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Court blocks deliveries to Italian steel plant, Europe's biggest
* Plant accounts for about one third of Italy steel output
* But concerns over emissions have caused partial closure
* Govt keen to keep open to support struggling industry
ROME, Sept 6 (Reuters) - An Italian court has blocked raw material deliveries to Europe's biggest steel plant, an investigative source said on Thursday, escalating a spat between the government and judges over the future of one of southern Italy's largest industrial employers.
Judges had previously ordered the ILVA plant in the southern city of Taranto to clean up its operations or be shut down, arguing that fumes from the facility - which accounts for about a third of Italian steel output - had caused an "environmental disaster".
Prosecutors ordered the partial closure of the privately-owned plant in July.
But on Wednesday Italy's government, which is keen to support the country's struggling industrial sector as it tries to pull the country out of recession, said it was committed to keeping production going there despite the judicial order.
The order to block deliveries to the plant is the first measure taken after a meeting between its administrators and the chief prosecutor last Saturday, the source said.
The move to block deliveries could force a halt to production and bring about a stand-off between the government and magistrates, who Environmental Minister Corrado Clini last month accused of overstepping their authority on the issue. [ID: L6E8JE5WQ]
The government says a closure of the plant, which employs 12,000, would cost 8 billion euros in increased imports, unemployment support, reduced tax revenues and depressed spending in the area.
Judges ordered a partial shutdown after court documents said emissions of dust, dioxin and other cancer-causing chemicals had caused hundreds of deaths from respiratory diseases in Taranto and the surrounding region.
A health ministry study showed that cancer death rates around the Taranto area were 15 percent higher than in the rest of the country, with lung cancer rates running 30 percent higher.
The environment ministry argues that the plant should be kept fully open, because if production is interrupted the plant will not have the funds to invest in cleaner technology, while unions have said a slowdown in production could risk jobs.
The plant was fully meeting customer demand at the end of August, Bruno Ferrante, its chairman, told Reuters, explaining that its huge, continuously operating blast furnaces cannot be switched off without a long-term shutdown of the site. [ID: L6E8JTJJC]
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