ArcelorMittal representatives met Wednesday with Italian government officials to discuss the future of AM Italia, the largest domestic flat steel producer, after Italian Prime Minister Giuseppe Conte last week rejected AM’s new plan that outlined cuts in production and workers.
According to sources, the Italian government sees the former Ilva producing 8 million metric tons of crude steel a year by 2023 with no jobs cuts, while, as already reported, steel giant ArcelorMittal has outlined a plan under which AM Italia should produce around 4.5 million mt of crude steel next year and then arrive at 6 million mt by 2023, minus 6,000 workers.
According to sources, the government is also ready to enter in AM Italia with an 18% stake in the troubled steel plant through state lender Cassa Depositi e Prestiti or Invitalia, a state-owned investment agency, in a bid to persuade AM to not walk away from the 2018 deal under which it bought the plant. This was not the first time the Italian government intervened in the case of a private company it considered strategic for the economy. The Italian government has through CDP a 25.76% stake in of the share of Italian oil company Eni.
“If the government will enter in AM Italia, we will be favorable,” unions told Platts. AM Italia workers went on strike Tuesday, reacting to the news that AM, in order to keep operating in Italy, would cut thousands of workers.
AM Italia said November 4 that it would withdraw from the Ilva agreement after the Italian Parliament removed legal protection for the company, leaving its managers liable for prosecution over environmental issues. The decision came as a result of the court in Taranto obliging the Ilva extraordinary commissioners to meet certain conditions at the works by Friday, failing which blast furnace No. 2 at the plant would be shut down.
The special commissioners appealed the decision and filed an urgent appeal in court in Milan in response to AM’s decision. The hearing was postponed until December 20, giving AM and the Italian government a chance to find common ground.
The Tribunal of Taranto ruled Tuesday night that BF2 has to stop production by Friday, in a document seen by Platts.
When contacted by Platts, AM said it does not comment on such discussions. The Italian government did not answer a request for comment, nor did CDP.
Sources said an agreement is unlikely to be reached before the Tribunal of Milan’s verdict is released December 20.
AM and government officials will meet again Thursday, this time with union officials present.
— Annalisa Villa