Italy considers special administration for ArcelorMittal steel plant

Italy's government could put the former Ilva steel plant under special administration, Industry Minister Adolfo Urso told Reuters on Thursday, after its main shareholder ArcelorMittal rejected a state-backed plan to keep the site afloat.

Italy's government could put the former Ilva steel plant under special administration, Industry Minister Adolfo Urso told Reuters on Thursday, after its main shareholder ArcelorMittal rejected a state-backed plan to keep the site afloat. ArcelorMittal, the world's second-largest steelmaker, took control of Acciaierie d'Italia (ADI) formerly known as Ilva in 2018. It currently owns 62% of ADI, while public investment agency Invitalia has the remaining 38%.

Bogged down by an increase in energy prices and a drop in rolled steel coil prices, the steel plant has long been short of cash and has accumulated a huge debt pile with suppliers, including energy giant Eni. "It is an option," Urso told Reuters when asked if the government was considering the appointment of special commissioners to run the site. He did not rule out Rome injecting fresh resources into ADI despite ArcelorMittal dragging its feet.

ADI directly employs 8,200 people at a huge steelworks in the southern city of Taranto and unions are urging the government to safeguard jobs. The case risks ending in court with both the government and ArcelorMittal accusing each other of failing to respect their commitments.

The government this week proposed that Invitalia inject 320 million euros ($351 million) into ADI and then raise its stake to 66%, as part of a broader plan to strengthen the company's capital. ArcelorMittal, however, refused to offer guarantees that it would provide further investments even as a minority shareholder, sinking the proposal.

In an earlier parliamentary debate, Urso said "drastic action" was needed for the former Ilva steel plant, which the right-wing government of Giorgia Meloni deems as crucial for steel supply. "Nothing that was planned has been realised. None of the commitments made have been fulfilled with regard to employment levels and industrial revitalisation," Urso told lawmakers.

A source close to ArcelorMittal said the group was ready to back the government's plan provided it would continue to have similar governance powers to Invitalia. But Urso rejected such option, making reference to possible violations of European rules against state aid.

A meeting between workers representatives and ministers on the issue is scheduled to take place at 1800 GMT. ($1 = 0.9123 euros)

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