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Arvedi unveils steel production plans for Ilva

23 Jun 2016 19:07 (+01:00 GMT)
Arvedi unveils steel production plans for Ilva

London, 23 June (Argus) — Italy's Arvedi Group will prioritise environmental rehabilitation and the restructuring of production processes if its bid to take over troubled steelmaker Ilva is successful, the group's president Giovanni Arvedi told the Italian Senate's industry commission yesterday.

Arvedi plans to maintain the integrated cycle at the Taranto site, and would use electric arc furnaces (EAFs) to mix the pig iron produced on the site with direct reduced iron (DRI). This "hybrid production" would be "the only way to halve emissions," Arvedi said.

Such a project could be realised if Italian steel producers bought natural gas at prices comparable to those in the US, which will be possible once the Trans Adriatic Pipeline (TAP) starts bringing additional natural gas supply to southern Italy by 2020, Arvedi noted.

The Arvedi Group, which has been mulling a takeover of Ilva in partnership with Turkish integrated steelmaker Erdemir, also plans to bring together production sites controlled by Ilva and Arvedi, thus creating "a competitive company which could form the strategic backbone of Italian flat steel production". The new company would have capacity to produce 12mn t/yr of steel, with a turnover of €7-8bn/yr (around $8-9bn/yr) and could also be listed on the stock exchange, Arvedi said.

The Arvedi Group is one of several companies to have expressed interest in acquiring Ilva, with other bidders including global steelmaker ArcelorMittal which has put forward a bid in partnership with Italian steelmaker Marcegaglia.

Potential buyers of Ilva have until 23 June to submit their bids in a sales process that has attracted criticism from the Italian steel industry. Italy's steel federation Federacciai has called the government's 2013 decision to place Ilva under the control of administrators a "tragic mistake". A decision is scheduled to be reached by 30 June.