The ArcelorMittal steelworks, ex-Ilva, on November 8, 2019 in Taranto, Italy (AFP/Archives/ANDREAS SOLARO)
The government of Giorgia Meloni on Monday rushed to the aid of the giant ex-Ilva steelworks, in great financial difficulty and owned by ArcelorMittal, by placing it under the supervision of the Italian state to safeguard its thousands of jobs and restart its production.
After months of unsuccessful negotiations with ArcelorMittal, its main shareholder, the government announced the decision during meetings in Rome with company leaders in the supply chain of the steelworks located in Taranto (south) and unions.
On the verge of financial asphyxiation and crumbling under a debt of 3.1 billion euros, the former Ilva, one of the largest steelworks in Europe, is no longer able to pay a large part of its suppliers nor to pay their gas and electricity bills.
“In the coming days”, the government intends to appoint commissioners who will take control of the ex-Ilva, “personalities with specific skills in the steel sector”, according to a press release.
The public investment company Invitalia asked the Ministry of Enterprise on Sunday evening to initiate the procedure after ArcelorMittal’s “refusal” to inject new money.
The steel giant said on Monday that it was “surprised and disappointed” by this initiative, which it said was not communicated to the board of directors of the manager of the steelworks Acciaierie d’Italia which was held on day before.
“This is a flagrant violation of the investment agreement” concluded with Rome, assures ArcelorMittal in an email addressed to Invitalia, in which it indicates “reserves all rights”.
Acciaierie d’Italia is currently 62% controlled by ArcelorMittal and 38% by the Italian State.
The government of Giorgia Meloni and ArcelorMittal accuse each other of not having respected their commitments and of being responsible for the failure of the negotiations.
As long as ArcelorMittal “does not intend to invest in the company, I believe it is right that the country reappropriates the fruit of its work and the sacrifice of entire generations”, declared on Sunday Business Minister Adolfo Urso.
– Candidates in the running –
The objective stated by the government is to allow the continuation of the activity of the steelworks, considered strategic for the country, and to revive the Italian steel industry.
The ArcelorMittal steelworks, ex-Ilva, on November 8, 2019 in Taranto, Italy (AFP/Archives/Andreas SOLARO)
Under the so-called “extraordinary administration” regime, the government appoints commissioners responsible for preparing a rescue plan while awaiting the arrival of a new investor.
Among the candidates, according to the Italian press, are the Ukrainian steel group Metinvest, which has been looking for new production sites since the Russian army took control of its giant Azovstal steelworks in Mariupol (south-east) in May 2022.
Also in the running to replace ArcelorMittal, the Italian steelmaker Arvedi and the Indian group Vulcan Green Steel, a subsidiary of the Jindal conglomerate, which had already unsuccessfully submitted an offer for Ilva in 2017.
– Production down –
After a series of financial and legal setbacks, the Ilva group had already been placed under public administration in 2015 until the State entrusted its destiny to ArcelorMittal in 2018.
A chimney at the ArcelorMittal steelworks, ex-Ilva, on November 7, 2019 in Taranto, Italy (AFP/Archives/Andreas SOLARO)
The leaders of the former Ilva’s supply chain have had bad memories of this last placement under supervision which left them with 150 million euros in unpaid invoices.
From now on, “the main thing is to ensure the survival of the factory in order to restart production. Otherwise, there will no longer be an economy in this southern territory and all these companies will die”, commented to AFP Fabio Greco, the president of their association (AIGI).
ArcelorMittal had taken over the Ilva group with 10,700 employees, including 8,200 on the highly polluted Taranto site, whose toxic emissions have, according to legal experts, contributed to the deaths of thousands of people.
The world’s number two steel company committed in 2018 to cleaning up the immense site whose silhouette dominates the coast of Taranto and to increasing its annual production to eight million tonnes in 2025.
However, only one of the four blast furnaces currently remains in operation. Against a backdrop of rising energy prices and falling demand for steel, less than 3 million tonnes were produced in 2023.
© 2024 AFP
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