JSW steel raises bid for Italy's troubled Ilva steel plant

ROME (Reuters) - A consortium led by JSW Steel raised its bid for Italy's troubled Ilva steel plant, a statement said on Saturday, in a challenge to a group that was declared the winner of the tender process last month, but whose offer faces labour union opposition.

JSW, leading a consortium called AcciaItalia, said it would put up 1.85 billion euros ($2.09 billion), which is broadly in line with the winning bid, and added it would "immediately" hire 9,800 employees. It had originally offered about 1.2 billion euros.

"The decision (to make a counter offer) is in the interest of Ilva, of its employees, of the supply chain, the territory of the factory and the national machine industry," the statement said.

The Industry Ministry said on Friday that it could not accept a counter offer, according to procedure, if the only thing changed was the purchase price. The government has been vetting the winning bid and is supposed to decide by Monday whether to officially endorse it.

Metal workers' unions said on Saturday that they would send a letter to Prime Minister Paolo Gentiloni and Industry Minister Carlo Calenda asking for an urgent meeting.

In a statement, Rocco Palombella of the Uilm metal workers' union said it was "necessary to reflect... on the counter offer by AcciaItalia".

The bid that last month won the tender offer was made by a consortium called Ama Investco Italy that is led by ArcelorMittal, the world's biggest steelmaker. It foresees some 4,800 job cuts, though the workers would receive state unemployment support until 2023.

Ilva directly employs about 11,000 people in an economically depressed area of southern Italy. Some 3,300 employees are now in a state-funded temporary layoff scheme. It was unclear if AcciaItalia's counter offer would preserve more jobs.

A spokeswoman at the Industry Minister was not immediately available to comment.

AcciaItalia said that its newest bid excluded two of the previous members of its consortium, Arvedi and Cassa Depositi e Prestiti, and was made exclusively by JSW and Delfin.

Ilva was placed under court administration in 2013 after magistrates seized 8.1 billion euros of assets belonging to its former owners, the Riva family, amid allegations that toxic emissions were causing abnormally high rates of cancer.

The government took over administration of the business in 2015 to try to save jobs and clean up its polluting furnaces.

($1 = 0.8867 euros)

(Reporting by Steve Scherer; Editing by Andrew Bolton)