People enjoying the beach in front of the steel manufacturing giant Arcelor Mittal Italia plant, in Taranto, southern Italy, on July 22 2019. Picture: AFP/TIZIANA FABI
People enjoying the beach in front of the steel manufacturing giant Arcelor Mittal Italia plant, in Taranto, southern Italy, on July 22 2019. Picture: AFP/TIZIANA FABI

Rome — A stand-off between Italy and ArcelorMittal over the future of the EU’s biggest steel mill escalated on Tuesday, after the country’s economic development minister lashed out at the company.

“We won’t allow ArcelorMittal to blackmail the government by threatening more than 5,000 job cuts,” economic development minister Stefano Patuanelli wrote in a Facebook post. “Commitments should be upheld.”

On Monday, ArcelorMittal started legal procedures to hand the mill in the southern city of Taranto back to the Italian government after Rome annulled a criminal immunity over pollution before a planned clean-up is completed in 2023.

“The company’s industrial plan hasn’t been realised,” Patuanelli said, adding that the company is losing more than €60m (R978m) a month due to lower-than-expected production.

The stand-off has proved a major headache for the coalition led by Prime Minister Giuseppe Conte, already under pressure by opposition leader Matteo Salvini. Closing the plant would risk thousands of jobs and may even have an impact on the national economy. Salvini has called for the government to resign in case jobs will be lost and said the country’s industrial future is at stake.

A meeting between Conte and ArcelorMittal officials to discuss the issue, initially scheduled for Tuesday, has been postponed to Wednesday, according to news-agency Ansa. Conte will also asked to refer to parliament over the case.

Finance minister Roberto Gualtieri said the government will do “everything it can” to avoid a “dramatic outcome”.

The former Ilva plant was acquired by ArcelorMittal for €1.8bn from the government last year with the pledge of a €1.2bn investment to improve the mill’s environmental performance by 2023. The plant’s pollution has long been under scrutiny and linked to higher cancer rates around Taranto.

In his Facebook post, Patuanelli said Italian laws already include a prosecution waiver for cases such as the Ilva plant but ruled out norms that would specially protect ArcelorMittal.

Bloomberg