/ Rome puts giant Ilva steel plant under state supervision

After months of futile negotiations with its major shareholder, ArcelorMittal, the government announced its decision at a meeting in Rome with executives from companies in the steel mill supply chain in the Taranto (in the south of the country) and with trade unions.

On the verge of financial asphyxiation and collapsing under a debt of 3,1 billion euros, the former Ilva, one of Europe's largest steel mills, is no longer able to pay many of its suppliers and pay its gas and electricity bills.

"In the coming days, the government will appoint commissioners to take control of the former Ilva," people with specific experience in the steel sector," the press release stated.

State investment firm Invitalia asked the Ministry of Enterprises on Sunday night to begin the process after ArcelorMittal "refused" to inject fresh money.

The steel giant said it was "surprised and disappointed" by the initiative, which it said had not been brought to the attention of the board of steel plant operator Acciaierie D'Italia the day before.

"This is a material breach of the investment agreement," signed with Rome, ArcelorMittal said in an e-mail to Invitalia, which said it "reserves all rights.

Acciaierie D'Italia is now 62% owned by ArcelorMittal and 38% by the Italian state.

Meloni and Governor ArcelorMittal blame each other for failing to fulfill their obligations and for the failure of the negotiations.

ArcelorMittal "does not intend to invest in the company, but I think it is fair that the country recovers the fruits of its labor and the sacrifices of its generations," said Entrepreneurship Minister Adolfo Urso.

Candidates

The government's objective is to keep the plants that are considered strategic for the country in operation and to revitalize the Italian steel industry.

Under the so-called "emergency administration," the government has appointed a commissioner to draw up a rescue plan before new investors arrive.

According to the Italian press, candidates include the Ukrainian steel group Metinvest, which has been looking for a new production base since May 2022, when Russian troops took control of the giant Azovstal steel mill in Mariupol, southeastern Ukraine.

Also bidding to replace ArcelorMittal are Italian steelmaker Arvedi and Indian group Vulcan Green Steel, a subsidiary of conglomerate Jindal, which failed in its bid to buy Ilva in 2017.

Falling Production

After a series of financial and legal setbacks, the Ilva group was placed under state control in 2015, and in 2018 the state entrusted its fate to ArcelorMittal.

The former Ilva supply chain manager has a poor memory of the last restructuring, leaving 150 million euros in unpaid invoices.

Going forward, "the most important thing is to ensure the survival of the plant in order to resume production. Otherwise, there is no economy in this southern region and all these companies will die," Fabio Greco, president of the association (AIGI), told AFP.

ArcelorMittal acquired the Irva Group, which employs 10 700 people, including 8 200 at the badly polluted Taranto plant, whose toxic emissions have caused thousands of deaths, according to legal experts.

In 2018, the world's second-largest steelmaker pledged to clean up its massive site on the Taranto coastline and increase annual production to 8 million tons by 2025.

However, only one of its four blast furnaces is currently in operation. Amid rising energy prices and declining demand for steel, less than 3 million tons will be produced in 2023.