Italian court says Taranto steel plant’s blast furnace 2 can stay open

An Italian appeals court Tuesday decided that blast furnace No. 2 at the ArcelorMittal Italia plant, formerly the Ilva steelworks, in Taranto can stay open and continue to produce steel, Italian steel federation Federaccia and the plant’s labor unions said.

ArcelorMittal declined to comment.

The Taranto Appeals Court accepted the appeal by Ilva’s extraordinary commissioners against the shutdown of the blast furnace at the largest steel plant in Italy. On December 10, a lower court decided that the furnace should be shut down, rejecting s request for extension “of the use of the facility for a year.”

The blast furnace has a design capacity of 2 million crude steel a year but is now operating at a rate of 1.5 million mt/year, the unions said.

The decision was crucial for the continuation of the negotiations on the future of the steel mill between the government and commissioners with the current owner, ArcelorMittal Italia.

ArcelorMittal had previously asked for an extension to the deadline to keep the blast furnace operating. The failure to grant an extension along with the removal of the penalty shield prompted ArcelorMittal Italia to pull out from buying Ilva on November 4. In response the special commissioners filed an urgent appeal in the Milan court with the Italian government which started to negotiate with ArcelorMittal.

On December 20, ArcelorMittal signed a non-binding agreement with the Italian government to continue negotiations on a new industrial plan for Ilva, including discussions on a substantial equity investment by a government-controlled entity. The talks are continuing and a solution is expected to be reached by the end of January.

Ideally, the Italian government would want the plant to produce 8 million mt/year with no job cuts. This contrasted with the steel giant’s plan to cut production to 4.5 million mt from next year and eventually produce 6 million mt by 2023, with 6,000 job cuts. This plan was rejected by Italian Prime Minister Giuseppe Conte in December.

“We are completely satisfied with the decision on blast furnace 2. Thanks to this decision, negotiations can continue on the reorganization and relaunching of the most important steel site in Italy,” Federacciai President Alessandro Banzato said.

— Annalisa Villa