INTERVIEW-Bulgaria says Kremikovtzi should stop pollution

By Tsvetelia Ilieva

SOFIA, Aug 27 (Reuters) - Bulgaria wants a strategic investor to bring insolvent steelmaker Kremikovtzi KMKV.BB to life but not at the expense of it continuing to harm the environment, the economy minister said on Wednesday.

Petar Dimitrov told Reuters in an interview that the most important condition for a revival of Bulgaria's biggest steelmaker was to stop pollution and meet European Union environmental requirement by the end of October.

"If there are no changes in the environmental situation at the plant by the end of October, the mill will not get an operational permit," Dimitrov said. "We cannot poison Bulgarians...in the name of economic benefits".

Kremikovtzi, Bulgaria's industrial glory under communism, regularly pollutes Sofia and the capital's mayor and environmentalists want it closed.

Shutting down the plant is a politically sensitive issue a year before general elections as it employs 8,000 people and provides incomes to another 90,000. The state holds 25 percent of the mill controlled by Indian businessmen Pramod Mittal.

The world's largest steel producer, ArcelorMittal (ISPA.AS: Quote, Profile, Research) (MTP.PA: Quote, Profile, Research), and Ukrainian tycoon Konstyantin Zhevago are competing to take over the plant.

Dimitrov said Zhevago's Bulgarian arm, which currently has a production agreement with Kremikovtzi, has pledged to carry out urgent environmental upgrades by the end of October.

A Sofia court ruled earlier this month that Kremikovtzi has been insolvent since 2005 as its debt ballooned to 1.7 billion levs ($1.28 billion).