Luxembourg, Luxembourg (4E) – ArcelorMittal is looking into making an offer for Italy’s second biggest steel producer Lucchini, and a proposal is expected to be made later in July.
Lucchini was placed under “special administration” after it was declared insolvent in 2012. The procedure aimed to save huge companies and avoid heavy job losses. The company, formerly owned by Russia’s Severstal, was badly hit by the 2008 recession that has reduced Europe’s steel demand by around 25 percent.
Other possible candidates for Lucchini are India’s JSW Steel Ltd and Jindal Steel and Power Ltd, though they have indicated that they are not willing to take in the company’s blast furnace in Piombino, a facility that directly and indirectly employs about 4,000 people.
Italian unions and politicians prefer an offer that includes a commitment to maintain the operations of the blast furnace. The furnace, which has not been operational since April, produces up to 1 million tons of steel or equivalent to 4 percent of Italy’s output.
ArcelorMittal, the world’s biggest steelmaker, said last month that Rome had asked it to consider investing in or acquiring steelmaker Ilva, which is Europe’s largest producer that is also under special administration.