with offers to purchase the steel mill. The previous contract with ArcelorMittal was renounced after workers' protests and the Podkrepa trade union at the mill voiced their firm support for Vorskla Steel.

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