Italy moves to save troubled ILVA steel plant

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By Massimiliano Di Giorgio | December 1, 2012 5:21 AM EST

The Italian government rushed through legislation on Friday to keep the troubled ILVA steel plant going during a two year clean-up after an environmental scandal threatened the survival of a business employing thousands.

The future of Europe's biggest steel plant in the southern Italian city of Taranto had hung in the balance after magistrates ordered it to close over accusations that emissions from the site had caused an environmental "disaster".

A decree passed in cabinet on Friday removed court administrators who had been running parts of the plant, which provides 20,000 jobs in an area of high unemployment, and said an independent supervisor would be appointed to oversee a plan to install cleaner technology.

"The company will now be able to operate so that it can implement the environmental clean up and modernisation," Industry Minister Corrado Passera said at a press conference.

The battle over the future of ILVA had been one of the biggest challenges facing the government of Prime Minister Mario Monti and a symbol of the struggle to preserve heavy manufacturing in Italy.

Passera said closure of the plant would cost the wider economy up to 8-9 billion euros with knock-on effects throughout the whole of Italian industry.

Under the decree, the privately owned Riva group, which owns the plant, could be fined as much as 10 percent of annual sales if it failed to impose reforms and could even see the plant confiscated, Environment Minister Corrado Clini said.

In July, magistrates appointed special administrators to run the section of the plant containing the blast furnaces after an investigation into reports of environmental problems on a massive scale.

Evidence cited in court documents toxic emissions from the site, one of the few remaining big employers in heavy industry in Italy's underdeveloped south, had driven up deaths from cancer and respiratory diseases in the area.

The company has said the plant complies with environmental standards and denies its operations are responsible for any health problems, but a stand-off ensued after magistrates seized the mill's output on Monday.

In response, the company shut down the plant and warned that thousands of jobs were at risk.

(Additional reporting by Steve Scherer; Writing by Naomi O'Leary; Editing by Mark Potter)

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