ROME (Reuters) - ArcelorMittal (MT.AS) said on Monday it was withdrawing from a deal to buy Italy’s struggling steel firm Ilva after the government removed previously agreed guarantees of legal immunity over its operations.
The decision represents a blow to the ruling coalition, which had hoped to dissuade the steel giant from pulling out of the contract, and will raise further questions about Italy’s reliability as a partner in foreign investment schemes.
ArcelorMittal reached a deal last year to buy the heavily polluting Ilva, which is based the southern city of Taranto and employs some 8,000 workers in a region with one of the highest unemployment rates in Italy.
The promised legal shield would have given ArcelorMittal’s managers immunity from prosecution related to a clean-up plan for the plant. However, the ruling 5-Star Movement has opposed handing the firm legal carte blanche, saying it was unfair to Taranto locals who might have suffered from the pollution.
There was no immediate comment from the government.
Industry Minister Stefano Patuanelli was meeting Southern Affairs Minister Giuseppe Provenzano on Monday to look into ways of reviving the immunity protection, a government source said.
Mittal promised to spend hundreds of millions of euros on improving environmental safeguards at the Taranto plant, but it wanted guarantees it would not face legal suits from residents or workers whose health might suffered because of the site.
“The Italian Parliament has removed the legal protection necessary for the company to implement its environmental plan without the risk of criminal liability, thus justifying the withdrawal notice,” ArcelorMittal said.
The company said its withdrawal notice would come into force within 30 days.