ArcelorMittal announces it will leave Italian steel plant Ilva

Monday, 04 November 2019 17:54:21 (GMT+3)   |   Brescia
       

AM InvestCo Italy has sent a notice to the commissioners at the Taranto-based Ilva steel works to withdraw from, or terminate, the agreement for the lease and subsequent conditional purchase of the business of Ilva S.p.A. and certain of its subsidiaries, closed on 31 October 2018, Luxembourg-headquartered global steel giant ArcelorMittal has stated in a note.

ArcelorMittal reached a deal last year to buy the heavily-polluting Ilva plant which employs 10,700 workers including 8,200 in Taranto. The company stated, "The agreement stipulates that, in the event that a new law affects the environmental plan for the Taranto plant so as to materially impair the ability to operate it or to implement its industrial plan, the company has a contractual right to withdraw from the agreement. Effective on November 3, 2019, the Italian parliament has removed the legal protection necessary for the company to implement its environmental plan without the risk of criminal liability, thus justifying the withdrawal notice".

"In addition, the decisions issued by the criminal court of Taranto bind the Ilva extraordinary commissioners to complete certain prescriptions by December 13, 2019 - a term the commissioners themselves deemed impossible to meet - failing which blast furnace number 2 will be shut down," continues the note. "Such prescriptions should also reasonably and prudentially be applied to the other two blast furnaces at the Taranto plant. The shutdown would make it impossible for the company to implement its industrial plan, operate the Taranto plant and, generally, perform the agreement".

"Other serious occurrences, independent of the company's will, have also led to a situation of legal and operational uncertainty that has further significantly impaired the ability to carry out the necessary operations at Ilva and operate the Taranto plant. All the mentioned circumstances also entitle the company to terminate the agreement under the applicable provisions and principles of the Italian Civil Code. In accordance with the content of the agreement, the company has asked the extraordinary commissioners to take responsibility for Ilva's operations and employees within 30 days from the receipt of the notice of withdrawal and termination," the statement continued.

ArcelorMittal had committed to make environmental investments worth €1.1 billion, production investments worth €1.2 billion and to pay the former Ilva once the rental period ended (18 months starting November 1, 2018) €1.8 billion euro (minus the fees already paid).


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