The battle over the future of steel plant Kremikovtzi saw the mass resignation of its management, continuing protests by workers demanding overdue salaries, and one of the leading bidders for the plant flying in from the Ukraine for an urgent meeting with Prime Minister Sergei Stanishev.
After the January 30 hour-long meeting with Stanishev, which was also attended by Foreign Minister Ivailo Kalfin, Ukrainian billionaire Konstyatyn Zhevago declined to speak to waiting journalists, saying that he would issue a statement later.
According to a statement on the Government website, Zhevago briefed Stanishev on talks he had with the current majority owner of Kremikovtzi, Pramod Mittal.
Mittal bought the steel mill in August 2005 from the previous proprietor Finmetals Holding. Brothers Pramod and Vinod Mittal control Global Steel Holdings, which then officially purchased a 71 per cent stake in Kremikovtzi for $150 million. The remaining part is divided by the state, holding a 25 per cent share, and individual shareholders.
Kremikovtzi executive director Alexander Tomov said on January 30 that there were three possible buyers: Zhevago’s company, US firm Pittsburgh-based US Steel and another Ukrainian firm, Met Invest. Tomov said only Zhivago had made a detailed offer, as well as written guarantee for investments in the steel mill, amounting to 80 million leva a month. Tomov said that Kremikovtzi shares had risen by about 20 per cent after Zhevago’s proposal.
On January 29, US Steel representatives visited Kremikovtzi but did not give a concrete investment proposal. However, after the meeting with Zhevago, Stanishev said that he hoped to have a further meeting with US Steel. According to Bulgarian media reports, US ambassador John Beyrle had lobbied the Government to look at the US Steel interest in the plant.
As previously reported by The Sofia Echo, on January 22 Kremikovtzi press office rejected January 15 media reports quoting Tomov as saying the plant would be sold.
However, Tomov’s story changed. After a meeting with Finance Minister Plamen Oresharski, Tomov said the Kremikovtzi sale deal delay was bad for the factory, Focus news agency reported on January 30.
“According to me, the Finance Ministry, the Government, the trade unions and the management are of the common opinion that the steel mill should have a new investor. However, everything is in the hands of owner Mittal,” Tomov said. He said that a sale deal draft contract had been ready at about 3.30am on January 30, but it depended on the current majority owner to sign the agreement.
Meanwhile, about 600 Kremikovtzi workers went on strike because of overdue salaries. They demanded to receive the money they earned since December 2007. The steel mill started giving the salaries on January 29, Focus said.
However, on January 30 about 3000 workers blocked the factory and would not let Mittal leave the building, the press office of Confederation of Independent Trade Unions in Bulgaria (CITUB) said. CITUB said that this had been done because Mittal had said he would not sell the still mill.
“At the same time Mittal would not do anything to stabilise Kremikovtzi and allow its work to proceed,” CITUB said.
Around this time, all the directors of the plant resigned. After about an hour, the protesting workers lifted their blockade.
The heat around the Kremikovtzi deal became incandescent when the Bulgarian Socialist Party (BSP) accused Sofia mayor Boiko Borissov, informal leader of the Citizens for the European Development of Bulgaria (abbreviated as GERB in Bulgarian) of having a financial interest in the Kremikovtzi plant being closed.
“Behind Sofia city’s actions stand not so much concern about people’s health and the environment, but economic interests,” Stanishev said.
Economy and Energy Minister Petar Dimitrov, also of the BSP, said that intended property speculation was behind the campaign to close Kremikovtzi.
GERB chairman Tsvetan Tsvetanov rejected the BSP allegations. He said that closing Kremikovtzi would serve the interests of citizens. Borissov said that closing the plant was not an end in itself.
In 2007 Borissov sent a letter to the European Commission to complain about pollution from the factory. On January 30, a media statement by environmental movement Ecoglasnost said that Borissov’s letter had said the pollution exceeded “only two to five times” the limit-allowed concentration (LAC). The pollution caused by Kremikovtzi was between 10 and 30 times more than the LAC according to General Labour Inspectorate and Sofia Regional Inspectorate on Environment and Waters, while admissible dust concentrations were exceeded 150 times.
