The future of the Taranto integrated steelmaking site of Acciaierie d’Italia (ADI), the former Ilva, remains uncertain. A key meeting to discuss the future of the company, majorly controlled now by ArcelorMittal, with the participation of the state owned company Invitalia, will be held imminently. Nevertheless 10 years after the beginning of the problems for the largest European steelmaking complex, it is still unclear who will manage the mill in the future and if it will have the funds to move into a new phase.
The meeting in program between ArcelorMitta, Invitalia and the Italian government is set to take place following strikes by the company’s workers to call for the government to support ADI financially and take full control of the company. Amid a liquidity crisis, ADI’s management recently decided to suspend its use of contractors. This, on top of almost 3,000 workers being temporarily laid off, is putting in doubt production continuity. The steelmaker is said not to be paying many of its debts.
“The situation in Taranto remains very difficult. There is a majority shareholder (ArcelorMittal) that is not supporting financially the company. Similarly, the minority shareholder (Invitalia) has troubles injecting money in a company that remains run by ArcelorMittal,” Antonio Gozzi, president of Federacciai, said during an event in Genova last week attended by Kallanish.
Invitalia was expected to take over the majority control of ADI in May through a new injection of capital, but this move has been delayed.
Meanwhile, the Taranto plant continues to run at reduced capacity.
“It is now some 12 years that capex investments in the plant have not been done,” Gozzi added. “The Riva family used to invest some $350 million of capex each year before 2010.”
According to the executive, the Taranto mill needs the rebuilding of blast furnace number 5, the largest in Europe, as well as one coil and plate rolling mill.
“In March 2022, the company said it would ramp up output to 5.7 million tonnes; we are now at slightly over 3mt,” a union said in a note denouncing the “dramatic situation.”
Gozzi added that while the Taranto plants has many troubles, from an environmental point of view the mill has reached some of the highest standards in Europe, following the investigations of the Italian justice system. “There is still a huge amount of work to be done in terms of production quality and worker’s safety to bring back Taranto to the levels it deserves, given that it remains one of the largest plants in Europe,” Gozzi concluded.
The troubles for the Taranto mill and the Ilva company started back in 2012 when the local court effectively closed the mill and took the control away from the former owners, the Riva family, following an investigation on environmental wrongdoings. In 2018 ArcelorMittal acquired the former Ilva assetts after a long bidding process, but this has not put an end to the troubles for the Taranto complex. In late 2020 Invitalia, a state owned investment group, entered in the shareholding structure of Acciaierie d’Italia to support financially the company after the difficulties caused by the Covid pandemics. The arrival of Invitalia into the company opened the doors again to a change of governance and the possibility of a full state control on the assetts in the future.
Truly global, user-friendly coverage of the steel and related markets and industry that delivers the essential information quickly while delivering on most occasions just the right amount of between-the-lines comment and interpretation for a near real time news service of this kind.
Very good overview of the weekly steel market.