KIEV, July 14 - Ukraine’s privatization agency, the State Property Fund, announced on Monday it will seek to sue Arcelor Mittal for not fulfilling commitments undertaken after purchasing Ukrainian steelmaker Kryvorizhstal.

The SPF, which plans to reverse the privatization of Kryvorizhstal, has submitted a letter to the government asking 72.7 million hryvnias ($15 million) that it says it needs to conduct the lawsuit.

Arcelor Mittal and the government on Monday did not comment on the letter.

But analysts said the request for the money will probably be rejected as Prime Minister Yulia Tymoshenko has been at loggerheads with Valentyna Semeniuk, the head of the SPF, for the past six months.

Tymoshenko has persistently sought to replace Semeniuk, who is backed by Ukraine’s biggest opposition groups, over disagreements on the pace of privatization in Ukraine.

The lawsuit would probably also not be supported by President Viktor Yushchenko, who has previously praised the Kryvorizhstal privatization in 2005 as the showcase of Ukraine’s efforts to attract major foreign investors.

Semeniuk has previously accused Arcelor Mittal of failing to upgrade in 2006 and 2007 coking plants No. 3 and No. 4, and the desulfurization workshop, as part of the original commitments.

Semeniuk also said Arcelor Mittal failed to spend 0.5% of its total annual sales on social projects for the workers at Kryvorizhstal.

Arcelor Mittal Kryviy Rih, as Kryvorizhstal is now known, reported after tax profits at 3.8 billion hryvnias ($780 million) on sales of 18.8 billion hryvnias ($3.88 billion) in 2007.

Mittal Steel in October 2005 won an auction to buy Kryviy Rih-based Kryvorizhstal by agreeing to pay $4.8 billion for 93% stake in the Ukrainian steelmaker.

Arcelor Mittal Kryviy Rih last month announced it was experiencing disruptions in supplies of metallurgical limestone that have brought the company to the verge of suspending operations.

The production and sale of metallurgical limestone is currently divided up between the Metinvest group, Ukraine’s largest closely held metals and mining group, and the company Chelsy.

Arcelor Mittal Kryviy Rih reduced roll production tentatively 2.6% year-on-year to 2.33 million metric tons in January-April, according to the company.

Crude steel production fell 5.6% to 2.614 million tons, pig iron - 5.5% to 2.333 million tons and sinter - 7.2% to 3.787 million tons in the quarter.

The plant produced 589,000 tons of roll, 651,000 tons of steel, 577,000 tons of pig iron and 970,000 tons of sinter in April.

Coke production fell 0.9% in the four months to 1.018 million tons, including 281,000 tons in April. Iron ore concentrate production rose 6.3% to 2.923 million tons, including 735,000 tons in April. (tl/ez)