ArcelorMittal says it will shut down ILVA's blast furnaces


ArcelorMittal, the Indian multinational company that threatens to abandon the former ILVA steelworks in Taranto, announced its intention to shut down the plant's blast furnaces, an action that would lead to the suspension for months and maybe years of production and damage for many millions of Euro. The decision took politicians and trade unions by surprise, who were almost unanimously opposed. An urgent appeal was filed today at the Milan court to block the multinational's intentions and force it to keep the blast furnaces lit. For today, new meetings are planned between the government and the multinational managers.

The decision to shut down the so-called "hot area" of the Taranto plant was communicated yesterday by managing director Lucia Morselli during a meeting with the unions. Morselli said that on December 13 the blast furnace number 2 will be extinguished, followed by the blast furnace on December 30th and finally the blast furnace on January 15th. Meanwhile, various other essential production facilities will also be switched off. For Rocco Palombella, general secretary of UILM, with this announcement ArcelorMittal "threw the mask", revealing his intention to leave the plant and leave it in a condition that makes it impossible to use for a possible competitor.

The announcement of the multinational company was particularly surprising because the day before the president of Puglia, Michele Emiliano, following a meeting with Morselli, announced that ArcelorMittal would wait several months before starting the shutdown procedures.

If the company actually succeeds in extinguishing the blast furnaces, the damage to the Taranto plant will be particularly serious. Blast furnaces are very complex structures, tens of meters high, within which cast iron is produced starting from iron ore and burning coal. They must always remain on: turning them off means breaking them, at least in part. To reactivate them it is necessary to carry out a complex reconstruction procedure that can take more than a year and cost tens if not hundreds of millions of euros. Some employees also explained to the newspapers that turning off a blast furnace is such a delicate operation that usually only one is planned and a year in advance. ArcelorMittal talks instead of turning off three in a few weeks: "Maybe they are magicians," one of them said at Corriere della Sera.

At the moment, the only way to avoid the switching off of the blast furnaces seems to be an intervention by the judiciary. The former ILVA is still owned by the state, while ArcelorMittal is only a tenant who has committed to purchase in the coming years. Today, the ILVA state commissioners should present an appeal to the Milan court in which they argue that turning off the blast furnaces would cause serious damage to the plant and therefore ArcelorMittal must immediately block its plan.

Ten days ago it was ArcelorMittal who contacted the court in Milan, formally communicating its intention to terminate the contract that bound it to the plant. Until a few days ago all the main players in the affair were convinced that the multinational company would await a court decision on the legitimacy of its request to terminate the contract before taking concrete action. Yesterday's announcement, however, took everyone by surprise.

Among the reasons that ArcelorMittal provided to justify its decision is the injunction by the judges of Taranto to proceed with the safety of one of the three blast furnaces by December 13th (a procedure already started, but still far from the be completed). The other reason is the removal of the penal shield against ILVA managers. ArcelorMittal claims that, under these conditions, continuing to operate the blast furnaces without a penal shield represents a risk of lawsuits for its managers (here we explained the whole affair).

Hardly anyone is convinced that these are the only reasons for leaving the plant. The government has in fact offered ArcelorMittal to restore the penal shield and to find a way to extend the end of the work to make the blast furnace safe, which the judiciary has ordered to shut down, but in several meetings and documents the multinational has let it be known that they are not enough offers. To stay, ArcelorMittal asks the government for authorization to dismiss 5,000 of the company's approximately 10,000 employees and the consequent shutdown of the hot area of ​​Taranto (the one where the blast furnaces are located).

The problem would instead be the bad situation of the international steel market, which would have made the investment in ILVA, and many others around the world, no longer convenient. At the moment, ArcelorMittal is clashing with governments in different countries to renegotiate its investment promises, reduce production, shut down plants and lay off workers. In 2018 ArcelorMittal, controlled by the Indian billionaire Lakshmi Mittal (one of the richest men in the world: here we told his story and that of his company) distributed profits to its shareholders for about 5 billion euros, a third of which were cashed by the Mittal family after a complicated tour through companies with offices in tax havens. Due to the steel crisis, 2019 should be a more difficult year for the company, but rating agencies expect shareholders to continue to receive several hundred million euros in dividends.

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