Genoa – A relaunched and competitive Ilva on the market is possible and necessary for the national industry to be competitive. New private partners can be involved, «but it is necessary to carry out a truthful operation, prepare an adequate industrial plan and be aware that the nationality of the partners is not irrelevant. As this story demonstrates, if you are a global operator, you legitimately invest where it suits you.” Antonio Gozzi, number one of the Duferco group and president of Federacciai, is convinced that the State can save the former Ilva with the contribution of new shareholders.
What prospects do you see?
«The State must take temporary control of the group and involve new private partners. It can be done, under certain conditions.”
Which?
«A truth operation must be carried out, on three aspects. First: it is inconceivable in a civilized country that the shareholder agreements with ArcelorMittal are classified: we don't know what is written, we can sense it, Mittal is in charge even if he is in the minority and there is compensation from the State in the event of non-compliance . These idiotic agreements are the offspring of the Conte government, which when it wanted to wave the flag of eliminating the criminal shield, made concessions under the table which today represent a further difficulty in the dispute that will arise, therefore a potential damage to the State. Second: what is the debt situation of the company and who will take care of the debts? We can express moral judgments on the partner who has released himself from responsibility, but the other partner remains, the State, and it is clear that whoever takes over in the future will not be able to take over the debts. Third element: what is the state of the systems? The Rivas in Taranto invested 350 million euros a year, for years all investments have been concentrated on environmentalisation. Little has been done on the plants, which guarantee the quality of the products and the safety of the workers.”
THEthe industrial plan?
«To be serious it must be viable and supported by an adequate financial plan. I am convinced that the relaunch of Taranto is possible, but we must start from due diligence on the state of the plants and a clear industrial plan.”
It has been said, and is still said, that blast furnace 5 in Taranto, the largest in Europe, is essential to guarantee the economic sustainability of the group.
«What would be the point of spending 650 million euros on a plant that will close within six years because there will no longer be free CO2 quotas? The topic of CO2 is central for Taranto.”
Why?
«The CO2 quotas are used for production that is not yet decarbonised. The free quotas of the former Ilva for 2024 are based on 2023 production: 3 million tonnes of steel. If the former Ilva were to produce more than 3 million of steel, this year it will have to buy the excess quotas. From 2028-2029 the free quotas will no longer exist and non-decarbonised production will have to pay for them entirely, this will cause them to go out of the market.”
How to avoid it?
«With a serious industrial plan, which allows production to be decarbonised by 2028-2029. It is necessary to create two Dri systems (pre-reduced, ed) to make 5-5.5 million tons of decarbonized steel. The Dri plants will have to be connected to submerged arc furnaces, which produce pig iron instead of liquid steel. Arc furnaces have two advantages: you can use cheaper pellets and you don't have to revolutionize steel mills, so you save money. We proceed step by step: you refire two small blast furnaces with 100-120 million and make them work in these years in which there are still free Co2 quotas, in the meantime you build two arc furnaces to be ready from 2028-2029, when the Co2 quotas free will end.”
How much does it cost to build two pre-production plants?
«Two billion euros, but they are decarbonisation plants and therefore the public funds are there. They are the ones that Minister Fitto had included in the pre-agreement with Mittal.”
So there is a risk that the EU will say that it is state aid?
«In Germany the state gave Thyssen two billion euros to build the green steelworks in Duisburg. If the Germans do it, I don't see why Italy can't do it.”
What production capacity will the new Ilva have?
«Five and a half million tons of steel, with all the vertical processes: galvanized and Genoa tinplate. The company will also be able to sell some slabs – 400-500 thousand tons – given that there is no longer anyone who supplies slabs, because nothing comes from Russia and Ukraine anymore.”
Such a plan would involve a reduction in employment. Today AdI employs 10,500 people, in the future?
«In the future it will be a different, smaller company, but 5.5 million tons of steel compared to today's Ilva is dripping fat. Naturally the conversion also requires a reduction in employment, the global parameter is one thousand employees for every ton of steel produced, therefore we will have 5,000-5,500 employees. But be careful: this aspect can be managed together with the unions, it is not a problem. When the industrial plan is clear, as well as the financial plan that supports it, the availability of new private partners to enter is realized and the company can be relaunched and put back on the market. State control will be temporary.”
ArcelorMittal?
«Obviously he has to go out. You can't think of having a minority shareholder who continues to appoint the CEO.”
Among the suitors there seems to be some foreign group. Is the nationality of the suitors irrelevant?
«Whoever says that the nationality of private individuals is irrelevant is talking nonsense based on turbo-capitalist ideology. The story that Ilva is experiencing demonstrates how fundamental properties are. Terni has a perspective because Arvedi is there to restore it. Duferco made an investment in San Zeno by buying back the share of the American partners who no longer wanted to make the investment. When you are a global operator you play on global tables and legitimately decide to make investments in the United States, if investing in the USA pays you twice as much as investing in Italy.”
Ilva steel was strategic. Is it still so, after the market has adjusted to the reduced production by increasing imports?
«A national production 30 days after the order is not like an import 4-5 months from China or Egypt: the price changes in the 4 months. Today you buy coils at a price that seems good to you and when they arrive the price has changed and maybe it is too high. Furthermore, if you have a delivery time of 4-5 months you have very high financial costs on warehouses. Dependence on foreign countries, price risk and financial charges weaken the competitiveness of the Italian industrial system. Italy can import, of course, but by doing so the industry loses competitiveness.”
But has the government already contacted you?
“Not yet. But to involve private individuals, the conditions I spoke about must first be achieved.”
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