Italy files appeal to stop ArcelorMittal walking away from Ilva

MILAN (Reuters) - Italy's government filed an urgent court appeal on Friday to try to stop ArcelorMittal MT.AS walking away from a 2018 deal to buy the troubled Ilva steel plant, as a union said the group was preparing to leave on Dec 4.

FILE PHOTO: Steam comes out of the chimneys of the Ilva steel plant in Taranto, Italy, November 11, 2019. REUTERS/Ciro De Luca/File Photo

ArcelorMittal has blamed a government move to scrap previous guarantees of legal immunity during a massive clean-up operation at Ilva’s heavily polluted plant in the southern city of Taranto.

But the government has said the group has no legal grounds to pull out of the contract and has accused it of using the immunity issue as a pretext to walk away from Ilva because it is running up heavy losses there.

The FIM-CISL union said the company had confirmed it would hand over Europe’s biggest steel plant to state-appointed administrators on Dec. 4 and had begun winding down operations ahead of turning off blast furnaces and production lines.

No comment was immediately available from the company.

Prime Minister Giuseppe Conte said he would not allow ArcelorMittal to shut down operations, saying any such move would represent a “clear violation” of its obligations.

“The government will not let them deliberately pursue the closure of blast furnaces, which would mean the end of any prospect of relaunching this productive investment and safeguarding employment levels,” he wrote on Facebook.

Conte’s coalition has come under heavy pressure as it battles to save thousands of jobs in an area with some of the highest levels of unemployment in Italy and at the same time ensure a clean-up of decades of environmental damage from the sprawling Ilva plant.

The government’s appeal in Milan could be the first step in a protracted legal tussle over the future of Ilva after Conte last week promised “the battle of the century” if the case came to the courts.

Separately, Milan prosecutors said they had opened a dossier to decide whether there were grounds to start a criminal investigation into possible job losses and environmental damage at the plant, which employs around 8,200 workers, with thousands more jobs depending indirectly on the site.

Under Italian law, the procedure followed by the prosecutors is intended only to establish whether any criminal offences may have been committed and does not target any suspects or include any specific allegations.

The Milan prosecutors’ office said there was a “strong public interest around the protection of employment levels, the economic and productive needs of the country and the obligations concerning a process of environmental rehabilitation”.

Reporting by Alfredo Faieta and Crispian Balmer; editing by James Mackenzie and Giles Elgood