Slovakia close to deal with U.S. Steel: PM Fico

(KOSICE) - Slovakia's Prime Minister Robert Fico said Monday he was close to a deal with U.S. Steel that would see this eurozone country's largest single employer keep its mill in the eastern industrial hub of Kosice.

"The Slovak government and representatives of U.S. Steel are very close to a deal on the extension of the company's activities in Kosice," he said in a statement following talks at U.S. Steel's headquarters in Pittsburgh.

"We're on a good path to concluding the negotiations later this week," Fico added, without disclosing details.

U.S. Steel Kosice admitted late last year it was considering several buyers for its huge mill which provides more than 11,000 direct, and thousands of other indirect jobs in Slovakia, an ex-communist state of 5.4 million.

While the company has kept mum about its reasons for a possible exit, the outspoken Fico hinted strict EU environmental rules, high commodity prices and the end of a 10-year tax holiday were to blame.

With Slovak joblessness spiking to an eight-year high near 15 percent, ardent leftist Fico has been scrambling to woo U.S. Steel with energy incentives to offset the $500 million (388 million euros) it needs to invest into green technologies by 2016 to comply with EU rules.

As meltdown menaces Europe's steel sector, demand for steel remains healthy in Slovakia, home to three major car plants run by giants Volkswagen, PSA Peugeot Citroen and Kia.

Opened in the 1960s, the communist state-owned giant Eastern Slovakia Steel Works (VSZ) was sold in 2000, a decade after the regime collapsed.