Home » Steel, Ex Ilva: Mittal and the Italian State at loggerheads again

Steel, Ex Ilva: Mittal and the Italian State at loggerheads again

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Steel, Ex Ilva: Mittal and the Italian State at loggerheads again

On the former Ilva there is a clash over the billion of the Pnrr to build the iron pre-reduced plant in Taranto, the semi-product that will have to feed the future electric furnaces of the steel factory, reduce emissions and implement decarbonisation. The clash pits the public side, in this case the Dri d’Italia company headed by Invitalia (Mef), against the private Mittal which controls 62 percent of Acciaierie d’Italia (the other 32 is in the hands of Invitalia ). There are resources on the pre-reduced system (Law No. 175 of 17 November 2022, Aiuti Ter decree) and Dri d’Italia is moving forward.

In July it will choose between the two technologies in the field and in September it will formalize the contract. The plant will go into operation in 2026, it will be in the former Ilva and will produce around 2 million tonnes of pre-reduced per year. Private steelworkers are also interested in the game and are working with Dri d’Italia for a second pre-reduced plant after the one for the former Ilva (to be financed). The road would seem to go downhill and instead public and private are at loggerheads. As revealed by a letter that the CEO of Acciaierie d’Italia, Lucia Morselli (designated by Mittal and CEO even earlier, when the group was only Mittal and did not have the participation of Invitalia), sent to Dri d’Italia, to Ilva in extraordinary administration (company that owns the plants leased to AdI) and to the ministers of Enterprise and European Affairs, cohesion and Pnrr.

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Acciaierie d’Italia: all the reasons for dissent

Morselli starts from a method dispute and then broadens the field to ask that AdI take care of the pre-reduced. The method: AdI is excluded “from sharing essential documents and conversations. Dri sent its technical report on the project to Ilva in ass but not to AdI, the manager of the Taranto plant and recipient of the production of the DRP plant” (the pre-reduced). The credit: Dri of Italy, accuses Morselli, “even called the tender for the construction of the plant without coordinating the technical specifications underlying the tender with the user of the plant production in the tender”, i.e. the AdI itself. Furthermore, continues Morselli, “the pre-reduced plant would have a capacity 20% lower than that required to feed the SAF oven” (electric oven). And again, “Dri would expect to carry out the environmental characterization activities of the areas inside the Taranto plant before having a legal title to the areas themselves with the risk that it is the AdI manager who will have to take charge of any safety works”.

Furthermore, according to Morselli “it is not at all clear how the DRP plant will receive and store raw materials, be fed with energy and dispose of its effluents”; “the separate construction of the DRP plant and the SAF furnace produces diseconomies both in the procurement and management phases, as well as raising the concrete risk of inconsistencies of a technical nature which risk jeopardizing the correct functioning of the two plants”; “Dri is determined to build the plant without even knowing under what commercial conditions it will sell its production.” All this to get to the point: “Let’s go as far as defining a structure that delegates the creation of the DRP plant to AdI even before its management, or to those who have the technical and operational skills, as well as management responsibility for the plant in which the plant will have to insist and in particular of the SAF furnace with which the plant will have to be integrated”, writes Morselli.

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Dri d’Italia (Invitalia): this is how the project is put at risk

Dri d’Italia’s reply was dry and clear. What AdI says with Morselli is “in total contrast with the rules that define the methods of State intervention in the steel decarbonisation process and with potential negative repercussions on its implementation”. Dri of Italy specifies that “its mission is defined by two laws of the State” and “in line with the provisions of the law, Dri of Italy is working and will continue to work to respect the times of the Pnrr which provide for the implementation of the pre-reduced plant by June 2026”. The clash over the pre-reduced is only the latest episode of a difficult coexistence between private and public in the former Ilva and it is no coincidence that now the hypothesis of accelerating the transition of the state to the majority in AdI (60 percent) has recovered carrying out the operation within the year while it is now placed by May 2024. To this end, the Government would use the law on strategic plants (number 17 of last March 3) and would convert the 680 million that Invitalia disbursed to AdI into capital.

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