Italian hearing on Ilva steel postponed to March: sources

London — A Milan court hearing planned to set future production levels and define the operating status of ArcelorMittal Italia (the former Ilva steelworks) has been postponed to March 6 from Friday, sources close to the matter told S&P Global Platts.

The postponement was announced by Judge Claudio Marangoni at the Court of Milan Friday, following the appearance in court of company representatives and the Ilva commissioner, representing the Italian government. The postponement was jointly requested by the company and the government, the sources said.

They said ArcelorMittal and the Ilva special commissioners are working closely to strike a deal on the future direction and production levels of the Taranto works in southern Italy, and that ArcelorMittal Italia will continue to produce while legal representatives work out the agreement's details.

ArcelorMittal this week put Ilva's current crude steel production rate at 4.1 million mt a year. The company has said it could produce 6 million mt/year there by 2023. The government, however, wants the plant to produce 8 million mt/year of crude steel and for AM Italia to safeguard jobs, sources say.

Sources close to the issue said that ArcelorMittal will stay in Italy and will continue to operate the plant despite announcing plans to pull out late last year. Ilva, with both environmental, production and general cost problems, has recently been singled out as responsible for part of ArcelorMittal's recent net losses.

ArcelorMittal said in its fourth-quarter results Thursday that negotiations were ongoing with the Italian government to find a sustainable, long-term solution for the plant. On December 20, 2019, AM Investco signed a non-binding agreement with the Ilva commissioners to continue negotiations on a new industrial plan for Ilva, involving investments in green technology, together with discussions on a government-controlled entity possibly taking a substantial equity investment in the operation.

Last month the Taranto Court of Appeal granted an authorization for blast furnace number 2 at the Ilva site to continue operations, provided that outstanding requirements, including the automation of the casting floor operations, are fulfilled within a year.

ArcelorMittal declined to comment to Platts Friday.