BackYou are here  :  Home - News - Industry News

Landmark week for Italian steel sector

Week 49 shall be remembered by Italian steel sector players as historic period with significant progress happening on resolution of long lasting troubles of three major steel mills – Ilva, Lucchini and AST Terni

1. Italian government has given the green light to Algerian conglomerate Cevital’s proposal of last week to acquire steelmaker Lucchini's site in Piombino. While the Italian Prime Minister Mr Matteo Renzi, during his today official visit in Algeria, has blessed together with the Algerian Prime Minister Abdelmalek Sellal, the acquisition of Lucchini Piombino by Cevital. At the same time the Italian Ministry of Economic Development has issued on official note where is confirming to have authorized the Commissar Mr Pietro Nardi to accept the offer of Cevital.

Cevital will therefore acquire Lucchini Piombino (Steel Mill), Lucchini Services and Vertek Piombino (drawing, peeling and other finishing operations on wire rod and carbon bars produced by the Steel Mill), as well as the 69.27% of GSI Lucchini. All workers will keep their jobs.

The project of Cevital is including the realization of 2 EAF and other intervention in the steel mill, as well as operations in the agro food field for a total investment amount of about EUR 400 million.

2. ThyssenKrupp and the trade unions for AST Terni, FIM, FIOM, UILM, FISMIC and UGL, signed a deal to save troubled AST steelmaker in the Umbrian town of Terni, averting announced layoffs. Labor and management have signed on to a government brokered four year development and restructuring plan. 

According to the agreement there will not be any dismissal of workers except for those that will voluntary leave the job being close to the pension and that will receive incentives. 

The two furnaces will remain in full function with guaranteed production of at least one million tonnes of steel

3. The Italian government on Sunday has decided to intervene in the Ilva steel plant impasse and nationalize the former Riva company. A per available information, the government’s intervention would last 2 to 3 years, the time necessary to solve the environmental issue, to enhance the necessary investments and re-finance the whole company. Then the company would be put again in the market, in order to attract best possible offers from private investors.

Italian Prime Minister Mr Matteo Renzi said in an interview published in the daily La Repubblica that "We could put the company back on its feet in two or three years, protect jobs, protect the environment and then put it back on the market. He would rather see the steel plant in private hands, but if no solution was found then I prefer intervening directly for a few years".

The opinion is that this should be the right decision. 

The alternative would be to accept the proposal of ArcelorMittal and Marcegaglia that will be forcedly poor, considering the actual situation of the iMll aggravated by environmental troubles and consequent sanctions, by huge debts and labor conflicts, with the possible perspective of being only exploited without any real investment. ArcelorMittal and Italy's Marcegaglia said earlier last week they had submitted a non bidding offer to acquire Ilva's operations. Their terms of the offer include a series of conditions, including a 30 day deadline for acceptance. The bid is being examined by Ilva's special commissioner. 

The Ilva site at Taranto in the Puglia region of southern Italy has been under special government administration since last year after its owners were accused of failing to contain toxic emissions. The plant employs 16,000 workers and has the biggest output capacity of any plant in Europe. Ilva's Taranto plant is currently producing about 20,000 tonnes of steel per day, or about 7.0 million metric tonnes per year, compared with an output of 6.3 million tonnes in 2013 and 8.3 million metric tonnes in 2012. The company is also looking at the option of reducing working hours for a third of workers or 3,500 employees at the Taranto plant, in a bid to save money.