Milan (AFP) – After months of deadlock, the Italian government on Monday announced a temporary state takeover of a troubled steel mill majority-owned by steel giant ArcelorMittal.
“In coming days”, the government will appoint commissioners “with specific expertise in the steel sector” to take control of the former Ilva steel plant, said a government statement.
The former Ilva steel plant in the southern city of Taranto, in which the state already has a minority stake, is on the edge of bankruptcy, with over three billion euros ($3.2 billion) in debt.
It is unable to pay most of its suppliers, nor settle its gas and electricity bills.
Under the terms of emergency administration, the government will appoint administrators to prepare a restructuring, while seeking new investors, sources close to the matter had previously said.
The state investment agency Invitalia on Sunday called on the government to begin takeover procedures after ArcelorMittal refused to inject fresh funds.
ArcelorMittal responded that it was “surprised and disappointed” to learn from Italian media that Invitalia had called for the special administration, as it had not mentioned doing so during an emergency board meeting Sunday.
“This is an egregious breach of the investment agreement”, it said in a statement to Invitalia, a copy of which was seen by AFP.
ArcelorMittal has said it participated in good faith discussions to support the Taranto mill or to arrange for an orderly exit from ownership, and “we reject your attempt to blame us for their unsatisfactory outcome and to absolve yourselves and the Italian government for the failure of our public-private partnership.”
ArcelorMittal owns a 62 percent stake in the steel mill and the Italian state the remaining 38 percent.
The government of Prime Minister Giorgia Meloni and ArcelorMittal have been trading accusations for weeks over who is to blame for a breakdown in talks on the plant’s future.
From the moment that ArcelorMittal “doesn’t have the intention to invest in the company, I believe that the country is justified in reappropriating the fruit of its labour and the sacrifices of entire generations”, Economic Development Minister Adolfo Urso said Sunday.
Trade unions were invited to a Monday meeting during where the government announced its decision about the mill’s fate.
The government considers the steel mill to be strategic for the country and wants to keep it operating to safeguard about 10,700 jobs.
Among potential investors cited in Italian media is Ukraine’s Metinvest, which has been hunting for new production facilities since Russian forces seized the Azovstal mill in Mariupol in May 2022.
Also reportedly interested are Italian steel firm Arvedi and Vulcan Green Steel, a subsidiary of Jindal Steel and Power, which bid unsuccessfully for the Taranto mill in 2017.
ArcelorMittal acquired the Taranto mill in 2018 after the Italian government put it under extraordinary administration in 2015 following financial and legal problems.
Creditors, also invited to Monday’s meeting, have bad memories of the mill’s previous spell in administration, with over 150 million euros in debts left unpaid according to their estimates.
