* Furnace was producing 2,300 T of pig iron a day

* Up to 4,000 jobs at risk if Lucchini assets not sold

* India's Jindal Steel seen as potential bidder

By Maytaal Angel and Clara Denina

LONDON, April 23 (Reuters) - Lucchini, Italy's second-largest steelmaker, has begun idling its blast furnace in Piombino after investors looking to acquire the troubled group's assets expressed little interest in the costly facility.

Lucchini, formerly owned by Russia's Severstal CHMF.MM , was declared insolvent in 2012 and later placed under "special administration" - a procedure designed to save large companies and avoid heavy job losses.

The Piombino furnace in central Italy had been operating at 38 percent capacity this year, producing 2,300 tonne of pig iron a day. It is part of a complex that last year produced about 1 million tonnes steel - 4 percent of Italy's total output.

Up to 4,000 jobs could be at risk should attempts to sell the steelmaker's assets fail, prompting Pope Francis to call on Wednesday for those in power to use their "creativity" to resolve the problems.

"Workers are waiting for the bids to be presented on May 30, (but) we don't have any (reason) to say that a deal will be made. Too many companies have come and gone over the past two years," said Mirko Lami, of Italian union CGIL FIOM.

Lami said that India's Jindal Steel and Power JNSP.NS could potentially bid for Lucchini's assets, though it would look to build an electric arc furnace in Piombino and not restart the blast furnace.

Last month Duferco, the world's biggest steel trader, said it had decided not to bid for Piombino because it could not commit to maintaining full employment and keeping the blast furnace running. ID:nL6N0M82HX

"For the next month, the blast furnace will run just with coke. By May 30, when the due diligence process is complete, Lucchini will know if someone is interested in acquiring it," a source close to the company said.

Producing steel profitably has become difficult in Europe, where demand is down by about 27 percent since the 2008 financial crisis, with severe overcapacity and prices up only slightly from last year's 3-1/2 year lows .HRC-NED=SI .

The problem is particularly acute for Italy, Europe's second-largest steel producer, where the government is intent on protecting jobs in pig iron, steel and related industries that account for about 4 percent of GDP.

(Editing by David Goodman)

((maytaal.angel@thomsonreuters.com)(00442075429105))

Keywords: ITALY STEEL/