Acciaierie d'Italia

The steel corporation rejected the government's plan to acquire a controlling stake in ADI

ArcelorMittal has rejected the Italian government’s plan to acquire a controlling stake in Acciaierie d’Italia (ADI, formerly Ilva), one of the largest steel plants in Europe. This is stated in a statement by the Cabinet of Ministers, Reuters reports.

A source familiar with the matter told the agency that the only option left to keep the company afloat may be to place it under special management.

ArcelorMittal owns 62% of ADI’s shares, while the state investment agency Invitalia holds 38%.

A government statement said that Invitalia is ready to invest about €320 million ($351.10 million) in Acciaierie d’Italia to increase its stake to 66%. However, the steel corporation refused to provide guarantees for the additional investments that the company would need.

«The government has taken into account ArcelorMittal’s reluctance to assume financial and investment obligations even as a minority shareholder,» the statement said.

The Taranto steel mill has long been experiencing a liquidity crisis and has accumulated many debts to suppliers, including energy giant Eni. The company directly employs about 10,000 people, and another 6,000 are employed in related industries. In recent months, production has declined, some workshops have been closed, and many workers have gone on vacation.

The Italian government’s statement was made public after a meeting with ArcelorMittal CEO Aditya Mittal. The government instructed Invitalia to make the appropriate decisions through its legal team.

According to LaStampa, trade union representatives point out that ArcelorMittal’s position is unacceptable. They believe that a turning point has been reached and that the government must take responsibility for the future of Acciaierie d’Italia.

«We ask the government to act in accordance with the intentions of the last meetings, ensuring full control of the company and continuity of production, protecting the sites and employment levels, preserving and protecting a strategic asset that is crucial for the future of the country,» said CISL leader Luigi Sbarra.

A meeting between government officials and trade unions is scheduled for January 11.

For a long time, one of the main questions was whether ArcelorMittal was ready to invest in the rescue and further development of ADI. In particular, in September 2023, a memorandum of understanding was signed between the government and the steel corporation, which obliges the government to finance environmental initiatives worth €2.27 billion, which will be received through RePowerEu or other European funds, while the remaining €2.35 billion will be taken over by Acciaierie d’Italia.

As GMK Center reported earlier, ADI’s Taranto plant planned to produce 4 million tons of steel in 2023 and 5 million tons in 2024. In addition, it was announced that in the second half of 2023, the plant was to start reconstructing blast furnace No. 5, which had been out of service for many years.