In declaring its intention on 4 November, the company said it had no choice but to withdraw because of the loss of the legal protections and imposition of what it called an impossible to-meet, court-mandated deadline to complete certain improvements to Ilva’s Taranto works.  

The improvements had to be completed this month; otherwise it would have to shut down its No. 2 blast furnace.   

“The shutdown would make it impossible for the company to implement its industrial plan, operate the Taranto plant and, generally, perform the (sale) agreement,” ArcelorMittal said. 

ArcelorMittal is operating Ilva’s Taranto works under a lease from the Italian government and a promise to eventually buy the plant outright. As part of the agreement, the government gave it a grace period in which to make environmental improvements to the plant. However, the Italian Parliament voted to revoke the immunity at the request of lawmakers from the Five Star Movement, according to the (London) Financial Times. 

The agreement gives ArcelorMittal the right to walk away if a new law were to impair its ability to operate the plant or execute on its plan for the facility. The decision to rescind the protections certainly does that, Arcelor Mittal said. 

“The agreement stipulates that, in the event that a new law affects the environmental plan for the Taranto plant so as to materially impair the ability to operate it or to implement its industrial plan, the company has a contractual right to withdraw from the agreement. Effective on 3 November 2019, the Italian Parliament has removed the legal protection necessary for the company to implement its environmental plan without the risk of criminal liability, thus justifying the withdrawal notice,” it said. 

The announcement drew the anger of Italian labor unions and prompted calls for the company to be summoned to the capital to explain itself. 

“The government will not give its consent to closing Ilva. There is no legal basis for the contract to be canceled. We will summon Mittal to Rome immediately,” a source told the Reuters news service.