Two investor groups vie to buy Italy's Ilva steel plant

ROME (Reuters) - Italy's Ilva steel group has received bids from two consortiums for its loss-making plant in southern Italy, it said on Monday, two years after the state took it over to save thousands of jobs and clean up the polluted site.

The first bid came from ArcelorMittal (ISPA.AS), the world's largest steelmaker, and Italy's Marcegaglia, a family-run group, who said they would invest 2.3 billion euros ($2.4 billion) and boost production at Europe's biggest steel plant by output capacity.

A consortium including India's JSW Steel (JSTL.NS) and Italian state holding company Cassa Depositi e Prestiti [CDP.UL] made a rival binding offer but provided no details of their plans for the site.

The government is expected to make a decision on the bids in about a month.

None of the parties involved revealed the size of the bids for the 15 sq km site near the city of Taranto.

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.

With two of its five furnaces closed, Ilva produced 5.8 million tonnes of steel last year, well below the 8 million tonnes it is authorised to produce. This was an increase of more than 1 million tonnes from 2015 and helped to reduce the plant's operating loss, which is still a hefty 220 million euros.

Italy wants a buyer that will restore profitability at a site that employs about 11,000 people in an economically depressed area. Last month the government arranged a temporary layoff scheme for up to 3,300 Ilva employees.

Intesa Sanpaolo (ISP.MI), Italy's biggest retail bank, signed the letter of intent presented by ArcelorMittal and Marcegaglia.

The consortium said it would boost output with low-carbon steelmaking technologies, ultimately up to 9.5 million tonnes of finished products. It also said it would invest an initial 10 million euros in a research and development centre.

"It has been sad to watch the decline of this great company in recent years and we are excited to have the chance to contribute to a new renaissance of this Italian steel icon," Marcegaglia's chairman and chief executive, Antonio Marcegaglia, said in a statement.

(Reporting by Steve Scherer and Isla Binnie; Additional reporting by Vincenzo Damiani in Bari; Editing by David Evans and David Goodman)