AM Italia blast furnace extension request filed amid talks with government: sources

A request extension has been filed at the Court of Taranto for the continuation of the works to meet environmental obligations at the blast furnace BF2 of ArcelorMittal Italia plant, formerly Ilva steelworks, in Taranto, sources close to the mill told S&P Global Platts.

Meanwhile, the Italian government and ArcelorMittal are holding talks to find a solution toward continuing operations at the plant, which is the largest Italian steel producer.

Works at BF2 were supposed to be done by the special administrators by December 13 but the administrators had requested for extension. The recently filed extension should cover a period of between 12 and 14 months.

ArcelorMittal had previously asked to extend the deadline in order to keep the BF2 operative. The failure to grant extension along with the removal of the penalty shield prompted AM Italia to pull out from Ilva’s investments on November 4, Platts earlier reported.

The company produces 1.4% of the Italian gross domestic product, including its supply chain, and provides directly 10,700 jobs and indirectly around 14,000 jobs.

During the weekend, the Italian Prime Minister, Giuseppe Conte, said that ArcelorMittal agreed to immediately restart talks with the Italian government over the future of the Ilva plant.

AM InvestCo, the main holding company of AM Italia, confirmed to Platts with a note “that a constructive meeting was held on Friday 22nd November with Prime Minister Conte and other government representatives to discuss solutions for the ex-Ilva steelworks. Discussions will continue with the aim of reaching an agreement as soon as possible to support sustainable steel-making in Taranto.”

AM Italia said on November 14 that it wanted to place all blast furnaces at the former Ilva steelworks in Taranto on standby mode by January 15, 2020, Platts reported earlier. AM Italia is producing at a rate of 3.8 million mt/year.

ArcelorMittal Group on November 4 asked the Ilva Special Commissioners to take back responsibility for AM Italia’s operations and employees within 30 days from receipt of the withdrawal letter. On November 12, ArcelorMittal asked the Court of Milan for withdrawal from the former Ilva rental contract.

AM Italia took the decision to withdraw from Ilva after Italian parliament removed legal protection for the company, leaving its managers liable to prosecution over environmental issues.

The decision was also taken as a result of the criminal court of Taranto obliging the Ilva extraordinary commissioners to meet certain conditions at the works by December 13, failing which blast furnace number 2 would be shut down.

In response the special commissioners filed an urgent appeal in the Milan court. The hearing has been set for November 27.