* Sale is part of Serbian privatisation programme
* European steel sector suffers from over-capacity (Adds comments from Serbian prime minister, background)
By Ivana Sekularac
BELGRADE, April 1 (Reuters) - China's Hebei Iron & Steel Group has submitted the only bid for a loss-making Serbian steel mill that the government put up for sale, a government official said on Friday.
Serbia set a March 30 deadline for bids to sell the Zelezara Smederevo plant, part of its efforts to offload unprofitable state firms in accordance with its 1.2 billion euro loan deal with the International Monetary Fund.
"The privatisation commission met today at 12 p.m. (1000 GMT) and concluded there was only one bid. On Tuesday we will officially unveil the bid and have more details about it," the official, who declined to be named, told Reuters.
Hebei is bidding for the Serbian plant at a time of chronic overcapacity in the steel industry, partly caused by a glut of Chinese steel.
Britain is battling to save its steel industry after India's Tata Steel put its British operations up for sale, putting thousands of jobs at risk.
Serbia set a minimum price of 45.69 million euros ($51 million) for the plant, which employs 5,000 workers and produced 875,000 tonnes of steel in 2015.
A Hebei spokesman could not immediately be reached for comment.
Any deal would need the approval of the European Commission, as Belgrade is under pressure to stop subsidising loss-making firms as it seeks to wrap up EU membership talks by 2019.
Serbian Prime Minister Aleksandar Vucic, who said last October that Hebei was considering investing at least 300 million euros in expanding the plant, said on Friday that a deal to sell the plant had not yet been finalised.
"If we manage to do it, that would be very important not only for 5,000 employees in Zelezara, but also for some 10,000 people who work in the supply chain," he told a news conference.
Hebei province, where Hebei Iron & Steel is based, produces a quarter of China's steel but its mills are struggling with a huge price-sapping capacity surplus.
The province has repeatedly urged its steel firms to shut down capacity at home and replace it with projects overseas, and this week offered more credit and policy support to steel enterprises looking to build or acquire plants overseas.
The EU has imposed anti-dumping duties on some types of Chinese steel.
Hebei Iron & Steel Group plans to build a 5 million tonne per annum project in South Africa.
The Serbian plant, which the government bought back from U.S Steel in 2012 for $1 to avert closure, posted a net loss of $113 million in 2015.
(Reporting by Ivana Sekularac, additional reporting by David Stanway in Beijing; editing by Adrian Croft and David Evans)