International Steel Mills
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/07/CRU-Logo-2023-07-21-at-4.35.41-PM.png)
CRU: Italy to take over ArcelorMittal plant
Written by Matthew Watkins
February 20, 2024
The Italian government says it will appoint commissioners with specific steel-sector expertise in the coming days to assume control of the Taranto works, which is majority owned by ArcelorMittal.
The financially troubled operation in the country’s south reportedly owes more than $3.2 billion and is unable to pay most suppliers, nor settle its gas and electricity bills. The government has a 38% stake in the plant via state investment agency Invitalia.
ArcelorMittal, which owns 62% of Taranto, responded by saying it was surprised and disappointed to learn via media reports that Invitalia had called for the special administration, as that proposal was not mentioned during an emergency board meeting held on Sunday, Feb. 18. “This is an egregious breach of the investment agreement,” the AFP news agency quoted the company as saying.
The Luxembourg-headquartered group also reiterated it is seeking an orderly exit from the public-private partnership, Acciaerie d’Italia (ADI).
Italy’s economic development minister Adolfo Urso said: “[ArcelorMittal] doesn’t have the intention to invest in the company. I believe that the country is justified in reappropriating the fruit of its labor and the sacrifices of entire generations.”
The government prepared the ground for special administration back in January.
Ownership uncertainty returns at ADI
To some extent we have been here before. The former Ilva was placed in special administration in 2013 amid a long-running legal case against its former owners Gruppo Riva centering on violations of environmental standards that were associated with elevated incidences of cancer in the local population around Taranto. In 2021, this case led to multiple managers, politicians, and consultants associated with Ilva receiving jail sentences, including 22 and 20 years, respectively, for brothers Fabio and Nicola Riva.
After operating under special administration for five years the deal that led to ArcelorMittal taking majority ownership of Ilva was agreed to in 2018. But Acciaierie d’Italia, as it was renamed, has often been in the news with stories – whether founded or otherwise – of discontent and apparent tension around the relationship between owners, operators, unions, and politicians. Operationally it has been running well below installed capacity. Reduced utilization is not something confined to ADI in the European steel industry, but steel is an emotive sector worldwide and any perceived weakness in it can be leveraged by various stakeholders to pursue their goals, whether that be employment levels, votes, or other factors.
At the time of writing, special administration has not actually taken effect, but the threat is that this will happen in the coming days. This may yet be a negotiating tactic. But with ArcelorMittal apparently prepared to exit, albeit on different terms, it seems that ownership changes will once again happen in Italy one way or another. What will happen next? If ADI is effectively nationalized, the government may look to increase production in the short term for political rather than commercial reasons. With sheet prices now falling in Europe, that would add supply into a weakening market and probably cause further short-term price falls. Longer term, there would be the question of what the future ownership structure looks like. Special administration is a tool but not a permanent solution, and the government has taken pains to highlight that it believes there to be interest from multiple parties in coming on board at ADI. One might keep an open mind on this. The political risk must surely now be perceived as elevated.
This article was first published by CRU. Learn more about CRU’s services at www.crugroup.com/analysis.
Matthew Watkins
Read more from Matthew WatkinsLatest in International Steel Mills
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/SSAB.png)
SSAB adjusts output in weak Q3, readies for Q4 rebound
SSAB said lower plate prices in the US were the primary reason for reduced results in the second quarter. With a dismal Q3 outlook, the Swedish steelmaker is adjusting production across its facilities. That includes moving up its annual US mill outage in anticipation of a better Q4. SSAB Americas Revenues in the Americas segment […]
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/worldsteel_logo.png)
Global steel production dipped in June
Global steel output eased 2% in June following May’s 14-month high, according to World Steel Association’s (worldsteel) latest release.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/ArcelorMittal.png)
Union rejects proposal to end strike at ArcelorMittal Mexico
The local mining union has rejected a proposal to end the labor strike at ArcelorMittal Mexico’s Lazaro Cardenas mill and Las Truchas mine in Michoacán, Mexico.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/NLMK.png)
NLMK mill targeted in Ukrainian drone attack
Novolipetsk Steel’s (NLMK) mill in Lipetsk, Russia, was the target of a raid by Ukrainian drones on Sunday, according to a Reuters report.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/06/USS-logo.png)
USS and Nippon clarify position on US trade case participation
U.S. Steel and Nippon Steel explained their position on USS’ participation in US trade cases should their proposed nearly $15-billion merger deal go through. The companies hope to close the deal by the end of the year.