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AM Italia plans to shut down Ilva blast furnaces by January 15

London — ArcelorMittal Italia said Thursday it will place all blast furnaces at the former Ilva steelworks in Taranto onstandby mode by January 15, 2020, as it moves to shut down all production at the site.

The company - which on November 4 told the Italian government it plans to pull out of its agreement to lease, purchase and operate Ilva - has meanwhile denied local press reports that it may remain as the site's operator until May 2020.

AM Italia CEO Lucia Morselli has informed the unions of the blast furnace shutdown plan, union sources told S&PGlobal Platts. According to an official union note, BF2 will stop operating on December 12, BF4 on December 30, and BF1 on January 15, while the Strip Mill 2 will be closed between November 26 and 28, due to a lack of orders, Marco Bentivogli, Secretary General of FIM CISL stated.

An AM Group spokesman confirmed that the company has started the process to put the BFs in standby mode "and weestimate the process to take 60 days".

AM Italia sources denied press reports that ArcelorMittal had told Michele Emiliano, Governor of the Puglia Region, that it will remain as manager of the former Ilva plant until May next year.

An Arcelor Mittal Group spokesman said that - as reported in its November 4 press release - it has asked the Special Commissioners to take back responsibility for Ilva's operations and employees within 30 days from receipt of the withdrawal letter. On Tuesday ArcelorMittal asked the Court of Milan to withdraw from the former Ilva rental contract, as notified.

AM Italia took the decision to withdraw from Ilva after parliament removed legal protection from the company, leaving its managers liable to prosecution over environmental issues. The decision was also taken as a result of the criminal court of Taranto obliging the Ilva extraordinary commissioners to meet certain conditions at the works by December 13, failing which blast furnace number 2 would be shut down.

ArcelorMittal said in its earnings statement that AMInvestCo, which has been operating Ilva, has been loss-making since its consolidation into the Group's accounts in November 2018. Its 3Q19 performance was impacted by an extraordinary weather event at the port close to the Taranto plant, resulting in raw material constraints. As a result, production levels at the plant were reduced to a 3.8 million mt/year run rate during the quarter, it said. The company was operating this capacity with three blast furnaces.

-- Annalisa Villa, annalisa.villa@spglobal.com

-- Edited by Diana Kinch, diana.kinch@spglobal.com