Italy to invest € 1bn in Ilva to keep ArcelorMittal from buying

Tough negotiations between ArcelorMittal and the Italian government about the future of the Ilva smelter are drawing to a close. According to press reports, the government will add 1 billion euros and reduce the rate of investment in the development of production facilities.

According to Italian press reports, the negotiations, which expire on November 30, are coming to an end. Reporters call ArcelorMittal's debt repayment to suppliers a goodwill gesture.

When purchasing the steel plant, ArcelorMittal stated, in particular, an increase in steel production to 8 million tons per year by 2020. Technical problems, a weakening market and now the coronavirus made these statements unrealistic (according to some sources, production this year will approach 3 million tons) and this was also one of the topics of the negotiations. In the end, the government reportedly agreed to extend the deadline for reaching promised production volumes.

Another concession, which provides for another 13 weeks of plant downtime and layoffs, is expected to affect more than 8,000 people. people.

The concern was supposed to buy the steel plant for 1.8 billion euros and invest another 2.3 billion euros in the modernization and expansion of the plant. Now the Italian government must add another € 1 billion to this. Information about such a possibility appeared already during the first negotiations a year ago.

ArcelorMittal acquired Ilva in 2018. Problems with outdated equipment and a deteriorating market situation led to the decision to cancel the deal a year later, for which the Italian parliament had a good reason, which withdrew the legal protection that should have surrounded the company, while the environmental situation at the metallurgical plant improved. The company referred to the contract, saying that in this case it has the right to refuse it - it does not want to pay for the negligence of its predecessors, the Italian Gruppo Riva. The plant had to be closed due to great environmental damage.