Former Ilva, the return of the Italian State in the steel business

A new agreement between the steel giant ArcelorMittal and State-owned Invitalia was signed on December 10, 2020. Thanks to this deal, Invitalia, which is wholly owned by the Italian’s Treasury, will become the main shareholder of former Ilva steelworks.

The agreement, which marks the return of the Italian State in the steel business after a 25-years long hiatus, provides for "an articulated plan of environmental and industrial investments". The industrial plan aims at reaching 8 million t/year of steel production in 2025. This goal will be achieved thanks to the reactivation of Blast Furnace 5 (stopped since 2015, which alone could cover for more than 60% of production), the use of Blast Furnace 4, and the debut of a new electric arc furnace dedicated to the production of low carbon steels up to 2.5 million t/year. The implementation of electric arc furnaces is part of a wider decarbonization process to make Ilva the largest “green” plant in Europe.

The takeover will be articulated in two distinct phases: in a first step, Invitalia has planned a capital increase of 400 million euros for joint control of AmInvest Co. Italy Spa (currently owned by ArcelorMittal). This investment, it is understood, is subject to antitrust authorization from the European Union. In May 2022, Invitalia will then become the main shareholder with a second capital increase of up to 680 million to raise its stake at 60%. ArcelorMittal will invest up to 70 million euros, to the extent necessary to retain a 40% shareholding.

The agreement will finally put an end to months of negotiations between the Italian government and the steel giant that took control of the former Ilva in 2018.